Realme, a low-cost newcomer Chinese smartphone maker, has carved out a leading position in Asia’s emerging markets, as the pandemic intensifies competition to secure market share in the strategically important region.
In the first half of 2020, Realme’s sales grew 157 per cent year on year, making it one of only two brands to register positive growth globally during the period, according to tech research firm Counterpoint.
The two-year-old brand cracked the world’s top 10 handsets last year, based almost entirely on its ability to sell cheap and relatively high-spec smartphones in south and south-east Asia.
In an interview with the Financial Times, founder and chief executive Sky Li described competition in the region as “white hot”. He attributed Realme’s sales growth to the brand’s precision targeting of young buyers interested in tech fads but unable to pay too much for them.
The company’s pandemic-beating performance comes as Samsung is accelerating efforts to claw back market share from Chinese manufacturers in India, where Realme is closing in on Samsung’s current third-place ranking.
As of July, the company was the seventh most popular brand globally and ranked fourth in Thailand, India, Cambodia and Egypt.
In recent months, major international brands have also moved to strengthen their position in India, as the rise of anti-China sentiment after a deadly border clash in June created a potential opening for challengers.
Mr Li, who was previously head of India operations at Oppo, China’s third-largest smartphone brand, said he saw an opportunity to sell flashy and sleek but cheap smartphones in emerging markets.
“We weren’t content with being a small-is-beautiful brand. We wanted to become a main player in the industry,” he said of the decision to set up Realme as an independent brand.
US players have also shown increased interest in the market. Google last month announced that it would invest $4.5bn in Reliance Industries’ Jio Platforms and would partner with the Indian technology group to build an Android-based operating system for its smartphones.
Realme’s rise has come in large part from riding on the success of Oppo, which has provided the company with manufacturing and space in its sales stores across India, said Nicole Peng, a Hong Kong-based analyst at Canalys.
Both companies are part of a network of models backed by Shenzhen-based conglomerate BBK Electronics, which is also an investor in brands Vivo and OnePlus. “There aren’t really any issues [for Realme] to ramp up scale or cut costs to make cheaper devices,” she said.
The next stage for Realme to solidify its lead will be to expand its presence in China, where it officially launched its first model in May last year.
CK Lu, a Taipei-based analyst at Gartner, said Realme was well placed to succeed in its home market because there was a big demand for cheaper models and their main rival Xiaomi has been inconsistent in launching well-priced phones with new features.
“In China, there was always demand in the lower-tier city market, especially after Covid made many brands look too expensive,” Mr Lu said.