Why BBK Electronics own 5 different brands (OnePlus, Oppo, Vivo,…) just to manufacture smartphones?
Sounds like an interesting topic, right?
This is going to be a long answer, so in short the reason why BBK Electronics own 5 different brands to manufacture smartphones is to occupy the whole market share in online and offline with a single brand focused at a particular smartphone category.
Want to know more? First let's go through the history of this company i.e. BBK Electronics.
What is BBK Electronics?
BBK Electronics is a Chinese-based company which was founded in 1995 to manufacture gaming consoles which are then rival for Nintendo and other electronic devices like language repeaters, electronics dictionary, reading machines, etc. Then they entered the music industry by founding Oppo. In 2009 another brand emerged that is Vivo which at that time know for its Music Hardware (Technology). Another smartphone brand emerged in 2013, which we now know as Oneplus, unlike its siblings Oneplus was not founded by BBK Electronics but it is owned by BBK Electronics. Then, a brand spring up in 2018 with astonishing smartphones from another sub-brand (Oppo) which we hear of every now and then i.e. Realme.
It was founded in 2004. The main motto of Oppo was to sell music equipment like DVDs, CD-ROMs, music players, headphones etc. Later they entered the smartphone industry. Their smartphone series are A, F, N, R, Find, and recently Reno. Their smartphones are offline targeted but simultaneously they have a good series of smartphones under their name i.e. Oppo Find series where they used to introduce smartphones with new innovations For example Oppo was the 1st smartphone which came up with a Full HD display, 1st smartphone which came up with a Quad HD display, 1st smartphone with rotating camera, 1st smartphone with 50W supported charging. Last year they came up with Oppo Find X, which I’m pretty sure you heard about it. Oppo entered Indian smartphone market in 2014 with a bang (i.e. official title sponsor for IPL). Since then they have been launching so many smartphones under different categories with huge promotions which we will come across in a bit.
This is another sub-brand of BBK ELECTRONICS which was founded in 2009. As said Vivo know for its Music Technology, they provide great music hardware i.e. Hi-Fi chips in their smartphones. Vivo smartphones were more focused on the consumers whose smartphone priority was Camera and Music. They officially entered Indian Smartphone industry in the year 2014 same as its sibling Oppo. Their smartphones were all offline targeted which were focused on Camera and Music, just like its sibling its sales were due to huge promotions. Later they introduced some innovative smartphones. Their smartphone line-ups are V, U, X, Y.
This company was founded in 2013 by Pete Lau, who was once president of Oppo smartphone division. He started this company with his fellow-mate Carl Pei from Oppo who shared the same vision. Oneplus is a sub-brand of Oppo, it is because when it was founded all the resources were provided by Oppo and later it became a subsidiary of the Oppo. This brand doesn’t share any similarities with its siblings i.e. Oppo and Vivo are offline targeted whose sales were due to huge promotions where as Oneplus was online focused brand with meager advertisements. They entered Indian smartphone industry in 2014. Just after launching their 1st smartphone in India they had to face a legal case against YU which sub-brand of Micromax for using Cyanogen Mod in their smartphones whose rights were held by Micromax at that time. Soon they came up with another OS i.e. Oxygen OS which is now know as best Android OS. Their smartphones became a hit right from the start because of their aggressive pricing of their smartphones. Oneplus is most preferred smartphone in the premium segment in India with a market share of more than 40% considering the fact that in premium segment they are competing with Industry leaders – Apple and Samsung.
This smartphone brand is again a sub-brand of Oppo which was established in 2018 by Sky Li who once was vice-president of Oppo. This smartphone brand share similarities with its elder sibling Oneplus which is Online focused. At first Realme smartphones i.e. Realme 1 came up with the Oppo branding on their smartphones later they announced that it has become an independent brand but still it shares its resources like software and service centres of its parent company Oppo. The reason why this brand came into existence is redmi. From the past 3 years we have been constantly watching promotions as No.1 smartphone company–Redmi and Xiomi in India had a huge impact on the smartphone industry by which they occupied most market share in India. To tackle this Oppo launched this brand as online only brand, which is similar to Huawei and Honor. Even the name is similar, “Red-mi”, “Real-me”. Since then Realme launched more than a dozen smartphones which made them fastest growing company in the world. Just within a year they occupied 16% market share which is a big number considering Oppo with market share of 7% which is parent company of Realme. As it aroused as a Online brand it doesn’t seems that it is keeping up with it, from its recent events it looks like this brand is shifting its gears towards offline market just like its elder siblings.
BBK Electronics launched its sub-brands Vivo and Oppo, later Oppo launched its sub-brands Oneplus and Realme, why not Vivo. Now then Vivo launched its subsidiary IQOO which is similar to Realme that is both are online focused brands and both brands are rivals for Xiaomi. We don’t have much information about this company but it looks like even this one is to tackle Xiaomi, because Xiaomi has sub-brands– Black Shark, Redmi and recent sensation Poco. Here Black Shark and Poco are left out and as we all know these we recent sensation in smartphone industry with aggressive pricing for the specifications they were offering. So it looks like this brand is contrary to Poco. Recently they launched IQOO 3 smartphone with 5G.
Now that we know about individual brands let’s dive into the market strategy of BBK Electronics.
Marketing Strategy of BBK Electronics:
We came across all the brands owned by this smartphone giant, did you notice anything. Well let me tell you they follow multiple business strategy i.e. Push marketing and pull marketing (I came to know about these from other online resources, as I was searching about these I came across some other things like birth of vivo).
