In the Chinese smart phone market, vivo nearly a year to show the explosive growth of a lot of people expected.

 According to IDC, China's smartphone market grew 19% year-on-year in the fourth quarter of 2016, while China's own branded smartphone manufacturers accounted for a larger share of the market, increasing from 46% in 2015 to 57% in 2016.

Among them, vivo in the fourth quarter of 2016 shipments reached 24.7 million units, accounting for 5.8% of the current global market share, up 104.7% year on year growth. In the global smart phone shipments, vivo has done the fifth position.

In the course of development, vivo has been a relatively low-key business, with the success of the market today, the success of the analysis of the reasons for the emergence of a large number of reports, one of the most common view is that its growth is based on vivo years of channel management As well as the overwhelming marketing strategy.

But these easy to see the appearance, often easy to lead to the outside world to ignore the nature of the back, a long time even posted a simple and crude label. What is the real reason behind the growth of the channel in addition to channels and marketing? How will the future continue to cope with fierce competition? Recently, vivo senior vice president Ni Xudong accepted the exclusive interview with Tencent technology, tells the story behind the success of the outside side for the outside world.

Do not follow the operator channel and Xiaomi.

"We have never developed KPIs, and the data in recent years have exceeded our expectations, and we are analyzing the reasons internally, and if we have to say the reason, perhaps because we have kept our direction in the past few years We rarely make mistakes.

For such a result, in charge of sales Ni Xudong told Tencent technology, the whole physical management did not think.

 Mention the growth of vivo, will inevitably think of backgammon. Vivo and another mobile phone brand OPPO were originally backgammon Electronics Co., Ltd. Backgammon Electronics Co., Ltd. was established soon, the founder of the step by step founder Duan Yongping according to the company's business is divided into three different, respectively, step by step high audio-visual electronics (OPPO predecessor), backgammon communications electronics (vivo predecessor), step by step education electronics, three companies are relatively independent Is different from the same source.

Natural debut when the main music phone, OPPO is positioning the international fashion brand, began to dislocation competition. Today, the smart phone industry called Derby OV (OPPO and vivo referred to) has become the most successful mobile phone brand.

Since 2011 released the first mobile phone so far, vivo product gene has never changed, always around the music and take pictures. At present, vivo main push Xplay series, X series, functional direction is still focused on taking pictures and music. In the smart phone innovation continues to lack, many mobile phone brands did not like this continues to adhere to a direction, but another way, try to market a cup of soup.

"We have been focusing on the basic needs of our users, so we have not deliberately pursued the scale and the share." Before we all, we are doing the right thing, and this is the right thing. Do not often face the outside world, just bow to do their own things, there is really nothing to say behind. "Ni Xudong said.

Over the past five to seven years in the development of Chinese smart phones, vivo has been playing an assertive followers, rather than blind pursuit of size and profit.

2009 to 2013, "China Cool" era, along with the functional machine out of the stage, the four companies rely on operators to support the smart phone market share in the rapid increase, once occupied more than half of domestic mobile phone market share. Did not last long, starting in 2014, with the operators announced for three consecutive years to significantly reduce the terminal subsidy strategy, long-term rely on the operator's channel of domestic mobile phone ushered in the "winter."

Period, in addition to Huawei, Lenovo, Cool, ZTE have been in trouble. In summary, the three brands in advance through the carrier channel, coupled with constant staff, products and strategy adjustments, resulting in brand damage, performance unbearable.

That time the vivo did not join the operator channel "big dye vat", but painstaking research product quality and user experience, while the outside world has always been that vivo imitation Apple iPhone.

A well-known mobile phone company insiders said that the highest profit to the smart phone industry, Apple can learn less detours, enhance their competitiveness. Success is often good at imitating, and many people who succeed are starting from imitation.

    Vivo apparently learned a lot on the iPhone, its products in the user experience and interactive logic can see the shadow of the iPhone. It is reported that, X7 / X7 Plus is one of the best-selling flagship product in history, it is this series to help the body to the rapid outbreak.

Ni Xudong memories, do the right thing is not wrong, difficult to face each stage to make the right choice.

  "Apple is the boss of this industry, it is worth to learn a lot of places .When did not do operators channel reasons, we think that any product is ultimately a consumer to be satisfied with the product, rather than that the operator satisfied with a product. "

    A high-level mobile phone manufacturers told Tencent technology, as long as the manufacture of mobile phones in line with operator standards, market sales do not worry. In the operator's counter, thousands of dollars, 100 yuan machine everywhere, business people will strongly promote all kinds of binding business.

   Operators do this is the rapid spread of 3G smart phones, but also because of product quality and experience the difference between the damage to the user, mobile phone manufacturers have become "back pot Xia."

   At the end of 2013, the market has also undergone a dramatic change. Millet rely on the power of the channel suddenly strong force, once 6.35% market share over ZTE among the world's top five, "China Cool" market for the first time the impact of a solid position. At this time the same as most of the mobile phone brands, also face whether to select online channels and launch their own Internet phone brand.

