Editor’s note: This article is selected from KrASIA, the original title is “Inside realme’s grand plan to woo Indian users,” by Moulishree Srivastava.In India, the world’s second-largest population, Xiaomi and Realme are competing for the low-end smartphone market, which accounts for 80% of the mobile phone industry.It took only five years for Xiaomi to enter India in early 2014 to become the number one player in the market. However, the realme, which has just been established for less than two years and is growing at an alarming rate, is now catching up.Recent data from market research firm Counterpoint shows that while Xiaomi maintained its leading position with a 28% market share, realme’s performance increased by 255%, and its market share expanded from 3% in 2018 to 10% in 2019.Samsung’s market share in 2019 is 21%, which is 3% lower than 2018.”Realme ‘blocked’ Xiaomi and Samsung and other niche brands from grabbing more market share,” Navkendar Singh, research director at IDC India, told KrASIA.”It seeks to gain more market share and achieve its own growth.” The company is currently working on a plan to build an ecosystem for users through smartphones and IoT devices, loans and insurance services, and offline experience stores.Realme CEO Madhav Sheth said in an interview with KrASIA that they expect mobile phone sales to double and reach the goal of selling 30 million mobile phones, and the company has now formulated a detailed sales plan for this.India has more than 500 million smartphone users and is expected to increase by 400 million in the next three years, so it plays a significant role in the eyes of global smartphone companies.Apple, Samsung, OPPO and vivo focus on the high-end market, while Xiaomi and realme are the main mass market brands.Soaring demand for cheap phones between $ 100 and $ 300 has further boosted the growth of the two major brands.As Xiaomi shifts its focus to high-end phones, realme recently also said that it will follow closely behind, which makes the market interesting.Although Xiaomi, a leader in the Indian smartphone market, often criticizes realme as a copycat, realme CEO Sheth refutes this statement: “If we copy others, their growth should be better than us. In order to be the fastest growing in the worldOne of the smart phone brands we are definitely working harder than them. “According to Sheth, they are preparing to launch a series of new services, so realme” will have some changes this year. “Sheth, the CEO of Realmerealme in “The Year of the Fight,” mentioned: “When we entered the industry in May 2018, only a few brands had online stores, and people were expecting more choices. We see this as hugeAs a result, IDC’s Singh revealed that before realme came out, Xiaomi was unmatched in the mobile phone market under $ 200, which accounted for more than half of the Indian smartphone market, so Xiaomi was inThe market has been far ahead and its share can reach 45-50%.”Realme is the main print market and plans to compete with Xiaomi online,” said Singh.”Realme has been very successful, and it is comparable to Xiaomi’s models in terms of hardware, design language, parameters, etc. Some have even exceeded Xiaomi, and the price is lower.” “Any time has passed in any market.Later, they need to add fresh brands. Although Xiaomi has very good products, realme’s repeated bombardment of the market has provided people with new options, “he added.In the past year and a half, realme has launched five phones at different price points (less than $ 420), cater to the different expectations of various user groups, and introduce new ones every 4-6 months.Counterpoint’s Pathak said in a recent interview with KrASIA that realme achieved “a few firsts” in product design and parameters.”They are very active in launching a variety of features that meet market needs, such as a 64-megapixel sensor, the latest processor, and a special-shaped screen design. The brand does a good job in diamond cutting design, color, etc.,” he said.”They also move faster than other brands in the market, adding a lot of new features to mobile phones.” The Indian market lacks brand loyalty, especially for markets under $ 200, but this environment is conducive to the development of realme.Experts interviewed by KrASIA believe that although realme’s product strategy has made a good start for it, in fact, its cooperation with e-commerce giant Flipkart has really promoted the brand’s growth.”Their partnership with Flipkart really pushed them to where they are today,” Singh said.”Flipkart assisted them and launched a more cost-effective model comparable to Xiaomi.” He said: “This is a direct confrontation with Xiaomi. The cooperation between realme and Flipkart has indeed reversed Xiaomi’s strong position in some ways.In a sense, realme has become a rival of Xiaomi. “It is worth mentioning that realme’s first smartphone was launched in cooperation with Amazon, but then, realme chose to launch a new product in cooperation with Flipkart, and Flipkart has always been Xiaomi’sPreferred partner.Sheth believes that realme’s phones are more suitable for Flipkart’s