At a time when the battle for market share in the global Android smartphone market has been deemed over, it is hard to imagine that a new entrant could pose a significant challenge to existing smartphone brands.
This is especially true when it takes hundreds of millions of dollars in research and development and marketing costs to gain market share in the highly competitive smartphone market.
However, in the past 2 years, a new smartphone brand has quietly crept into the market and is slowly gaining the Android market share.
Realme may not be a popular brand yet, but it shipped 10 million phones worldwide in the first 14 months of its inception, a tremendous feat for a young company.
During this period, Realme has launched 11 smartphones, including Realme 1, Realme 3 Pro, Realme U1, Realme C2 and Realme X.
Twitter photo credit: Mr Phone
Realme's rapid rise has led to comparisons with Xiaomi, one of the fastest growing budget smartphone brands a few years ago.
Who exactly is behind Realme and how did the global meteoric rise take place?
An offshoot of Oppo
The Chinese smartphone company was founded in May 2018 by Sky Li, the former vice president of Oppo.
Both Oppo and Realme are owned by the Chinese multinational conglomerate BBK Electronics, which also owns Vivo and OnePlus.
Although it was considered too late for a new phone brand to break into an already crowded market in 2018, Li believed that consumers between the ages of 18 and 25 were largely underserved – they needed something that was both affordable and cool .
Sky Li pictured at the Oppo F1 launch in 2016 / Photo credit: GSMArena.com
As the marketing officer for Oppo in India prior to founding Realme, Li saw the opportunity to serve that consumer group in the world's second largest smartphone market, despite being dominated by Xiaomi and Samsung.
In May 2018, Realme released its first phone in India, Realme 1, an affordable smartphone that is said to offer stunning design and slim performance.
They received great responses from Indian consumers. According to a published market report, Realme quickly stole market share from existing gamers and became India's third largest smartphone brand with a 9 percent share within just 6 months of its launch.
Realme was right behind Xiaomi and Samsung, which had market shares of 29 percent and 25 percent, respectively.
Image credit: Canalys
In 2019, Realme had the highest annual growth rate (268 percent) among the top 5 smartphone brands in India, selling over 4.7 million units in the fourth quarter of 2019.
How it sells 50M phones in 2 years
Building on its momentum in India, Realme launched in various countries such as China and Singapore in 2019.
By July 2019, Realme had successfully entered 20 markets including South Asia, Southeast Asia and Europe.
In India alone, Realme's sales increased by 473 percent in 2019, with 15.7 million units sold (compared to just 2.7 million in 2018), reaching first four place.
Image credit: Canalys
In the first quarter of 2020, Realme became the fastest growing smartphone brand in Southeast Asia, with year-over-year growth of 173 percent, despite the Covid-19 pandemic, according to Counterpoint Research.
As of the third quarter of 2020, Realme had cumulative sales of 50 million units, becoming the fastest smartphone brand in the world, making 50 million sales in just nine quarters.
According to a report by research company Canalys from the third quarter of 2020, it is now the seventh largest smartphone brand in the world and only follows the brands that have been around for much longer – Samsung, Huawei, Xiaomi, Apple, Oppo and Vivo.
Image credit: counterpoint
In Singapore, it is currently one of the top five smartphone brands with a year-over-year sales increase of 300 percent in 2020.
The brand was also among the top 5 in terms of sales at the Shopee 11/11 sales event last year.
The burning question is: what contributed to Realme's exponential growth?
First of all, the camera and picture quality are some of the main attractions of Realme phones. Realme knew that selfies were a major selling point for their potential audience – the younger crowd.
Campus concerts are a key strategy for Realme to attract young consumers in India / Image Credit: Realme
To appeal to the young audience, Realme relied on entertainment functions such as different sound modes for films, games and music, as well as a high-performance handset for gamers.
Second, Realme, OnePlus, Oppo and Vivo are all under the same roof as BKK Electronics, which started out as an electronic dictionary seller in southern China in 1998 and has since diversified its portfolio.
While working independently from the other smartphone brands, Realme leverages Oppo's supply chain, a model that allows them to have lower assets and therefore lower costs.
The light asset strategy (in other words, only online) also means that Realme can offer competitive products at relatively affordable prices.
In Singapore, the 8 GB RAM, 128 GB phone costs S $ 359 and the notch screen model costs S $ 369.
Realme C3 / Photo credit: MEnsXP.com
Third, the short distribution channels with fewer intermediaries delivering products to consumers further help optimize efficiency and reduce costs.
In a market that has traditionally relied on offline sales channels and distributors, Realme mainly used different online strategies aimed at specific user groups.
In addition, they avoid extravagant outdoor advertising in order to save costs. The company prefers more subtle word of mouth like working with influencers, hosting music festivals on campus, and promoting an online fan community.
A Realme event during Diwali / Image CRedit: Realme
To reach the tech savvy target users, Realme mainly relies on online marketing and sales channels, which has worked very well for its young consumers.
Additionally, the launch in India was a good decision as the Indian market is geared towards low to medium priced phones. This explains why Xiaomi is dominating the industry while the more expensive Apple is lagging behind budget Chinese phone makers.
