The Chinese Marketing Ace Controlling India’s Mobile Phone Market | Bombay News
It is tempting to assume that Indian consumers are spoiled for choice when it comes to mobile phones and that the market is brutally competitive. But what most people don’t know is that a virtually unknown entity called BBK Electronics, a Chinese company, manufactures at least five brands of phones that dominate the Indian market. They are: Oppo, OnePlus, Realme, Vivo and iQOO.
Between these brands, BBK controls more than 40% of the Indian market, the second in the world for mobile phones after China. The mastermind who has built BBK’s strategy over the years is Duang Yongping, a reluctant billionaire, who now lives in the United States.
Very little is known about the man and the company in the public domain. And those in the know prefer to keep their cards handy and statements measured. But between the controlled literature that occasionally emerges in the public domain and one-on-one conversations with people who work with BBK outside India, an image emerges – that of a bold visionary who has tasted to success for the first time in 1996 as a VCD manufacturer. on the back of a risky bet.
China’s state-sponsored television (CCTV) weather forecast is among the most-watched segments there. Yongping literally broke the bank and paid CCTV $11.6 million that day to book commercial breaks before this segment went live. That left BBK around $200,000 for everything else, including paying vendors it sourced materials from. It was inevitable that they were pounding on his doors for payments. He weathered the storm by persuading them to take a stake in BBK believing that the move will yield big dividends as the VCD brand name will be imprinted in viewers’ minds. It didn’t take long to prove that Yongping’s bet was smart play.
He rolled out the strategy again and again and started spending disproportionate amounts of money on marketing. This meant bringing in superstar actors such as Jackie Chan and Jet Li to endorse other products that BBK branched out into. It worked every time.
It was only a matter of time before BBK started manufacturing mobile phones under different brands as the demand for VCDs and DVD players began to decline worldwide. How to sell them was a game the company had perfected over the years. And there was no way it was overlooking India, home to over a billion people with an insatiable appetite for these devices.
But unlike most other entities that tried to wean people off by building expensive feature-packed phones or stripped-down devices with low-cost models, BBK went about it counterintuitively. He asked what feature do certain types of consumers value more in a phone other than its ability to make calls?
It was the right question. Because their research showed that some wanted a good camera; others wanted audio; while there were those who preferred ease of use. And so on. The next step? Build devices with these built-in features at different price points and build quality with different brands. Because there may be people who value branding, and still others who don’t.
Then, deploy the lessons learned from the early days of capturing the Chinese VCD market. This is where celebrities come in. So if Ranbir Kapoor represents Oppo India, then Viraat Kohli does the work for Vivo and iQOOO while KL Rahul endorses Realme and OnePlus has Shahid and Mira Kapur to stoke the excitement.
Speaking off the record, a social media influencer explained how he is supplied with the latest gadgets and taken to exotic locations, just to speak in glowing terms about the products he “unboxes” and “reviews”. But this is all kosher because “it’s just business”.
While the hardware battle has been won, BBK is about to dig its heels in to make it out in the software space. Most people download apps to their devices through Apple’s App Store or Google’s Play Store. Every time people pay to buy an app, Apple or Google keep a percentage. This is where the sums are significant and the margins are higher. Apple keeps between 15 and 30% commission and Google keeps 15%. Anger against the two entities is high in the developer community and an investigation has been ordered by the Competition Commission of India (CCI). Amazon has been tinkering with an app store for quite some time now.
Although BBK has yet to demonstrate its expertise here, rumor has it that the company is hard at work building an app store to rival Google and Apple. Breaking this duopoly seems difficult – unless BBK comes up with something quite ingenious. We will have to wait and see.