Oppo has platform to carve out a niche in a crowded UK market

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The Chinese vendor will have a challenge on its hands, but Carphone deal gives it a good launchpad

The duopoly of Samsung and Apple in the UK has been challenged in recent times, with Chinese giant Huawei leading the fight.

Huawei’s strong performance in the past two years has given hope to more Chinese players, with OnePlus, Honor and Xiaomi entering the market.

The lure of the UK’s smartphone arena is too “irresistible” to ignore, says CCS Insight chief of research Ben Wood.

That could well be the case for Oppo, which become the latest Chinese name to join the UK market, following a launch event on January 29 at Tower Bridge in London.

But who are Oppo, and does the smartphone market need another player?

Shipments

Oppo is the world’s fourth-biggest smartphone manufacturer, behind only Samsung, Apple and Huawei, according to IDC statistics.

Oppo shipped 29.2 million smartphones worldwide in the fourth quarter of 2018, a growth of 6.8 per cent year-on-year. This was bettered by third place Huawei’s 60.5m.

The company’s move into the UK isn’t too surprising, given that it has established itself in other key European markets such as France, Italy, the Netherlands and Spain.

At the launch event, attended by around 150 people who were mainly members of the press, Oppo executive director of sales for the UK Terence Tan suggested the vendor has been planning this move for some time.

Tan told attendees: “This has been one of the brand’s most anticipated European decisions so far, and we are proud to be bringing Oppo to this market.”

At the event, he announced that Oppo has partnered with retail giant Carphone Warehouse to sell its phones through the retailer in the UK on an initially prepaid basis.


Chinese brands

With Chinese smartphone brands growing in popularity, uSwitch head of commercial for broadband and mobiles Ernest Doku says Oppo’s UK launch is “significant”.

“Oppo has entered a market that has gone past having a stigma of Chinese brands,” he says. “It has come into the market at the right time with Carphone Warehouse, which will lend some credence to the brand.”

Independent technology, media and telco analyst Paolo Pescatore is also unsurprised at seeing Oppo joining the smartphone battle royale, and is under no illusion about the importance of the UK market for the company.

“Oppo’s approach is really smart with the way it has grown into European markets, and with this will have a good understanding of them,” he says.

“The UK is the one market that everyone wants to crack, and credit to Oppo for realising this. This year is about it establishing its brand and presence there.”

IDC senior research director Francisco Jeronimo believes that the company’s chances have been helped by Huawei’s success.

“We’ve seen the likes of Huawei grow in recent times and consumers aren’t as dependent on the brands they know,” he says. “They’re now more open to trying brands they don’t know as well, providing there is a good proposition.”

Success factors

So what does the company need to do to be successful here?

For Wood, it’s as simple as showing its ability through investment.

“Oppo will need to spend money if it wants to get the support of the channels, and the channels will want products to come with it,” he says.

He adds that the vendor will also need to be innovative, something he says it has done with the pop-up cameras on its Find X. “Oppo has displayed some good camera technology,” says Wood.

Jeronimo believes, meanwhile, that the company will need to forge solid relationships to make its mark.

“Building strong partnerships will help Oppo to build a successful story. When it gets in with an operator, it will be interesting to see,” he says.

Oppo has initially launched three smartphones in the UK – the RX17 Pro, RX17 Neo and flagship Oppo Find X.

A strong range of smartphones is crucial, says Jeronimo, who is impressed with the mix of devices the company is bringing to the UK.

“I would say Oppo has got a good balance between the low end and high end, and has brought some good phones to the UK,” he says.

Doku agrees: “It will need to bring out good phones across different price points and gain the support of the networks for the channel.

“The operators need to have the reasurrance that Oppo as a brand will be able to deliver.”


Carphone deal

Oppo announced its arrival in the UK with an exclusive partnership with Carphone Warehouse.

Under the deal, the vendor’s handsets are now available to buy in-store and online at Carphone Warehouse and Currys stores.