As said BBK once used to manufacture products related to music, gaming consoles, education etc. Then they faced a law suit where in they lost money and they almost went bankrupt. This is the time where Oppo and Vivo came into play and later their siblings i.e. Oneplus, Realme and IQOO. The reason why they launched Oppo and Vivo is that even if any of its subsidies fail or go bankrupt on the whole BBK won’t be affected. Thus we see their taglines as Oppo – Oppo camera and Vivo – Camera and music.
As I said they follow multiple businesses strategy i.e. Push marketing and pull marketing. Now let’s discuss about this.
Push marketing is nothing but forcing or pushing the product of the brand in the market through promotions.
Do you remember the hoardings featuring advertisements of Vivo and Oppo which is marketed by a celebrity. We used to see these advertisements almost everywhere. This type of marketing is called push marketing because these brands invest their money in advertisements and sponsorships so as to push their products into the market to gain the attention of public. I call this type of investing as short-term investing because through these huge promotions they are gaining customers only for that period of time. This is fine if the product offers good value but these brands simply doesn’t offer any good specifications with regards to the price. Generally this type of marketing strategy is applied where the product is not great because they know if they don’t invest money in marketing then they will lose the market share.
Oppo's F, A series doesn’t carry good specifications but with huge promotions they stand in huge selling smartphones.
Similarly Vivo’s V, Y series does the same thing.
This business model includes:
- Advertisements in T.V’s and hoardings to increase brand value.
- Sponsorships for major events like IPL (Vivo IPL) and sponsoring Indian cricket team (Oppo) and other events like PUBG, Pro Kabaddi etc.
- Targeting offline market – These brand's major market share is in offline smartphone industry. As per some online resources these brands offer high commissions (20%) to their offline retailers. However they gain high profits as their smartphones are priced high low specs.
The main take away here is this is how Oppo and Vivo sell products will low specifications. Majority of these brand’s smartphones line-up fits in mid-range category. These brands are offline targeted with high profit margins.
But from the mid 2018 I have observed that these smartphone OEM’s are launching smartphones with innovations i.e. Vivo In-display fingerprint sensor, Vivo Apex concept, Oppo Find X etc. Later these brands started focusing on online customers which we are going to discuss in a bit.
Now coming to the Pull Marketing Strategy, it is nothing but attracting customers by offering great value in their products. Here promotions are almost equal to none.
This is followed by Oneplus and Realme. We know how Oppo and Vivo came into existence but this company (Oneplus) is no way related to Oppo or Vivo in terms of business model. Because Oneplus was started by former Oppo president in order to built product which are great. Oneplus came into existence with a bang by launching Oneplus 1 which was a sensation at that time for the specs it was offering at an affordable price. Later it grown into a premium brand by hiking their smartphone’s pricing year by year, even then they were good. As discussed the strategy of these brands are to gain customers through online and make them to stick with these brands. Obviously if a brand is offering great value to their customers then they will stick to this company - which is nothing but brand value. These brands invest money in R&D so that they can fine tune their product. I call this as long-term investment because they are gaining something i.e. customers in long-term unlike its siblings (i.e. profits). We don’t know much about IQOO but I think even this one falls into this category and most importantly to face Xiaomi.
All Realme smartphones line-up are launched with best specifications in the market.
Oneplus has only 2 series, one numbered and the other “T”, even these provide good specs (but not great) at affordable price.
This business model includes:
- No Advertisements.
- No Sponsorships.
- Online targeted products.
- Mainly money is invested in R&D.
Then you might have a doubt “Then why do I see advertisements of Oneplus and Realme?” which we are going discuss in a bit.
The main take away here is Oneplus and Realme occupies the most online market share while its siblings take over the offline market share. Oneplus operates in Premium smartphone category and Realme operates in budget category. Here the profit margins are low but as these products sell more overall they gain profits.
Here are my views and analysis about these smartphone OEMs.
Firstly all these smartphone OEMs are operated by a single company. All these brands are operated in different market segments with different marketing strategies.
As we can see all these brands combined are wide spread across all smartphone categories from Budget to Premium. Not only that these occupy whole online and offline markets. Here you may argue that brands like Vivo and Oppo also have smartphones in budget category, yes I agree with that but mid-range is their main focus. On whole this is the business model of BBK Electronics, focus at a single area (category) and try to get most out of it in all the possible ways (profits from high margins and profits from low margin in huge quantity). Thus BBK Electronics own 5 different companies to manufacture smartphones. In India Xiaomi is the market leader with 26% market share if single brands are considered but on the whole BBK occupied 46% in Indian smartphone Industry.
One Last Thing:
As said earlier now we are going to discuss something more about these brands which I have observed in recent times.
Earlier Oppo and Vivo used to launch smartphones which were not so great rather I would say offline oriented, but now they are shifting their gears since mid 2018 both of these brands came up with new innovative smartphones as well as with some good price to performance smartphones. For Example: Vivo X20 – First smartphone with In-display fingerprint sensor, Vivo Nex etc and most recent Vivo U series. Since from its early stages Oppo had good smartphones but they never launched those in Indian market, but now it is not the case. They came up some good price to performance smartphones like Oppo K1, K3. And we never encountered any advertisements of these smartphones.
The other thing which grabbed my attention is Oneplus and Realme’s shift in market strategy. No doubt they have some really good smartphones but in recent times Oneplus started investing more money in promotions or advertisements and Realme is launching a new smartphone every now and then (every month) and now they are focusing on offline market.
The main take away here is those brands which were offline focused are now shifting towards online (not totally) and those those brands which were online focused are now shifting towards offline (not totally).