BBK Electronics the owners of Oppo Vivo and Realme have a major problem looming as millions of consumers move away from their Chinese made smartphones due to security concerns and conflicts with the Chinese Communist Party.
Things are getting so bad in India where brands such as Realme once dominated that the organisers of Indian’s Premier League 2020 which is slated to be held in the United Arab Emirates from Sept. 19 to Nov. 10 dropping BBK brand Vivo for a local online betting group Dream11.
The Board of Control for Cricket in India and Vivo Mobile parted Company after massive pressure from local consumers and organisations concerned over Vivo’s Chinese connections.
Anger was mounting against Chinese smartphone brands after a forced face-off on June 15 that left 20 Indian soldiers dead and unspecified casualties on the Chinese side.
Earlier, the BCCI had come under criticism for not dropping Vivo as the IPL title sponsor.
Two days ahead of the official announcement about suspension of the Vivo sponsorship, local media reported that the Chinese company was pulling out of the upcoming IPL edition following backlash it faced on social media.
The Confederation of All India Traders, which represents over 70 million traders across the country, and Swadeshi Jagran Manch, the economic wing of Hindu nationalist Rashtriya Swayamsevak Sangh or National Volunteers Organization, had severely criticized the BCCI over the Vivo deal.
In an Aug. 3 letter to Indian Home Minister Amit Shah, CAIT secretary-general Praveen Khandelwal said the “decision of the BCCI [to retain Vivo as the title sponsor] smacks [of] its lust for money.”
In Australia BBK Electronics brand Realme is struggling to get traction in Australia with their direct sell web site only attracting 6,300 visitors last month.
A cheap bottom end sister brand of Oppo Realme is now looking at the local China market to get growth despite not having a strong presence in China.
Realme’s greatest success has been in India — where Chinese tech groups have become political targets in recent months after the deadly flare-up in tension between Beijing and New Delhi.
The Shenzhen-based company behind Realme, Ruiermi Mobile Communications a division of BBK Electonics, has set 50 million units worldwide as a sales target for 2020 but with the backlash in India this could be a hard target to achieve according to analysts.
Sky Li, founder, and chief executive of Realme told the Nikkei Asian Review in a recent interview that the 5G rollout in China would give impetus to the company’s plans. “We may be a bit late but the rapid growth of the 5G market is an opening for us,” said Li
Key to Realme’s previous success has been its penetration into India and Indonesia. The two highly populated markets account for about 80% of sales.
“India is sort of like a home market to Realme,” said Flora Tang, an analyst with Counterpoint in Hong Kong.
According to Counterpoint, by the first quarter Realme had surpassed Oppo to become the number four smartphone brand in India, with 14% market share. The top three were Xiaomi at 30%, Vivo at 17% and Samsung with 16%.
Sales of Chinese smartphones including Realme took a beating in the second quarter of 2020 with sales down over 40%.
Now Realme is trying to build on China’s 5G rollout to address its lack of brand recognition there.
China’s market is highly concentrated: five brands — Huawei, Oppo, Vivo, Xiaomi and Apple — accounted for 95% of the market in June, according to Counterpoint.
Analysts said Realme’s target of achieving sales of 50 million by focusing on the Chinese and European markets was too ambitious and that their entry into the Australian market had not delivered the results they expected. They also have “no chance” of getting into the USA market where archrival TCL is starting to get traction with their new TCL 10 Pro handset.
Some analysts tip that Realme will struggle to do 30 million due to the collapse of their Indian business.