This time vivo or choose to adhere to, adhere to their own line of agents channels, the brand only focus vivo.

  "At that time millet out, the internal meeting also have discussion and controversy, but in the end we focus vivo.We believe that the concept of the user for the mobile phone brand is no line and line, as long as the service is unified is a brand, Vivo has no ability to do the second brand.

    After a lapse of many years, Ni Xudong words, why the end has not launched the Internet mobile phone brand and embrace the real reasons for online channels. It is understood that last year the overall sales volume of the channel under the channel more than 90%. Of course, online channel vivo has been involved, but the outside world and no attention. Ni Xudong revealed that this year's online channel than the column will gradually increase.

    Nokia, Motorola has been the overlord of mobile phones, missed the opportunity to transition to smart phones later failed. Today's Samsung, Apple, Huawei, OPPO, vivo, millet, etc. you catch me, no one who compete to make mistakes, once the wrong step, there may be full disk are lost

    With Ni Xudong words, the other family made a mistake, no mistakes will erode this part of the user, the scale will naturally grow.

  "There are few mistakes in the past, so all the way down to enter the final smart phone finals, at this stage of light to consider not to make mistakes is not enough, but also to strengthen the building capacity.

    Last year, the global sales volume reached 77.3 million units, Ni Xudong did not disclose this year's shipments target. According to Tencent technology to understand, vivo this year, there are three main objectives: research and development, brand and inventory turnover rate, especially in research and development, brand investment, will be the most important year of this year.

The reason behind the success of the channel

Ni Xudong is the old staff of vivo, after graduating from college to join the work of vivo so far, is now responsible for vivo overall sales and brand marketing.

    In addition to television advertising, in China one to four lines of the city, or even more bottom of the county-level mobile phone market, OV blue-green combination of almost 80% of the outdoor advertising resources and store display resources, which naturally formed an understanding, OV rely on marketing And the channel was successful.

    OV marketing and channel ability is really not false. For example, vivo formed a unique entertainment marketing style, the success of the consumer to convey their own young fashion, the fun of the brand connotation. Over time, the outstanding performance of marketing and channels to become a successful evaluation of the successful keywords.

  "Marketing is the easiest to understand and is most likely to be seen, so vivo is easily misinterpreted as a marketing achievement for everything today, and in fact the real investment in this area is not costly, and we have a lot of important Investment, has not been to speak, including our research and development. "Ni Xudong stressed.

    It is understood, vivo at home and abroad has set up seven R & D center. There are Shenzhen, Dongguan, Changan, Nanjing, Hangzhou and Beijing, the United States and the United States Silicon Valley and Santiago. From the business point of view, Shenzhen focus on software applications, Dongguan Changan is hardware research and development, Nanjing and Hangzhou is the camera and image algorithm, Beijing is 5G, the two US R & D center is mainly patent and artificial intelligence.

From this deployment view, vivo will be the original music and take a single point of technology breakthrough, into the overall technological innovation from the smart phone to promote. For example, the Beijing 5G Research Center, which has just been operated, has gathered a large number of industry veterans and experts from the Mobile Research Institute on the basis of years of communication technology and talent accumulation. At the MWC conference in February this year, China Mobile officially released TDD high power research results, and vivo because of research and development results by mobile recognition.

    For product quality requirements, vivo a number of test standards than industry standards. For example, in order to enhance the use of mobile phones in extreme weather, the temperature test range from the industry standard minus 10 ℃ extended to minus 30 ℃, requiring mobile phones can work in such extreme environments; anti-drop performance, requiring products in 1 m Height, 26 angles to cover, cover all possible drops to the typical location, the number of drops up to 100 times / Taiwan, and the industry standard is only required 6 surface drop in the 0.5m height of a total of 12 times.

    The external success of marketing and channels overshadows the internal inputs of vivo, and vivo has not published the details of research and development. However, according to Tencent technology to understand that R & D investment has been listed as one of the three goals of vivo this year, it is said that the board explicitly requires vivo R & D investment can not be lower than the total income of a higher proportion.

    Ni Xudong that rely solely on marketing, business will only die faster. "Marketing is an amplifier, is icing on the cake. Products and services are in front of 1, marketing is behind the number of filling." Marketing certainly valuable, but in front of a bad, behind the 0 fill more, also to no avail.

    It is understood that, at present the world has nearly 50,000 employees (including factory employees, not including channel agents), most of the hardware, software, design and other R & D personnel, only a small part of the marketing staff.

    In vivo view, the same is outside the "misunderstanding" there are channels. As we all know, vivo's channel model is proxy. First, the provincial agent, and then to the city's dealers, and then to the retailer, vivo as a complete channel of interest ecological system.

In the vivo channel system, providing a good product and brand to the consumer under the premise, vivo adhere to the interest chain priority order is that retailers first make money, and then the provinces, municipal agents to make money customers.

