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How China’s BBK-Owned Vivo, Oppo Are Facing Scrutiny, And Yet Dominating In India

Outlook Business

How China’s BBK-Owned Vivo, Oppo Are Facing Scrutiny, And Yet Dominating In India

Recently, two of China’s BBK group-owned brands – Oppo and Vivo – have come under the scrutiny of tax authorities in India

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Oppo mobiles

What’s common between Oppo, Vivo, iQOO, OnePlus, and Realme besides the fact that they are all among the leading smartphone brands in India? They are all owned by China's multinational BBK Electronics.

Not many people in the country may have heard of BBK Electronics – the company that has been instrumental in the rise of five globally best-selling smartphone brands—Oppo, Vivo, Realme, OnePlus, and iQOO.

The Chinese company, founded by Duan Yongping, also known as “China’s Warren Buffett”, has rivals such as Samsung, Huawei, and Xiaomi in India and globally.

Recently, two of its brands – Oppo and Vivo – have come under the scrutiny of tax authorities in India.

Last week, the Enforcement Directorate (ED) said the Indian arm of Vivo had sent Rs 62,476 crore "illegally" to China in order to avoid payment of taxes in India. This, according to the ED is almost half of Vivo's turnover of Rs 1,25,185 crore.

Just a few days later, The Directorate of Revenue Intelligence (DRI) detected customs duty evasion of around Rs 4,389 crore by Oppo Mobiles India Private Limited.

Investigations also revealed that Oppo India remitted through payments of royalty and license fees to various multinational companies, including those based in China, in lieu of the use of proprietary technology, brand, and intellectual property rights (IPR) licenses.

A number of Chinese companies have been under the scanner of India’s authorities in the past two years after a standoff between the troops from the two countries in eastern Ladakh.

Lately, scrutiny has tightened on Oppo and Vivo, both owned by the BBK group.

However, the presence of brands owned by BBK in the Indian smartphone space has been increasing at a steady pace in the past few years.

BBK Group’s Dominance In India

BBK Group’s dominance grew in the country despite geopolitical tension between India and China. This is mainly due to the variety of smartphones it offers through the brands owned by the group.

BBK was the world’s largest smartphone maker, with a 19% market share in 2020, as per data by Counterpoint Research. Oppo, Vivo, and Realme sold 262.7 million units in 2020, outperforming Samsung and Huawei.

As per the Counterpoint report, Chinese brands together controlled 75% of the Indian market in 2020, up from 72% a year ago. Xiaomi was the largest by shipment volume, with a 26% share, followed by Samsung (21%), Vivo (16%), Realme (13%), and Oppo (10%).

BBK Group overtook South Korean rival Samsung Electronics to emerge as the largest mobile phone maker in the Indian market by consolidated sales in 2019-20. For the calendar year 2019, the BBK Group dominated the Indian smartphone space with 37 per cent share, compared to 28 per cent of Xiaomi, according to Counterpoint data.

In 2020, amid the supply disruptions due to Covid-19 lockdowns, these brands brought 5G-enabled and foldable devices to give stiff competition to other smartphone players.

In second quarter of 2020, Vivo had 17 per cent market share in India, Oppo 9 per cent and Realme 11 per cent. Vivo was also the title sponsor of the Indian Premier League (IPL) from 2016 to 2019 and in 2021.

Vivo, which entered India in 2014, had a 15 per cent market share in the Indian smartphone segment in the first quarter of 2022 with the shipment of 5.5 million devices, according to IDC.

Meanwhile, OnePlus started eating the market share in the premium smartphone space, and Oppo and Vivo took lead in the mid-range segment. Besides, iQOO and Realme also flourished around this time and the Indian smartphone users were spoilt for choices.

The Indian smartphone market grew by just 2 per cent year-on-year in first quarter of current fiscal as vendors shipped 38 million smartphones in the country. During the quarter, Xiaomi remained the top brand in India, shipping 8 million units, followed by Samsung which shipped 6.9 million units during the same time.

Realme registered a 40 per cent growth in shipments as the company shipped 6 million units during the first quarter. Realme took a 16 percent market share and was only third in terms of shipments behind Xiaomi and Samsung. Vivo (5.7 million units) and Oppo (4.6 million) were fourth and fifth with 15 per cent market share, 12 per cent market share, according to the Canalys report.

 The Rise Of BBK

In 1995, Duan Yongping founded BBK Electronics in Dongguan to make VCD players, MP3 players, among other products.

The group later forayed into mobile phones with the creation of OPPO in 2004 and Vivo in 2009. BBK diversified its portfolio, introducing new companies like OnePlus, Realme, and, more recently, iQOO.

BBK now has five smartphone brands and with the likes of OPPO and Vivo setting their sights on the UK and other Western markets. While each brand works in a silo, they share hardware resources, giving them a huge advantage over smaller brands.

BBK is collectively the world's third largest manufacturer, even bigger than Huawei in terms of volume.

According to data from research firm Canalys from April, BBK group is close to becoming the world’s largest smartphone maker, with Oppo and Vivo commanding a global market share of 10% and 8%, respectively. This puts BBK on par with Apple (18%) and ahead of Xiaomi at 13%.

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