From Dongguan To Shenzhen: A New Century For The Rise Of Domestic Mobile Phone Oppo Industry Chain

More than half of the world's top mobile phone manufacturers are headquartered in Shenzhen. As for the mobile phone industry, Shenzhen is also one of the landmarks.

"There is no consumer electronics that Shenzhen can't make." Liu Bo, vice president of oppo and President of China, lamented in recent interviews with reporters such as the 21st century economic report.

From the establishment of a group of communication equipment manufacturers in Shenzhen in the 1980s, to the beginning of the 21st century, Chinese brands began to enter the mobile phone terminal market one after another, and then to today's "crossing" four communication times to gain a firm foothold in the world. In the past 40 years, it has been in the same frequency with the construction of Shenzhen Special Economic Zone.

Today, Shenzhen and Dongguan have established a complete mobile phone industry chain covering production, design, R & D, manufacturing, Internet service and sales. With the wave of 5g bringing all things into harmony, richer industrial ecology and industrial roles are still accelerating to integrate here.

In 2010, in order to better embrace the era of smart phones, oppo company, which has been established for six years, went out of Dongguan and came to Shenzhen, which also witnessed the gradual rise of mobile phone ecological chain from scratch and the gradual rise of domestic industrial chain. It is also a microcosm of domestic innovative ecology rooting and sprouting in Shenzhen.

The origin of Shenzhen

The development of domestic mobile phone brands began at the end of the 20th century. The relevant departments of the state have attracted many manufacturers to enter the mobile terminal market by issuing mobile phone licenses.

In the past decade, the mature domestic brands began to compete with overseas brands in the domestic market. With the cancellation of the "mobile phone production approval system" by the State Council in 2007, in the face of this more market-oriented environment, five joint ventures of overseas brands Nokia, Motorola, Samsung, Sony Ericsson and LG began to occupy the market crazily.

The turn of events always seems to begin with "dissatisfaction.".

After stepping out of oppo brand step by step, Chen Mingyong began to look for the next direction besides audio-visual business. In 2006, he was in Huaqiangbei's dazzling counter for a circle, but did not find a satisfactory mobile phone product, so the new goal was born.

At that time, oppo's headquarters was also set up in Dongguan, and the main products on sale were Blu ray DVD players. The company spent two years doing various pre research and repeatedly designing, producing and testing processes. Finally, in 2008, it produced a functional mobile phone belonging to the oppo brand.

According to Zhu Gaoling, vice president of oppo, "the market response was particularly good. The sales volume in the first year exceeded the expectation, and the sales volume increased rapidly every year until 2011, when it came to a turning point."

When the domestic brands began to produce a large number of functional machines, the threat actually came quietly around. In 2010, apple founder Steve Jobs taught the world what a real smart phone is with an iPhone 4. At that time, the era of intelligent machine has gradually opened overseas.

This has also become an important starting point for oppo to go out of Dongguan and Shenzhen.

"We see a huge industry space for the development of smart phones in the future, which will bring huge mobile Internet services." Liu Bo pointed out that the software industry will be closer to the market in 2010, because Liu Bo will be closer to the software market. At the same time, the company puts forward the development strategy in the next five years, to shift from manufacturing enterprises to R & D technology-oriented enterprises, and Shenzhen will promote the implementation of this decision-making more quickly.

From the establishment of its office to the establishment of its headquarters, oppo has established its foothold in Shenzhen in the next decade.

"Smart phones require more and more talents. We should start to lay out and develop rapidly here by virtue of the talent advantage of Shenzhen's" city of innovation. " According to Zhu Gaoling, in 2011, oppo Shenzhen company started a cycle of rapid growth in terms of scale and R & D personnel. So far, there are about 12000 oppo employees in Shenzhen, concentrated in Houhai area. It is defined as the "Leadership Center", which is the area where oppo has the largest number of R & D personnel in the global comprehensive departments (including product planning, ID design, marketing, brand, etc.) and R & D personnel.

"Shenzhen has its own flow, where we can find the talents we need. In addition, the Shenzhen municipal government has great advantages in introducing talents, especially in terms of subsidy policy. I think these are very important." Zhu added.

Construction of industrial ecology

As the eve of the transformation to smart phones, 2011 is a profound test for all mobile phone brands.

In that year, Nokia and Motorola, the former mobile phone giants, successively sold themselves, and HTC brand rose. Domestic manufacturers should think about how to quickly complete the adjustment to the full intelligent machine business in the face of the huge functional machine inventory accumulated before.

This is not only a problem faced by the whole machine manufacturers, but also related to the long-term survival of the entire mobile phone industry chain.

"At that time, oppo developed very well in the function machine market, had a lot of inventory, and had already placed a lot of orders with suppliers. At this time, oppo was faced with the choice of whether to find a way to sell the function phone and how to turn to the smart phone line." Zhu Gaoling analyzed that at that time, the management agreed that there might be no future if the conversion was not completed quickly, so they made a decision and immediately cut off all the functional machine business.

