Gathering and dispersing and rising and falling: Rongmi OV started the channel defense war

Tencent News Deep Web

2024-05-31 16:39Published on the official account of the "Deep Web" column of Tencent News in Beijing

Image source: Visual China  

Author丨Enron 

Editor丨Yu Chen

Produced by丨Deep Web Tencent News Xiaoman Studio

In the era when e-commerce is king, the sales volume of domestic mobile phone manufacturers is still an offline channel accounting for 70%. The gathering and dispersion of core offline channel providers can affect the market share and even the rise and fall of major leading brands. With the return of Huawei mobile phones, the pattern of offline channel providers has been disrupted again.

A tragic channel defense war is being waged between brands such as Honor, vivo, OPPO, and Xiaomi.

In mid-May, a provincial branch of vivo convened a meeting of core offline channel providers, and there was only one central topic to promote core channel merchants to open more stores. In order to mobilize the enthusiasm of core channel merchants to open stores offline, the company will take out two points of the delivery amount to subsidize the channels of newly opened stores.

Some vivo core channel providers revealed to the "Deep Web" that the subsidy policy is divided into two categories, one is for authorized experience stores, the sales volume of authorized experience stores under the core channel company has reached the standard of vivo head office, and the newly opened authorized experience stores can apply for 40%-50% housing subsidy (rental subsidy); Second, for the store, the company will take out two points of the delivery amount to the newly opened store to make a house supplement.

"There are only 1-2 authorized experience stores in my area, and this subsidy policy is mainly for specialty stores, and the core is to promote the opening of more exclusive stores through channels. Since the vivo branch has the decision-making power, the old store with a large amount of goods can also apply for housing allowance and have to talk to the company by themselves. A vivo channel provider in an eastern province revealed to the "Deep Web".

vivo took out two points of subsidy for the amount of delivery, and offline channel providers are just a microcosm of the industry.

"After Huawei's mobile phone returns to the 17% market share of the domestic mobile phone market, the cake of the original few companies will definitely be dissolved. As the main sales channel of mobile phone manufacturers, the competition in offline channels has entered a white-hot stage. In the next few quarters, an important point to watch is the competition between various manufacturers in offline and end-to-end sales channels and the highlights of popular products. Wang Jiping, vice president of IDC China, told the Deep Web.

Huawei has flipped the scales

"Before 2023, I mainly made vivo products, and there was only one Huawei store, and now the number of Huawei stores has increased to three." Channel businessman Zhang Hua (pseudonym) revealed to "Deep Web".

Zhang Hua is not an exception, last year, some OV and Honor channel providers began to tilt their trading funds appropriately towards Huawei.

According to the "Deep Web", this change is mainly caused by two factors. First, there is a gap in the comprehensive gross profit margin of terminal stores of different mobile phone brands; Second, channel providers want to seize the bonus period when Huawei returns to 5G speed.

In terms of gross profit margin, a number of channel providers revealed to the "Deep Web" that the current comprehensive gross profit margin of OV mobile phone channel providers is between 5% and 10%, while the comprehensive gross profit margin of Huawei mobile phone channel providers is between 8% and 12%.

In the second half of last year, Huawei's mid-to-high-end mobile phones (Mate series, Pura series, and Nova series) gradually resumed 5G speed and mass production. In order to seize the dividends of Huawei's mobile phones returning to 5G, some channel providers need to increase Huawei's offline stores to pick up more products with premiums in the early stage, such as Mate60 pro and MateX5.

A person familiar with the matter told the "Deep Web" that in the middle of last year, Huawei launched a "colleague plan" within the core channel providers, that is, in addition to distributing the Mate60 series according to the level of the channel provider, Huawei's smart products such as TD Tech and Youchangxiang can get more quotas for the Mate60 series according to the delivery ratio.

According to the "Deep Web", within two months since Huawei released the Mate 60 series and MateX5 series last year, the Mate 60 pro and MateX5 have high premiums in the secondary market of mobile phones. For example, in October last year, Mate60 pro (12GB+512GB) Yachuan Qingneng had a premium of about 1400 yuan; When the MateX5 was first launched, the premium in the secondary market ranged from 5,000 yuan to 9,000 yuan.

"Last year, Huawei's return to 5G had a bonus period, and coupled with the lack of stock in the early stage, the channel providers who got more distribution of Mate60 pro and MateX5 did make money, so some peers have a tilt towards Huawei stores with stock funds, but whether this money-making situation can be delayed to Huawei Pura 70 series is still unknown." Some channel providers revealed to the "Deep Web".

今年4月18日,华为发布了Pura 70 Pro、Pura 70 Pro+和Pura 70 Ultra三款机型,搭载麒麟9010芯片。 有二级市场的分销商对《深网》透露,前期仅Pura 70 Pro的256GB和512GB有700元左右的溢价,Pura 70 Pro的ITB版本、Pura 70 Pro+和Pura 70 Ultra备货充足,在线下门店都有现货,没溢价。

In addition, on the occasion of the 618 promotion, the price of Pura 70 Pro+ and Pura 70 Ultra in some channels began to be reduced, with a maximum discount of 1,000 yuan.

In terms of channels, according to the "Deep Web", Huawei has stipulated at the end of last year that Huawei's core merchants (including NKA customers and Golden Seed customers) should concentrate on operating Huawei products, and it is forbidden to do other brands.

