May 2008. OPPO’s first mobile phone is officially on sale in China. The A103, which people are calling the “Smiley Phone” because of its rounded design language, is a feature phone — no Android, no touchscreen, no app ecosystem. A calling and messaging device with a camera, running a custom Chinese mobile operating system, sold through the offline retail channels that OPPO has been building across Chinese provinces since the company’s founding. The A103 is not attempting to compete with Nokia or Samsung on international benchmarks. It is attempting to capture a Chinese domestic market that is, in 2008, one of the fastest-growing mobile phone markets in the world and still overwhelmingly served by feature phones rather than the smartphones that are just beginning to define what a phone could be.
The A103 does not matter for its specifications. It matters because entering mobile in 2008 is the correct timing decision, and the distribution strategy OPPO brings to the mobile market — deep offline retail presence, carrier partnership relationships, significant marketing investment through television advertising and celebrity endorsements — is the same strategy that will make OPPO the best-selling smartphone brand in China eight years from now.
The offline retail bet and why it works
OPPO’s approach to the Chinese mobile market is not the approach that will define international smartphone coverage a decade later. OPPO is not building an online community. It is not positioning against the incumbents on specifications. It is building the widest possible offline retail footprint across China’s tier-2 and tier-3 cities, where the buyers who have not yet owned a smartphone are concentrated and where the brand that has shelf space in the local electronics store will be the brand that converts those buyers when they make their first smartphone purchase.
This strategy is the opposite of what Carl Pei and Pete Lau will do at OnePlus in 2013. OnePlus targets the online tech enthusiast who has already decided to buy a smartphone and is now deciding which one. OPPO targets the buyer who has not yet bought a smartphone and needs to encounter a brand in a physical store. Both strategies work. They target different people in different markets with different information environments. The fact that OPPO’s offline retail strategy is relatively invisible to Western tech media for most of its existence is not evidence that the strategy is less important than the OnePlus model. It is evidence that Western tech media pays more attention to markets where it operates than to markets where it doesn’t.
April 2009: First exports
In April 2009, OPPO officially begins exporting mobile phones. The first markets are Southeast Asian: the region that will become OPPO’s most important international base before India and before Europe. Vietnam, Indonesia, Thailand, and the Philippines are markets where OPPO’s offline retail playbook can be replicated with local adaptations. The celebrity endorsements, the retail shop-in-shop presence, the focus on camera quality for social media sharing — these resonate in markets where social media adoption is accelerating and where the buyer making a first smartphone purchase is influenced more by what they see on a store shelf than by what a tech reviewer publishes online.
The Southeast Asian expansion in 2009 is already the proof of concept for the international growth model that will eventually put OPPO in 70+ countries. The fact that it is happening through feature phones rather than smartphones, and that it is largely invisible to the English-language tech press at the time, is not a limitation of the strategy. It is the advance work that makes the eventual smartphone expansion possible. By the time OPPO launches its first Android phone in 2011, it already has distribution infrastructure, carrier relationships, and retail presence in a dozen markets. That lead time matters enormously.
Part of OPPO: The Complete Story, my full history of OPPO from DVD players to the BBK empire.