What about orders that are still on the production line? All are subsidized by oppo. "We took more than a billion yuan to supplement the supply chain, requiring all suppliers to stop the production line of functional machines and start making smart phones." He added that after 2011, oppo has maintained an annual growth rate of 60% - 80%, especially from 2015 to 2016, the growth doubled, and the sales volume directly increased from 50 million to 100 million mobile phones.

It seems simple for the whole machine manufacturer to double the business, but it is not so easy for the supply chain enterprises.

However, it seems that there are only a few years' change in the global supply chain when we are faced with great changes in the global production chain. For the industrial chain, it may mean that all the previous years of accumulation have to be invested all at once. Some manufacturers have to build or rent factories, purchase new equipment and manufacture new production lines. This requires the development of production speed, but also the supply chain's trust in us. "

At this time, if we choose not to expand the new production line, we may be faced with elimination in the future, but we have to take a huge risk when we choose to expand.

Fortunately, after years of cooperation and accumulation, most of the supply chain partners choose to believe that the whole industry will jointly double the investment to promote the prosperity of today's hardware ecology.

In this process, of course, some manufacturers are not willing to believe that, which led to the Matthew effect many years later, those suppliers who did not participate in the development of that year left the core market, and more domestic supply chain manufacturers grew up rapidly under the common development.

From the macro level, the construction of hardware ecological chain in Shenzhen market is adsorptive. Not only the improvement of the domestic industrial chain, but also overseas manufacturers come to live.

Liu Bo pointed out that throughout the development of these years, semiconductor manufacturers Samsung, Hynix and Qualcomm have successively come to Shenzhen to set up companies. In the early years, Samsung and Nokia also chose to build their own factories in Dawan district. This means that the hardware industry has accumulated here from a long time ago, and in recent years, it has gradually shifted from overseas brands to more domestic brands Shenzhen is booming.

"I think the city card effect is very important. Shenzhen's open and pragmatic style has attracted more people to do business here with a sense of trust. This has created a very healthy supply chain and ecology in Shenzhen, while the gradual growth of brands in and around Shenzhen has driven the development of the whole industry. " Liu Bo concluded.

Deeply cultivate domestic innovation market

Not only is localization of the supply chain gathering to accelerate, but innovation is also taking root here.

In 2018, oppo became the second domestic brand in the industry to launch a 3D structured light front camera after the iPhone in the world, leading the market into the face ID era. It is inseparable from the joint research and development with local suppliers.

In fact, in today's Shenzhen, it may no longer be a very difficult problem to carry out innovative research and development according to the demand and land it on the products.

In Zhu Gaoling's words, "now if you have a better or more advanced idea about a certain product, it can be easily realized in Shenzhen. You can find people to design, make molds, produce, and even do not need to recruit employees. An idea can realize a product. "

To this end, the R & D industry is quietly accelerating the work chain.

According to Liu Bo, oppo is currently working with many enterprises to carry out a lot of pre research work for the future technology direction. "This involves a lot of capital and R & D resources, and I think the cooperation with the supply chain is the most important."

This is because the era of 5g oriented integration of all things will open up a huge new industrial ecology, and the more in-depth and mature the pre research on the future demand direction will be able to continue to stand firm in the future.

Liu Bo pointed out that based on the research and judgment of trends, oppo deployed tracks in 5g, big data, AI, cloud computing and other fields, and cooperated with the supply chain team to accelerate the application and landing exploration of new technologies.

Just like 3D structured light technology at that time amazing generation, is an obvious example. Of course, there was no room for further development. Liu Bo told the 21st century economic reporter, "at that time, we thought 3D structured light technology was the most accurate and advanced technology to achieve the ability. Other (front-end scheme) technologies were not able to achieve this level and had a high rate of misjudgment. Oppo hopes to achieve a more accurate and eye-catching effect It is considered that the choice of technical route is right. But the follow-up ecology did not open up, and the technology was ahead of the market demand. "

He said that in the process of product landing, oppo will consider the future application direction of the industry and when to complete the further landing, "but the purpose is that when we see that a technology is valuable for the future of users, we will do it.".

As many people may not know, in July this year, the intellectual property data released by the State Intellectual Property Office showed that in the first half of 2020, the top three domestic (excluding Hong Kong, Macao and Taiwan) invention patents were Huawei Technology Co., Ltd. (2772), oppo Guangdong Mobile Communication Co., Ltd. (1925), and BOE Technology Group Co., Ltd. (1432).

"Oppo actually invests a lot in R & D. in this process, oppo and the supply chain actually drive each other. After the core supply chain ecology is built, the complete industrial system behind can be easily driven." Liu Bo concluded.