Starting a new brand of phone in 2018 may seem too late in an already crowded market, but Sky Li believed that consumers between the ages of 18 and 25 were vastly underserved – they needed something that was both affordable and cool.
A few months after Li founded Realme in May of that year, the smartphone company hosted a product launch at a college campus in India, the first second biggest smartphone market. He brought his own production team, built a makeshift stage, and invited local rappers to grace the event.
“I was amazed. No one was sitting and it was like a carnival, a big disco party,” Chase Xu, marketing director of Realme, 31, told me at the company’s headquarters in Shenzhen.
“No foreign company had ever entered the campus. They didn’t think it was possible. Why would a university let you have a launch event there? Xu, wearing a minimalist and chic black jacket from a national brand, recounted with enthusiasm and pride.
“Realme became widely known as a result of the event. People found it very interesting that he mingled with students. He didn’t just launch a product. He showed a young and flamboyant attitude.”
In nine quarters, Realme shipped 50 million handsets in the world, with India as its biggest market, even bigger than China. The goal this year is to double last year’s goal to 50 million units, a goal that is “almost achieved” according to Xu. It is now the seventh largest smartphone brand in the world, behind those that have been around much longer – Samsung, Huawei, Xiaomi, Apple, Oppo and Vivo, according to a Q3 report by Canalys research firm.
Realme did not accomplish all of this from scratch. It’s yet another smartphone brand rooted in BBK Group, the mystical electronics empire that owns and supports some of the world’s largest phone makers (Long live, Oppo, OnePlus and now Realme).
In 2018, former Oppo Vice President and Head of Overseas Affairs Sky Li announced that he was stepping down from Oppo to launch Realme as an independent brand, much like Oneplus started in 2013. Today Realme, OnePlus and Oppo all belong to the same detention group. This entity, along with Vivo, is part of BBK, which in 1998 started selling electronic dictionaries in southern China and has continuously diversified its portfolio since.
While Realme and OnePlus operate independently, they have access to Oppo’s supply chain, a model that has allowed them to have lighter assets and therefore lower costs.
Realme’s pop-up store in India / Photo: Realme
“Realme has an advantage because we share a supply chain with Oppo. We are able to get very good resources on the supply side, stay ahead globally and get what we do. should have, ”Xu said.
For example, the fledgling phone maker was among the first to get Qualcomm’s new Snapdragon 865 chips and put four cameras in one handset. However, priority is not always guaranteed, as “there is definitely a competition between us and our peers to strive to be the first,” admitted Xu. “Of course, it also depends on the progress of research and development of each team.”
The thin asset strategy also means that Realme is able to offer competitive technologies at relatively low prices. In India, its 8GB RAM, 128GB phone cost less than 1,000 yuan ($ 152) and its notch display model cost less than 1,500 yuan ($ 228).
Realme is not concerned about increasing the margin in the “growth phase,” Xu said, and the business has “been profitable from the start.” On the flip side, the phone maker is also introducing a slew of IoT gadgets like smart TVs and headphones, categories with higher margins.
The smartphone plus IoT strategy is certainly not unique, as its BBK family siblings, as well as Xiaomi and Huawei, have the same vision: smartphones and smart devices of the same brand will form a well-interconnected, stimulating ecosystem. sales and data collection for each other.
Another way to cut costs, according to Xu, is to avoid extravagant outdoor advertising. The company prefers more subtle word-of-mouth promotion, such as working with influencers, launching campus music festivals and foster an online fan community. And the strategy seems to click with the younger generation who love to interact with the brand they love and even be part of their creative process.
The more enthusiastic users would sometimes message Xu with a pencil sketch of what they imagined the next Realme products should look like. “They have very interesting and great ideas. It’s a great generation,” said the executive.
Chinese brands are going global
A Realme event during Diwali / Photo: Realme
Madhav Sheth, Managing Director of Realme in India, is also loved by young consumers in the country. A former Realme distribution partner, he impressed Realme founder Li, who “understands the Indian market very well even though he is not fluent in English,” according to Xu.
“Sheth is very charismatic and good at public speaking. He knows how to turn people on.” Xu praised Sheth, who is an avid Twitter user and has garnered some 280,000 followers since his arrival in the spring of 2018.
The job of the Indian boss becomes more complicated as India becomes wary of Chinese influence. In June, the Indian government forbidden TikTok and dozens of other Chinese apps on potential national security risks soon after added more control over Chinese investments. Anti-Chinese sentiment also soared while border tensions have intensified recently.
Against all odds, Realme is experiencing robust growth in India. In the third quarter, it grew 4% from the previous quarter and currently ranks fourth in India with a 10% market share, according to the research firm Counterpoint.
“At the start of the quarter, we saw some anti-Chinese sentiments from consumers impacting the sales of brands originating in China. However, these sentiments have subsided as consumers also weigh in on various parameters when shopping. “the researcher wrote in the report. .
“Of course, the Indo-Chinese conflict is not something we want to see. It is a problem of international relations. Realme does not participate in politics,” Xu assured. “There will always be extremist users. What we can do is expand our fan base, give them what they want and leave the extremists alone.”
Next year, Realme is looking to accelerate its expansion in Europe, Russia and its home market, China. None will be a small feat as these are highly coveted markets for all of the major phone makers.
Realme’s onion-inspired model designed by famous Japanese designer Naoto Fukasawa
Part of Realme’s efforts to connect with what Gen Z around the world considers “cool” is to work with top designers. Xu’s eyes lit up, raising his hand in the air like he was holding a ball. It mirrored Naoto Fukasawa, the famous Japanese industrial designer who came up with the onion-inspired color and pattern of the Realme X model.
“The afternoon sunlight was streaming through the large windows. [Fukasawa] gave me a playful look, took an onion from under the table and said this was his inspiration, ”Xu recalls. “He slowly turned the onion to the sun. I was stunned. The veins, the pink, the gold color, the texture. It was so beautiful. You wouldn’t think it was an onion. You would think it was a craft. “