The partnership will provide Oppo with a solid start in the UK, says Wood.

“Carphone is a massive retailer and will give Oppo a great footprint, as Carphone can provide sustained long-term positioning,” he says.

Wood adds that the success of the partnership will come down to how hard Oppo and Carphone Warehouse work to raise awareness of the brand. “Oppo will need to work really hard with the Carphone Warehouse team,” he says

Jeronimo agrees that the partnership is a solid one that provides a real opportunity for the smartphone vendor.

“If the relationship with Carphone is good, it will influence how well Oppo does,” he says.

“If Carphone Warehouse can incentivise its staff to sell Oppo, this could be important.”

Jeronimo adds that having sales reps from the vendor training members of staff across Carphone Warehouse’s stores would benefit the brand and increase its chances, boosting knowledge behind the product.

However, Doku has identified the current set-up with Carphone Warehouse as also presenting a potential “hurdle” for Oppo.

“The strategic tactic of getting in with Carphone makes sense, but the decision to be SIM-free at this point will prove to be a hurdle,” he says. “Traditionally, consumers will still look for contracts.”

Crowded market

In the UK, meanwhile, Oppo joins a crowded smartphone market that has declined in recent years.

Aside from the likes of Apple, Samsung and Huawei, the market contains household names such as Sony, LG, HTC, Nokia (through HMD Global) and the emerging brands from China such as OnePlus and now Xiaomi.

Yet despite the plethora of options, Doku says there’s still every chance that Oppo can find its place.

“It’s a busy market, but I don’t believe it is completely saturated and there are opportunities to carve out a niche,” he says. “Oppo can do this by supplementing a challenging market with brand awareness and positive sentiments, and package up something different to consumers.”

Wood thinks the vendor’s presence will, meanwhile, pose a challenge to those already in the UK.

“It’s a very crowded market in the UK, and Oppo’s arrival will put pressure on many brands that are in this market,” he says.

 

Challenges

Among the challenges that Oppo itself faces in the new market, Doku cites pricing as one area to be addressed.

“Price will be a massive factor, and consumers will have devices they will favour. Even Apple hasn’t been immune from the pushback of selling higher-priced phones.”

Doku also cites the timing of Oppo’s UK launch as a challenge, coming just weeks before a number of high-profile phone launches anticipated at the Mobile World Congress.

Meanwhile, Jeronimo points to the UK being propelled by high-end phones as another potential poser for those looking to target different price points.

“The UK market is tough and is one that is driven by high-end devices,” he says. “In particular, it has been for some time a market that is very Apple-driven.”

Pescatore adds that the mix of a growing market for refurbished devices and a more knowledegable consumer could make things harder for new entrants such as Oppo.

“Beyond the competitive landscape, the UK consumer is very savvy, with longer lifecycles and a growing secondary handset market which is thriving at the moment,” he says.

Open minds

Yet despite this backdrop, analysts believe that overall there are real opportunities for Oppo to succeed.

A more open-minded approach that has developed among UK consumers to unknown brands can help Oppo, says Wood, who believes Huawei’s success gives hope to new arrivals.

“Historically, British people have been conservative in their approach to buying known brands, but Huawei has changed that since coming into the market,” he says.

“If this was a few years ago, I wouldn’t have expected Oppo to have much of a chance, but now I do.”

Jeronimo is also optimistic for Oppo, saying it has the chance to make the most of a market with such a high average selling price (ASP) by building a brand with a strong high-end presence.

“There are not many markets around with such a high ASP, and Oppo can target this segment with its flagship devices,” says Jeronimo.

Pescatore feels that Oppo has opportunities for partnerships beyond just Carphone Warehouse, and that it can extend its reach with more deals.

“The timing of Oppo coming to the UK seems right and Carphone Warehouse provides a great start.

“There are also more chances to broaden distribution beyond just the high street for Oppo.

“There is no guarantee that OPPO will be successful – but given what we have seen with other vendors, you can’t rule them out”, says Pescatore.

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