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India’s biggest smartphone company is Chinese

Chinese giant BBK Electronics is the parent company of Oppo, Vivo, Realme, OnePlus and iQoo and accounts for 43% of smartphones sold in India.  
Jul 27, 2020 / 10:39 AM IST

That 73 percent of smartphones sold in India are made by Chinese companies is a well-known fact. But that 43 percent, if not more, of these come from the stables of just one company—BBK Electronics—is bound to raise eyebrows as Chinese companies face increased scrutiny in India.

BBK Electronics is the parent company of Oppo, Vivo, Realme, OnePlus and iQoo but is careful not to mention or associate with these names publicly, choosing to stay behind the scenes.

Based in the industrial city of Dongguan in the coastal southeast Chinese province of Guangdong, the electronics giant has over the years spawned several brands and spun them into different companies, which are going up against each other in India and other markets.

Believed to be the world’s third-largest manufacturer of smartphones, BBK Electronics is painfully media-shy.

Its international website has a single page with some generic information about the businesses that range from CD players to microwaves.  There is a mention of “phones and accessories” but with a picture of a corded landline phoneThere is no mention of its vast smartphone empire.

But its brands more than make up for their elusive parent, which made a quiet entry into India in 2014.

ALSO READ: The absolute dominance of China in India’s smartphone market

The smartphone giant 

BBK Electronics’ decision to eschew from associating with its brands seems to be well thought off. Most buyers won’t know whether they choose Vivo, Oppo, Realme or even OnePlus, they end up supporting one company.

BBK-owned brands—excluding OnePlus and iQoo— had a 44.2 percent market share of the Indian cellphone market, technology market analyst firm Canalys' India said in its Q2 2020 report. Rival Xiaomi accounted for 30.9 percent smartphones and Samsung 16.8 percent.

Vivo’s share was 21.3 percent, Oppo 12.9 percent and Realme 10 percent. Launched in early 2020, iQoo is still finding its feet. OnePlus targets the premium segment and cannot be compared to the affordable and mid-range segments.

Counterpoint Research's report for the first quarter of the financial year 2020-21 says between them, the three brands account for 43 percent of smartphones in India, the world’s second-largest market in the world. India had 502.2 million smartphone users as of December 2019.

Initially called Bubugao, the company was launched in 1995 by Duan Yongping, who, according to a South China Morning Post report, is regarded as the “godfather” of the Chinese smartphone industry for developing Oppo and Vivo brands.

CD and DVD players and small home appliances were the first offerings of the company.

ALSO READ: Smartphones sales in July slump 30-40% as import hurdles for China affect unit production

In 2004, Oppo Electronics Corp was born but was limited to audio-visual products. The company’s smartphone journey began five years later with Vivo Communication Technology. Its emergence also coincided with China’s push to be the world’s manufacturing hub, with special emphasis on electronics and technology.

In a couple of years, Vivo was churning out smartphones. Around the same time, Oppo, too, ventured into the phone segment with some eye-catching launches on the global stage like that of Oppo N3, which has a motorised swivel camera.

The smartphone assembly line was up and running.

ALSO READ: Why India can’t be ‘Atma Nirbhar’ when it comes to smartphones

From two to five brands in India

As the years went by, the company mastered supply chain economics.

By 2015, Vivo and Oppo were spending hundreds of crores on marketing in India. Mobile-phone shops were covered in Vivo's blue and Oppo's green but it was the prices that did the trick. In a price-sensitive market like India, the two brands offered the latest features in an affordable range.

They understood the local demand and designed their products accordingly. But Chinese phones, like many other products coming from that country, were notorious for their poor quality.

Oppo and Vivo set out to change the perception by building solid on-ground presence in a market that was new to e-commerce. Their products, too, were superior in quality. Nokia was on a downward spiral and that helped.

To shop owners, Oppo and Vivo offered better margins and bonuses to convince them to push their phones. But the two brands weren't enough to meet the rising demand in India, where internet penetration was growing and a young population that was thirsting to get on to social media.

Smartphones evolved from being just a mode of communication, they were also a symbol of success. Apple and Samsung dominated the premium segment but there was space for more. And, along came OnePlus in 2013.

Founder Pete Lau, who is also the CEO, is a former Oppo vice-president. Co-founder Carl Pei, too, is an old Oppo hand who worked under Pete. The great BBK assembly line had churned out another spin-off, with an appropriate tagline “Never Settle”.

Out to unsettle the premium phone market, OnePlus had a humble start as an affordable phone maker but swiftly ventured into the premium bracket.

Unlike Oppo and Vivo, OnePlus targeted India, Europe and the United States, the final frontier. In a short time, it managed a loyal following, often compared to that of Apple.

For most, OnePlus is a young company that has dared to take on the might of Samsung and Apple. But the reality is far less exciting—it is a new brand sitting on top of a well-oiled supply chain.

In 2018, Oppo launched another brand, Realme, in 2018 to take on rival Xiaomi's highly successful Redmi lineup.

The brand was spun-off into an independent company within months of the debut. It meant that Realme and Oppo teams were taking decisions independent of each other and were rivals.

(The author writes on technology, aviation, and mobility.)
Shivam Vahia
first published: Jul 27, 2020 10:39 am

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