The "subsidy war" such as rent has escalated

In order to stabilize the core channel providers, OPPO, vivo, Honor, Xiaomi and other manufacturers have launched a new round of competition in rent subsidies and salesman commissions.

According to the summary of the offline channels visited by "Deep Web" in the early stage, at present, OPPO, vivo, and Xiaomi all have a "housing subsidy" policy; Huawei and Honor have not yet introduced rental subsidies, but they have financial support in terms of FM managers, promoters and promotional materials.   

OPPO's "housing subsidy" policy has a long history, and now it will provide a two-year rental subsidy for newly opened stores.

"The share of rental subsidies is linked to the number of stores and sales. For example, if our company has more than 6 OPPO stores, if the quarterly sales volume is not less than 4,500 units, you can apply for a rental subsidy of about 40% of the rent. Some OPPO channel providers revealed to the "Deep Web".

vivo did not have a rent subsidy before, and the subsidy for core channels was mainly reflected in after-sales service.

According to the "Deep Web", in order to ensure the quality of after-sales service, vivo will rent a certain space in the department store of the core channel to do after-sales service for users, and share part of the rent for channel providers in disguise.

"The specific rental and sales area and rent need to be negotiated with vivo staff." Some channels of vivo revealed.

This time, vivo took out two points of the delivery amount to make rental subsidies for channel providers, which is also to deeply bind with core channel providers. "Old stores can also talk about rent subsidies according to sales, and the subsidies are different in different regions." Some vivo channel providers revealed to the "Deep Web".

In the second half of 2022, Xiaomi began to promote rental subsidies for Xiaomi experience stores. A person familiar with the matter told the "Deep Web" that "Xiaomi's rent subsidy is only for newly opened stores, and the proportion of housing subsidy can reach 50% if the specified sales are met." ”

At present, Huawei and Honor have not yet launched a "housing subsidy" policy for offline channel providers, and their subsidies for channels are mainly focused on the configuration of promoters and promotional gifts.

Youhua is a core businessman who revealed to "Deep Web", "During the New Year's holidays and holidays such as November and May Day, Huawei's offline promotional activities such as gifts, hosts, models, and promoters are all paid by Huawei, but there is no rental subsidy." ”    

An insider revealed to the "Deep Web" that Honor has not launched a "housing subsidy" policy, but has increased the reward for terminal store promoters since the end of last year. "In the store where I am located, OV sells a mobile phone to the promoter with an additional reward of 10 yuan, and the reward for selling a glory is 50 yuan."      

According to the "Deep Web", Honor will increase the laying of offline channels this year. Zhao Ming, CEO of Honor, has publicly stated that he will work with partners to create a "Thousand Store Plan" in 2024.

The troubles of channel providers

OV Rongmi has increased subsidies for offline channels, on the one hand, in response to the comeback of Huawei mobile phones, and the root cause is that offline channel providers are the basic plate that supports the sales of mobile phone manufacturers.

Overall, there are two paths to mobile phone sales: online and offline. "In addition to Xiaomi's online sales, the sales of the remaining head mobile phone manufacturers are mainly based on offline channels, accounting for about 70% of the total." Guo Tianxiang, a senior analyst at IDC China, told the Deep Web.

"For brands (mobile phone manufacturers), distributors such as national packages, provincial packages, and municipal agents are necessary links to open up the entire sales channel, and have the function of a capital reservoir. Provincial packages and other big merchants take goods in cash at manufacturers, while manufacturers sell mobile phones online such as Jingdong self-operated with account period and payment pressure. The core channel provider of a leading mobile phone manufacturer explained to the "Deep Web".

In the stock mobile phone market, product inventory and rent expenses are the main costs of operating offline stores, which is also the main source of troubles for channel providers.

Mature mobile phone channel providers understand that this industry "does not starve to death, only to die". If the inventory of several mobile phones is not well controlled, there will be a chain reaction, and even the accumulation of several years will collapse on the inventory.   

The application for housing subsidies and sales rebates are linked to the amount of pick-up, and some stores of individual brands will release goods and string goods in order to complete the sales task. "OPPO and vivo strictly prohibit cross-regional sales, and if it is found that there is a cross-shipment, a fine of up to 20,000 yuan for a mobile phone is even as high as 20,000 yuan." A secondary market distributor revealed to the "Deep Web".

For Huawei's core channel, the main trouble comes from "bundling and picking up".

According to the "Deep Web", Huawei has a stronger control over offline channels, and core channel providers need to pick up chargers, mobile phone cases, smart glasses, smart watches, tablets and other IoT products while picking up popular mobile phones such as Mate and Pura, as well as Huawei's smart products such as TD Tech M40 and Youchangxiang.

"Mobile phone users such as Youchangxiang have low perception, and the delivery is inventory, and many can only be sold at a loss; However, IoT series products are not in demand, and they are more difficult to sell than mobile phones. Some Huawei channel providers revealed to the "Deep Web".

In the eyes of some offline channel providers, there are no mobile phones that cannot be sold, only mobile phones that refuse to reduce prices.

"If I liquidate now, OV phones can be sold at a 9% discount to recover the funds. However, Huawei can only get back more than half of all its products, because it has more IoT series products. A mobile phone channel provider made such assumptions about the "Deep Web".

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