How Chinese Phone Brand Realme Shipped 200 Million Phones In A Declining Market
Observing Shenzhen's tech scene closely since 2016, I have seen the growth of brands ranging from small startups or sub-brands of large companies to well-known names. This includes Insta 360, whose products are currently sold in Apple stores, and XReal, whose AR glasses are market leaders. Realme is another, and it recently hit a major milestone.
According to figures backed by Counterpoint Research, Realme shipped 200 million phones in November. I've covered Realme extensively since its inception, testing the brand's second product for the first time. Realme has always made devices with great value for money, so moving 200 units was impressive, but not surprising. But Realme achieved this in just five years, according to Counterpoint, making it the fifth-fastest smartphone brand to reach the 200 million mark behind Vivo, Huawei, Samsung and Apple (respectively).
One name noticeably missing from the list is Oppo, the parent company of which Realme was initially launched in 2017. Realme officials said that although it is now an independent company, it shares the same lineup of products than Oppo and is owned by BBK, which owns Oppo, Vivo and OnePlus. So, even though Realme is a nascent brand, it is under-resourced.
However, Chase Xu, Realme's chief marketing officer, told me that to enter the top 10 smartphone brands in terms of market share, the brand will have to overcome difficult challenges.
“In 2019 we had inflation, demand for new phones dropped, and then Covid,” he said. “In some markets, we had no choice but to close all of our independent stores.”
Although Xu did not specify in which market, I have personally seen the disappearance of Realme stores in Thailand over the past two years. Xue said the company launched an aggressive e-commerce campaign to prevent sales from falling too much during the Covid years.
In markets like the Philippines, Realme has used aggressive marketing to achieve the top ranking through online channels and partnerships with local brands.
Another reason for Realme's popularity is that the company does not shy away from collaborating with other brands by launching special edition phones like the Coca-Cola-themed Realme 10 Pro or the Dragonball Za GT Neo 2.
Realme helps make great phones. The latest device GT 5 Pro with iQoo 12 is a very good value for money smartphone. It costs RMB 3,499 (US$419) in China and is powered by Qualcomm's latest Snapdragon 8 Gen 3 processor and uses Sony's Lytia sensor. These components are advanced and are not even available in phones announced a few months ago. In North America again (and it will be on $1,000 devices).
In fact, the specifications of the Realme GT5 Pro are lower than those of BBK brands like Oppo and OnePlus. Oppo's latest flagships also feature discrete silicon.
“We are not afraid to take the first step in terms of using advanced [technical components],” Xu said.
Sure, it's good to sell a lot of mid-range phones at high prices, but it's even better to sell a lot of high-end flagship phones. In this regard, Realme faces a challenge that many other Chinese sub-brands face: maintain its value proposition or take it to the next level, selling high-margin products but alienating customers?
Xue said the company always prioritizes the needs of young consumers. This is definitely a PR marketing response, but at least Realme products get the message across.