audience, so they decide to change partners.Counterpoint’s Pathak believes that the secret to making realme flourish is to use popular sales channels to launch products with the right parameters at the right time at affordable prices.It is precisely because realme uses all of the above strategies that it has successfully entered a market that many brands do not care about.Although the development of realme is fierce, its growth path has been ups and downs from the beginning.But in early 2019, realme’s partnerships with physical retail chains such as Reliance Retail, Poorvika, and Sangeetha were broken because of lower profit margins.”When entering the offline channel, we are very clear that we will not bring profits to retailers like other brands. Because we are not willing to provide consumers with gifts such as furniture gifts, trips to Europe, etc. at the expense of the interests of consumersBenefits. “Sheth said.Realme’s “big plan” Realme is ready to expand its offline presence, which could boost its sales performance.Currently, only 20% of the brand ’s sales come from offline, and the rest are done online.Realme CEO Sheth plans to increase the number of offline retailers from the current 10,000 to 40,000 this year.They also plan to hire 10,000 salespeople to sell products in retail stores so that offline sales reach at least 30% -35% of the total.But the more ambitious plan is related to the ongoing experience store, and realme plans to release the relevant information by the next quarter.”In the future, we will open more stores to showcase products that will be launched in 15-18 months.” He also added that as long as the first store opens, the company “will quickly expand the number of stores.”In addition to plans to double smartphone sales to 30 million units this year, Sheth is also exploring the establishment of an IoT-connected device consisting of smartphones, fitness bands and TWS (True Wireless Stereo) headsets, as well as digital loans and insuranceAnd other financial services.The company launched a new service called “Realme Paysa” in December last year to promote fast personal and business loan businesses, as well as insurance services for screen and phone damage.He said: “Building a complete ecosystem is our long-term vision. As long as consumers enter the system, they will get end-to-end solutions. Whether it is buying, selling, or replacing and repairing services, all theseIn one system. “The company is funding cooperative distributors and offering them low-interest loans to build and expand their business.According to Sheth, the company is uniting banks to lower interest rates, enabling freight, channel and retail partners to achieve higher return on investment.He added that in the coming months, realme will add a series of services to Realme Paysa.Industry experts believe that Realme Paysa is a measure launched by realme in response to Xiaomi’s Mi Credit, a loan service launched by Xiaomi in India.In addition, realme CEO Sheth also said that the company will focus on the high-end market, which is also considered by Xiaomi as a key market in 2020.IDC’s Singh believes that although realme and Xiaomi’s mobile phone sales of less than 300 dollars, which occupy 80% -85% market share, will become their main source of income, the pursuit of high-end markets will become a natural evolution of the brand.”They need to develop a brand in a market like India,” he said.”They already have a large user base, and now want to go beyond the $ 300 market segment and launch a series of high-end models. This way, customers who want to use high-end machines can choose among existing brands instead ofWill switch to other high-end brands. “Sheth believes that although the high-end market is a more difficult battle for realme, to compete directly with Samsung, oppo, vivo and OnePlus, the biggest challenge for realme is still how to go onlineDeal with retailers because realme doesn’t want to attract retailers by giving away free gifts.According to data from IDC and Counterpoint, realme’s shipments in the previous quarter have halved compared to the third quarter of 2019.Because post-holiday sales are usually driven by offline channels, a lower offline presence may pose challenges for brands.But analysts believe that this is only a temporary problem for realme.Sheth said that they increased shipments in the July-September 2019 quarter to meet holiday demand, while the fourth-quarter shipments were not high because they did not want to risk hoarding more inventory.The company claims that they sold 5.5 million phones during the Diwali festival in India in October 2019.Sheth said that in addition to doubling the number of offline stores and launching experience stores, realme is also exploring other online channels, hoping to make its products available on multiple e-commerce platforms, not just Flipkart.”But the biggest opportunity is still the offline market, because we have a huge room for growth there,” he added.Edit | Du Jun @ 36 氪 出海 图 | Visual China.
Realme’s “big plan”, is it armor or weakness?
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