Smart phone street fighting: cost-effective or customer experience?

In the past three quarters, the domestic mobile phone market prices soared by 15%, far more than the average price of 7% of the global mobile phone year on year growth. After entering the incremental market, the domestic mobile phone manufacturers already completed transformation from the sales-oriented to profit-oriented. However, the performance of different mobile phone manufacturers can be described as mixed. Huawei reinforce the positioning of the high-end market, OPPO, vivo has long been self-contained, but rather Xiaomi, Meizu and other flagship brands mainly on cost-effective began to setbacks.

Mobile phone market competition is like a street fighting, there is no shortage of close combat, nor the lack of dog staggered melee. In all the prevailing market strategy, "Cost-effective” is probably the most worthy of being debated about. Once the place where the vegetation is not born "weapons of destruction", and now it is less than, and even become the fuse that caused some of the brand in the profit-oriented gradually fall behind.

Will be cost-effective label?

Cost-effective rate is a combination of performance and value from the concept, and then straightforward point is a symbol of "cheap". From the brand operation of the logic point of view, can be occupied by all the symbols is not suitable as a brand value, until there is a mobile phone brand to break this precedent, that is Xiaomi.

Xiaomi created a mobile phone brand rapid growth of the myth, not only in the country, the world is unique. Xiaomi's success, the most central point is that the "cost-effective" strategy to play consummate, which achieved the Xiaomi brand, channels and products.

In the era of smart phones just beginning to popular, no one will refuse the temptation of low price, the importance of price even once beyond the brand, service and product itself. Identify this is not only Xiaomi, as well as Meizu and hammer, although they are all the price imitation of the strategy of Xiaomi, also have created a sales climax.

Who really obsessed with this may be Xiaomi. At the end of 2015, Lei Jun made 100 million units of sales targets and in the price to try to break the 1999 Yuan ceiling. But defeated, Xiaomi suffered the bottleneck brought about by high-speed expansion. In the second quarter of this year, Xiaomi sales once again become the focus of the view of its recovery after another. In fact, Xiaomi "turn the corner" is still dependent on the cost-effective strategy, and with this to make large-scale development of India, Southeast Asia, Russia and other emerging markets. Lei Jun did not expect cost-effective will one day become the incentive price by which Xiaomi is bound.

The truth behind cost-effective

Mobile phone industry cannot be forever "Blue Ocean". When there are more and more competitors, the market is more and more saturated, so that the market strategy must also change due to time, once the glory may also become a future burden.

So, the era of cost-effective is end? From the big market environment, the price of mobile phones cannot be separated from the wave of components manufacturers fueled. Especially in 2017 staged a full screen boom, the screen panel prices steeply directly related to the mobile phone manufacturers pricing strategy. In addition, an industry tends to mature at the same time, also means that the disappearance of various dividends, online traffic costs are getting higher and higher, rising marketing costs, competition for offline channels to increase the cost of mobile phone manufacturers.

LePhone to survive nothing more than two points, one is lower than the BOM cost pricing strategy to completely break the consumer price line of defense; the other is to invent the concept of ecological subsidies, compared to Xiaomi cost can be described as out of blue. Today's LeEco has become a commercial failure of the specimen, the lack of blood transfusion LePhone also gradually disappeared. In fact, Xiaomi's persistence in cost-effective strategies began to become less relaxed.

In order to get traffic, Xiaomi began to spend money to support online variety show. At the same time, Xiaomi also opened the star group endorsement mode, signed Wu Xiubo, Liu Shi poems, Liu Hao Ran, Wu Yifan, covering the three generations of national idols and traffic of fresh meat. In order to extend the channel advantage, on the line of light Xiaomi battlefield will continue to the line, Lei Jun in three years to open thousands of Xiaomi home. We seem to have no reason to deny Xiaomi's speed, the current number of Xiaomi home has more than 160.

Compared to five years ago, Xiaomi paid the cost is quite different, that time the price or weapons of destruction, and now more like rhetoric. Empty call "cost-effective" has not call back sales and profits, and even may become constraint to Xiaomi future development.

Where is the way out?

In the third quarter of this year, Huawei's share in the mobile phone market for the first time beyond Apple, ranking second in the world. It should be said that this is another turning point of domestic mobile phone manufacturers: domestic manufacturers are no longer followers of foreign brands, must participate in the globalization of competition. Especially for Xiaomi, Meizu and other brands will once again face to the new choice whether continue to adhere to the so-called cost-effective strategy or to seek a breakthrough.

In a very long period of time, Xiaomi actually is keeping on strengthen the so-called cost-effective recognition on the audience, which is essentially a public relations, the use of people in the community to find the habit of group habit. The consumer market was still in the education period when Xiaomi was founded, but now the consumer upgrade has become a trend. Xiaomi want to "Evergreen" is bound to need to build on the needs of users, adjust their own brand concept, at least Xiaomi need to make a new interpretation on "cost-effective".

Business development will have a lot of fork, so the crash of cost-effective route once again confirmed the unlocked Samsung Note 5 32GB market benchmark changes. An established fact is: whether it is the growth of mobile BOM costs, or changes in consumption habits, rough cost-effective model has been outdated.