     "Wall Street Journal" has written with "the main channel and marketing to win the market" to describe the success of OV, that they rely mainly on the construction of fine, such as nerve tissue sales network, as well as a variety of advertising, marketing assists in the country to open the market. It should be noted that this model is a lot of Chinese mobile phone brand research, copy, but no one can make a comparable effect.

Why are domestic retailers willing to work with OV?

Ni Xudong said, from the backgammon era began cooperation channel partners have formed years of understanding. Together to make money, but also lose money, everyone in the values, common goals is highly consistent, not the outside world said an agent holding so simple.

    "There are some interests of the dispute, the reserves would rather eat some losses.We are more important in the long-term, rather than short-term, we can understand that the relationship is unified, there is a unified side, there are decentralized, The other side of the right. "Ni Xudong told Tencent technology.

In addition to the above factors, Ni Xudong to a county-level retail channel couples for example, they are willing to sell the product is because the product quality assurance and service of the fast follow-up:

    "These retail stores do not often put money in the first place, they do not survive pressure, more worried about the product is sold out of the problem and how to solve the problem, after all, customers are rural folks, face also make life difficult So we do not give the channel how much rebate, but we do in the products and services to allow the channel to be assured, so they will sell products in vivo.

According to a mobile phone channel to Tencent technology revealed that in some cities and counties channel, vivo service response time of not more than 48 hours. Such as product distribution, material support, marketing support, etc., other mobile phone brands can not be compared. And once the retailer product really a problem, vivo is the first time free replacement, other brand declaration process will take more than a week, or even longer.

     At present, like this retail store vivo in China has nearly 200,000, they are willing to own the location of the store to the vivo, and even hang the body of the door and advertising. So, to some extent, is the product and service to stimulate the channel, which led to growth.

Looking for new growth points

For vivo, the continued growth is the next biggest problem to face, after all, in the highly competitive Chinese smart phone market, changing everywhere.

    The huge dividend of India's smart phone market, has let all mobile phone brands coveted, especially in the past two years, including vivo, including many Chinese mobile phone manufacturers here siege.

    Market research firm Counterpoint announced the latest research report on the Indian market, the company that the next 12 months, most of the Indian users will upgrade the hands of the equipment, and 4G network construction will play a role in fueling. In the long run, this trend is experienced in China's mobile phone market in terms of mobile phone brand is undoubtedly a rare way.

    Ni Xudong said that the Indian mobile phone market is currently in a functional machine to the smart machine transformation stage, the Chinese smart phone market through the process will happen in India.

  The truth is true. In the past few months of the Indian market survey, vivo advertising has been all over the streets of India, if not the color, language differences, you will think that they are living in a city in China.

Counterpoint data pointed out that in the fourth quarter of 2016, China's mobile phone market share in India reached 46%, compared to the same period in 2015 increased by 65%, accounting for almost half of India's mobile phone market. Among them, vivo's market share reached a maximum of 10%, millet and Lenovo reached 9%, while the OPPO reached 8%. India's mobile phone shipments ranked the top five brands, domestic brands accounted for 4 seats.

    Expand the market share at the same time, China's mobile phone manufacturers will also be moved to India's production base. The Indian factory is the largest overseas factory in vivo, with 1191 employees and one million units a month. There are OPPO in India's second factory is also under construction, covering 100 acres, the overall investment of 1.5 billion yuan; millet is also building a second Indian factory, 75% of India's current sales of millet phone to achieve India Localization; gold investment of 5 billion rupees in the Delhi capital of Haryana province to build a new factory.

    In addition, the field of good entertainment marketing in India popular concern. In cooperation with the Indian Cricket Association (BCCI), became a two-year IPL master title partner. IPL is the abbreviation of the Indian Cricket Super League, is one of the most concerned sports events in India, which has hundreds of millions of viewers in India. Future vivo and IPL will collaborate in more areas such as star participation, stadium exposure, related star signature merchandise and offline activities, fans meet and other aspects of a series of cooperation, which products of the Indian promotion play a positive role The As the hair cricket marketing strategy properly, many Indians even think that vivo is the Indian local mobile phone brand.

For the Indian market strategy, Ni Xudong said that China is still the largest market for smart phones, the Indian market vivo strategy is to live first, then steady progress. Open up the Indian market is not simple because of its blind pursuit of the size of the population dividend, but the Chinese mobile phone manufacturers for many years the accumulation of technology and industry chain mature, really have the ability to get out of overseas. "Not just the Indian market, the next 10 years, China's mobile phone brand in the global opportunities will be great."

    According to the latest plan in vivo, in India, after Southeast Asia, this year will start the Middle East market, after the plan to expand the spending power of Hong Kong, Taiwan market, the future will consider the European market.

    However, although the Indian market is huge, but to seek government protection of the local brand to the market into a lot of uncertainties. The future is still an unknown, but insiders stressed that vivo is still to improve product quality and service as the key, which is the first half of the other mobile phone brands have released new products, vivo still quietly the main reason. It is understood, vivo founder Shen Wei has issued an internal order, do not have the quality of the new product is not on-line release.