Company, one of the largest manufacturers in the world, will launch three other models by the end of the year

09/20/2022

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Jim Zhang — Foto: Silvia Zamboni/Valor

The Chinese cell phone maker Oppo, one of the largest in the world, is coming to Brazil with a model that will cost R$2,999 ($580). The original price of the Reno 7 model – the device chosen for the debut – was R$3,799, but the company decided to review the strategy and reduce the value to draw more consumers. The company will launch three other models by the end of the year, of the A series, which are cheaper than Reno, said Jim Zhang, CEO of Oppo in Brazil.

Sales are scheduled to start next week. Oppo’s devices will be sold online by Amazon and Telefônica’s Vivo in brick-and-mortar stores. At first, the products will be available in 10 Vivo stores in São Paulo.

Oppo’s arrival will be followed by several sales campaigns to arouse the public’s interest. A temporary store will be opened on Paulista Avenue, in São Paulo, so that the consumer can get to know the brand’s design and handle the device. The first buyers will be entitled to a five-year warranty period, free of charge.

Investing in Brazil is a natural step in Oppo’s globalization strategy, said Mr. Zhang. He was tasked with the mission in late 2020. “We have businesses on five continents, and Latin America was the last region we entered.” The effort began in Mexico in 2019. Since then, the company has moved into Colombia, Chile, Peru, and Guatemala. Brazil – the fifth-largest cell phone market in the world and the largest in Latin America – was an inevitable destination, the executive said. The company declined to reveal how much it invested to launch the Brazilian operation.

Oppo realized that the brand had been arousing the curiosity of Brazilians, who bought their handsets on transnational e-commerce websites, mainly Chinese. The number of sales in these stores reached 10,000 units annually, said Mr. Zhang, which provided the company with another reason to invest in the country: an advantageous initial user base.

Oppo is the fourth-largest cell phone maker in the world, according to several international rankings. The company accounted for 10% of global shipments in the second quarter, behind Samsung (21%), Apple (17%), and Xiaomi (14%), consultancy Canalys says. In China, the position is even more relevant. According to Counterpoint, Oppo held an 18% share of the Chinese market in the second quarter, behind Honor (once owned by Huawei) and Vivo (which is not related to the Brazilian phone carrier), and ahead of Xiaomi and Apple.

In Brazil, Oppo’s arrival takes place as the market shrinks. Sales in the country are expected to fall below 40 million units this year, down 12.7% from last year’s total of 45.8 million phones, according to consulting firm IDC. In 2021, sales had already been 6.1% lower in volume, although they have grown 9.5% in revenue – an indicator of increased sales of more expensive handsets.

Photography features are among the main attractions of Reno 7, Mr. Zhang said. The line was launched in 2019 and has sold more than 60 million units worldwide. The model arriving in Brazil has a 32MP front camera and 64MP rear camera. The screen is 6.43 inches and the RAM memory (used to store quick access files and run applications in the background) has 6 gigabytes. The device is compatible with 3G and 4G networks only, although the company already sells 5G phones in the same line abroad.

At first, all Oppo devices available in Brazil will be imported from China. The company has nine factories abroad, including countries like India, Indonesia, Turkey, and Pakistan. “Having local production in Brazil is our dream. We have thought about it since the day we decided to start an operation. But we need to better understand the rules of the game. The country has its own complexity, and we are still doing studies,” Mr. Zhang said. “It is a long-term goal.”

Import tariffs for cell phones, among other products such as notebooks, used to range from zero to 16% in Brazil but were reduced by the federal government this year to up to 14.4%. By reducing the tax burden, local production could reduce costs by up to 25%, Mr. Zhang said. The problem is the supply chain. The so-called Basic Productive Process (PPB) defines that companies must buy specific shares of components from local suppliers to ensure tax exemption, and many Oppo suppliers do not have local production, the CEO said.

Oppo was founded in Dongguan, China, in 2001, to produce Blu-ray players, amplifiers, and headsets. The brand’s first cell phone was launched in 2008. The company is part of BBK Electronics, a group founded by businessman Duan Yongping. In addition to Oppo, BBK controls other brands such as OnePlus, Realme, IQOO, and Vivo.

Despite being Oppo’s leader in Brazil, Jim Zhang is getting used to the country, where he will spend most of his time. “I like the general environment and the people. Brazilians are tolerant, cheerful, and kind,” he said. “In China, the concept of happiness is very complex. Here it is simpler. Brazilians feel happy for no specific reason.”

*By João Luiz Rosa — São Paulo

Source: Valor International

https://valorinternational.globo.com/