- China-based Realme which was launched in India in May 2019 is taking on the Indian market leader Xiaomi by opting for the strategy used by Xiaomi.
Realme, which launched in May 2019 as an Oppo sub-brand, was spun off into a separate company promptly. The Shenzhen-based company reported a remarkable 600 percent year-over-year growth in India between June and August 2019. Recent data from International Data Corporation (IDC) show that the number of its buyers in the subcontinent rose by a whopping 400 million from a year ago in the quarter ended September 2019.
Although Realme accounts for only 3 percent of the country’s total smartphone market, compared to the 27 percent of Xiaomi, its strategy is closely opened by the market leader, experts say.
“The success of Realme is a perfect story of a new brand trying to take on a giant (Read Xiaomi) in their play,” said Navkendar Singh, a research director based in Gurugram with IDC India.
Unlike other Chinese players such as Vivo and Oppo, who are heavily offline oriented on channel advertising and offline distribution investments, Realme has centered from the start online. “Realme began as a direct competitor to Xiaomi in all respects, mainly via online, similar price points and segments from Rs7,000 to Rs20,000 ($98 to $280)—where Xiaomi dominates and has been extremely successful in providing the latest specifications at very affordable price points,” Singh stated.
The online game of Realme & Xiaomi
Unlike Xiaomi, Realme sold devices for a year to slash overheads exclusively through an online network.
Xiaomi, based in Beijing, led the digital channel with a market share of 40% in the third quarter of the financial year 2019 (July-September period), with four out of the top five models sold from Xiaomi, IDC data show. While Realme is still a small fish, it performs extremely well. During this span, the digital share of the company stood at an all-time high of 26.5 percent, a big jump over the previous quarter from 16.5 percent.
This pattern is likely to continue as internet and smartphone adoption thrives and as e-commerce in India continues to develop, experts say.
“The growth and maturity of online channels from serving more zip codes than ever, coupled with increased customer service, enticing deals from discounts to cashback to EMI, and exchange offers will be crucial to driving smartphone sales during this festive season, as well as taking a large share of off-line channels,” said Anshika Jain, Counterpoint Market Research Research Analyst.
Funnily enough, the Internet’s platform of development is also a battleground for both brands. Xiaomi and Realme’s top bosses have shared their rivalry terms.
Source- Mi
In April this year, Xiaomi’s Manu Jain tweeted that the Realme 3 Pro featured an older processor than the one used in Xiaomi’s Redmi Note 7 Pro. Madhav Sheth, CEO of Realme India, hit back at Xiaomi for being “afraid.”
Short-run or long-haul?
While Xiaomi pips a mile for Realme’s total sales, once you zoom in, the younger company performs as well as the older one.
For example, four of the ten highest-selling mobile phones are Realme and four Redmi, the cheaper Xiaomi sub-brand, during CashKaro’s seven-day Diwali sale this October. Also, between Sept. 30 and Oct. 31, Realme leveraged a series of Diwali sales— four of them— in which it sold 5.2 million units to become Flipkart’s top-selling mobile brand.
“Realme uses viral media and social marketing campaigns to reach younger customers such as learners,” said Neil Mawston, Strategy Analytics ‘ executive director of wireless device strategies.
Yugal Joshi, vice-president of Texas-based consultancy Everest Group, adds that in addition to digital marketing, Realme “seems to target the young crowd and concentrate on schools, conferences, cultural festivals, and so on.” While concerted efforts are being made, the big question is whether Realme has had some beginner’s luck or whether it’s here for a long time.
“Realme is speeding on mobile pricing to the top, and we’re curious if it’s sustainable breakneck rate,” Mawston said. “We agree that Realme is in danger of too much stock being over-shopped and installed in India. Realme’s going to be much harder next year.