Had they launched into China's highly competitive smartphone market, it may not have given them a positive head start in expanding into the rest of Asia.
Similarities and differences between Realme and Xiaomi
There is no doubt that the success of Realme will spark comparisons with Xiaomi.
Xiaomi was founded in Beijing in 2010 and launched in more than 80 markets. Xiaomi's success was based on its strategy of developing premium smartphones and selling them at extremely low prices.
Realme also adopts this similar winning strategy.
Xiaomi models / Photo credit: TechRadar
In terms of aesthetics, Realme and Xiaomi phones also look eerily similar, making it difficult for a beginner to distinguish from Chinese smartphones.
If you compare similar models from both brands, you will hardly find any differences because the functions are comparable.
In fact, both brands have consistently scored similar ratings for camera quality, performance, and display. Both brands are also in the S $ 300 price range.
While it looks like Realme is pulling a sheet out of Xiaomi's playbook, there are differences in their strategies.
Realme uses viral media and social marketing campaigns to target younger consumers such as college students. Realme seems to be aimed at the young crowd, focusing on colleges, events, cultural festivals, etc. – a group with higher disposable income.
Xiaomi, on the other hand, is aimed at a wider range of consumers between the ages of 18 and 65.
Xiaomi Redmi Note 9 Pro versus Realme 6 / Photo credit: Yugatech
Both Realme and Xiaomi primarily use an online strategy for specific user groups as well as an asset-light model. However, it should be noted that both brands are also doubling their offline strategies and increasing the number of stores.
The main difference, however, is that Realme has access to Oppo, the third largest smartphone maker in SEA.
Realme is able to leverage Oppo's manufacturing facilities for manufacturing, suppliers, distributors and business development partners.
In comparison, companies like Xiaomi and Huawei hire contractors to get the job done. As a result, this eats up their margins and lowers their profits.
A strong contender next to Xiaomi
Realme competes against the budget brands Redmi and Poco from Xiaomi and competes in the same price range.
For example, Realme C2, Realme 5 and Realme 5 Pro compete directly with Redmi A, Redmi and Redmi Note Pro.
Realme 5 Pro and Xiaomi Redmi Note 7 Pro / Photo credit: Times of India
Even their prices and characteristics are similar. For example, Realme 5 Pro and Xiaomi Redmi Note 7 Pro are both 48-megapixel camera phones. Both share the same sleek design and were launched around the same time.
The former comes with a Qualcomm Snapdragon 712 octa-core processor, while the Redmi Note 7 Pro comes with a Qualcomm Snapdragon 675 octa-core processor.
| Specifications | Realme 5 Pro | Xiaomi Redmi Note 7 Pro |
| display | 6.3-inch FHD + display with a resolution of 2340 × 1080 pixels | 6.53-inch full HD + dot notch display with a resolution of 2340 × 1080 pixels |
| processor | Qualcomm Snapdragon 712 octa-core processor | Qualcomm Snapdragon 675 octa-core processor |
| R.A.M. | 4 GB, 6 GB, 8 GB | 4 GB, 6 GB |
| warehouse | 64 GB, 128 GB | 64 GB, 128 GB |
| backup camera | 48MP + 8MP + 2MP + 2MP | 48MP + 5MP |
| Front camera | 16MP | 13MP |
| battery | 4035mAh | 4000mAh |
Table from the times of India
Both offer the same RAM and storage options and are in the same S $ 300 price range.
While Xiaomi has expanded from selling phones to selling devices like fitness bands, laptops, headphones, televisions, etc., Realme is also introducing a range of IoT devices like smart TVs, smartwatches, and headphones.
In fact, the smartphone-plus-IoT strategy is certainly not unique as Chinese smartphone brands seem to share the same vision: smartphones and smart devices from the same brand form a well-connected ecosystem that drives sales and data collection for each other.
Realme's IOT Strategy / Image Credit: XDA Developer
As a newcomer to the game, it is therefore an opportunity for Realme to study what worked and what didn't for Xiaomi.
That way, they can effectively apply these insights to their strategies or even make them better.
While there hasn't been much talked about Realme in Singapore, last year the brand marked its entry into local telecommunications companies Singtel, Starhub and M1.
With the Realme XT model, which can compete with the Redmi Note 8 Pro, it entered the Singapore market at the end of 2019.
Singaporean consumers can look forward to a Realme concept store in 2021. Realme will also see a local customer service center open in Singapore, announced its sales manager Gavin Huang.
With the upcoming 5G era, Realme is also jumping onto the 5G ecosystem and forging closer collaboration with operators, internet service providers and e-commerce platforms.
This is to ensure that young people have access to pioneering 5G smartphones with advanced technology and design at competitive prices and not have to incur costs to replace their smartphones when 5G is ready.
We will do our part to drive Singapore's nationwide efforts to widespread 5G adoption through the rapid application of 5G technology to our product portfolio. Our sales target for 5G smartphones in 2021 is 25 million units.
– Gavin Huang, Realme Sales Director
Realme's rapid rise shows that intelligent marketing and product positioning can challenge the existing market share of the global smartphone market.
It also shows that it's never too late to enter a competitive market and challenge all of the Goliaths.
Selected image source: Reuters / The Statesman
