In the past few years, Chinese smartphone brands have been flooding the Southeast Asian market. Offering high quality at affordable prices, they managed to break the Samsung-Apple duopoly.
According to a report from research firm Canalys, Chinese products represented 62% of Southeast Asia’s 30.7 million smartphone shipments in Q2 2019. Brands such as Oppo, Vivo, and Xiaomi are gaining ground and are now beating Samsung in several countries.
There is still room for new players such as Realme. Home to around 650 million people and with a 70% mobile penetration rate, Southeast Asia is a highly lucrative market where Realme wants to grow its share. In less than two years, the company claims to have reached already around 11 million users.
Originally a sub-brand of Oppo, Realme was established as a separate entity in May 2018, still under the China-based multinational BBK Electronics. The company entered Southeast Asia in the last quarter of 2018, and immediately gained momentum. Abhilash Kumar, an analyst with Counterpoint Technology, attributes the brand’s success to a focused marketing effort targeting young audiences.
Realme offers smartphones that are covering all segments, starting with the under-USD 200 C-series to the high-priced X series. The company also launched a smart TV, smart band, smartwatch, and wireless audio headsets.
KrASIA recently spoke with Realme’s Southeast Asia marketing director, Sherry Dong, about the brand’s strategy in the region, how young people consume technology products, and what we can expect next.
KrASIA (Kr): Realme is popular in the low-end market segment, though you have also flagship products such as Super Zoom X3. Do you have any plans to double down on the mid-to-high market segment in the near future?
Sherry Dong (SD): Realme has covered all price segments with the C-series, digital series, digital-Pro, X-series, and X-Pro series, providing young customers surprising “dare-to-leap” products of all price segments. The overall smartphone market is like a funnel, where the low- and mid-segment serves as the base. Realme, as a popular brand, has a large number of shipments in these segments.
But we’ve performed well in the high-end and flagship segments too. For example, during Lazada’s 4.4 event in Malaysia, Realme 6 was the No.1 smartphone model. On day one, X3 SuperZoom was the best-selling smartphone within its price range. That shows that Realme is popular in the mid-to-high market segment too.
On the smartphone side, Realme will continue to bring products with the best design, performance, and value to all markets including Southeast Asia. This year, we launched 5G products from entry-level to flagship-level. Realme also wants to be the world’s fastest-growing AIoT brand. In May, we’ve reached 1 million users for the audio-AIoT products, such as the Realme Buds Air.
Kr: What makes Realme so successful in the region, aside from the affordable price and good quality? It is often mentioned that partnerships with e-commerce platforms help to push sales.
SD: Since its establishment, Realme has been committed to be the first choice for young people everywhere in the world. Smartphones have become an expression of the personality of young consumers and Realme strives to provide products with trend-setting tech, performance, and design that is beyond expectation. Realme has deep insights of the Southeast Asian smartphone market and tailors its products to the needs of young local users. The price and good quality are the foundation.
Realme also strives to reach young consumers through their own language. From its choices of brand ambassadors, young and trendy icons in each market, to launch events that are held in nightclubs, on school campuses, and other unconventional sites, Realme demonstrates its trend-setting brand attitude and “dare-to-leap” spirit to the fullest.
The cooperation with e-commerce platforms serves to bring consumers a more economical and handy shopping experience in the Southeast Asian countries.
Kr: Can you talk about characteristics, challenges, and potential of the Southeast Asian market? Why do you target specifically young people and how does this affect product development?
SD: According to the report from Canalys, Southeast Asia is popular for new brands, with higher chances of success than in other parts of the world. Given the vast population, the development of online and logistical infrastructure, and increased local production capability, a lot of smartphone brands are actually investing heavily.
A Barclays report from 2018 shows that Generation Z is with about 1.9 billion already the most populous group in the world. These young people not only have sufficient consumption power and willingness, but also have different consumer needs, habits, and preferences. Those brands who won the hearts of young consumers won the market too.
We are collaborating with the renowned designer Naoto Fukasawa on our “master version” smartphones, such as the X2 Pro Master Edition, which has won the Red Dot Design Award. We also cooperate with French contemporary artist and Hermès designer José Lévy for the Realme Buds Q.
Kr: One important factor that determines the success in a foreign market is adaptability. The adaptation process might be challenging due to multiple barriers such as culture, language, and others. Can you let us know how Realme overcame this problem?
SD: By now, Realme has entered 27 regions and countries globally. According to the different needs, Realme optimizes products, marketing, and channels. We establish localized marketing teams to target the local youth culture. Team members with an average age of less than 30 years share common values with local users and know the young consumers best. A young and localized team can accurately grasp the consumer, which lays a solid foundation for rapid growth.
We have a mature system for research and feedback. For example, based on the different aesthetics in each market, Realme develops its AI beauty algorithm accordingly.
Kr: What are your targets and focus for Southeast Asia in 2020? Will you ramp up offline sales?
SD: We will introduce AIoT products from various categories. At present, more consumers are shopping online in either our official or non-official stores on e-commerce platforms, where we cannot track sales specifically.
But that does not mean that we rely mostly on online sales. In Southeast Asia, Realme has had strong relationships and cooperation with our dealers. We are still at an early stage as a young brand. We aim at long-term and healthy growth. Therefore, Realme will build cooperative relations and provide more benefits to its dealers, retailers and sales, which will drive motivation as well.
The interview has been edited for length and clarity. Watch Sherry’s session How to Break the Barrier and Seize the Overseas Youngsters on Globiz Webinar.