Li Tao
https://www.scmp.com/tech/big-tech/article/2184877/meet-godfather-chinas-smartphone-industry
Published: 6:02am, 4 Feb, 2019
Duan Yongping, the founder and chairman of
BBK Electronics Corp. Based in the southern coastal city of Dongguan, BBK is
the company behind Chinese smartphone brands Oppo, Vivo, OnePlus and Realme.
Duan Yongping, the founder and chairman of
BBK Electronics Corp.
Based in the southern coastal city of
Dongguan, BBK is the company behind Chinese smartphone brands Oppo, Vivo,
OnePlus and Realme.
Over a span of about 10 years, Chinese
smartphone brands have not only topped sales in their home market, but also
outshone major foreign rivals in many emerging and developed economies.
The success of four of those brands – Oppo
and Vivo as well as recently established OnePlus and Realme – can be directly
attributed to the guiding hand and investment savvy of reclusive Chinese
billionaire entrepreneur, investor and philanthropist Duan Yongping.
He is the founder and chairman of privately
held BBK Electronics Corp, a 24-year-old company based in the southern coastal
city of Dongguan that now runs one of the world’s largest and most
sophisticated electronics supply chains behind the production of a range of
smartphones for the global market.
Duan, who will turn 58 years old next
month, is widely regarded as the “godfather” of the Chinese smartphone industry
for developing two brands, Oppo and Vivo, as large global players competing
against the likes of Samsung Electronics, Apple, LG Electronics and mainland
rival Huawei Technologies. OnePlus and Realme, which are backed by BBK and
other investors, look to be the next big Chinese brands to conquer
international markets.
Attempts to reach Duan and BBK were
unsuccessful. The Chinese billionaire, who was interviewed by Bloomberg in
2017, was identified last year as an early investor in Pinduoduo, China’s third
largest e-commerce company, which was founded by his friend and protégé Colin
Huang Zheng. Duan’s net worth was estimated at 10 billion yuan (US$1.5
billion), according to the 2018 Hurun China Rich List.
In September last year, Duan also had a
well-publicised conversation with Chinese students at Stanford University in
Palo Alto, California, where his family lives. Duan and wife Liu Xin, a former
journalist, had set up their family’s Enlight Foundation to provide Chinese
students undergraduate scholarships and graduate fellowships at the
university’s School of Engineering.
Duan first made international headlines
near the end of June 2006, when he agreed to pay a then-record amount of
US$620,100 in a bidding on eBay to have a power lunch at a New York steakhouse
with renowned billionaire investment guru Warren Buffett, the chairman and
chief executive of Berkshire Hathaway.
Behind the rise of China’s smartphone
brands lies growing unease over country’s tech gains
30 Jan 2019
“I’ve learned so much from Warren Buffett
and his investment philosophy. I want a chance to say thank you,” Duan said in
a South China Morning Post report in July of that year. Apart from his wife,
Duan brought six friends to that lunch, including Huang.
Who are China's tech billionaires?
Get the full picture
Born in March 1961 into a modest family in
Nanchang, capital of Jiangxi province in southeast China, Duan in 1978 entered
Zhejiang University in the eastern city of Hangzhou, where he majored in
wireless electronics engineering.
After a short stint as a teacher at the
adult education centre of the Beijing Radio Tube Factory, Duan pursued further
studies at Beijing’s elite Renmin University of China, formerly known as
People’s University, where he earned a master’s degree in economics in 1989.
Oppo was the world’s fifth largest
smartphone supplier in 2018, according to data from Counterpoint Research.
That same year, he joined Zhong shan Yihua
Group, located in the southern coastal province of Guangdong, to manage an
ailing factory and turned it into a profitable business. He set up a unit that
made cheap video game consoles, Subor Electronics Industry Corp, where he
served as its chief executive.
Subor had much success in making education
consoles, or learning machines, which were cheap copycats of Nintendo’s Famicom
computers. That popular device, which was known as “Little Tyrant” in China and
endorsed by Hong Kong martial arts superstar Jackie Chan at the time, helped Yihua
achieve an annual profit of about 1 billion yuan (US$148 million) in 1995,
compared with a loss of 2 million yuan when Duan joined the firm in 1989,
according to a report by Week in China last year.
Despite that success, Duan had a public
falling out with Yihua after his plan to spin off Subor and get a stake in the
new company was rejected, the report said. He left Yihua in August 1995 and
later that year, established electronics firm BBK, in which he had a
controlling 70 per cent stake.
Vivo was the third biggest smartphone brand
in China last year, according to research firm Canalys. Photo: Handout
Duan divided BBK’s business into three segments:
education electronics, led by Huang Yihe; audiovisual, which made VCD and DVD
players, under Chen Mingyong; and communications, which made mobile phones and
cordless telephones, under Shen Wei. BBK had early success with its VCD and DVD
players, becoming the leading vendor of those devices in China.
In 1999, Duan introduced a partnership
programme that eventually led to the creation of independent business entities
and reduction of his BBK stake to about 17 per cent. That led to Oppo
Electronics Corp being founded in 2004 by Chen, while Vivo Communication
Technology was formed by Shen in 2009. Pete Lau, the founder and chief
executive of OnePlus, and Sky Li Bingzhong, founder of Realme, previously
worked as vice-presidents at Oppo.
In his interview with Bloomberg, Duan said
making mobile phones was not exactly his expertise, but reckoned his company
could do well in the industry. That decision proved prescient, as sales of
Chinese-brand Android smartphones took off when 3G and later 4G mobile networks
were rolled out across the country.
Chinese smartphone brand Oppo doubles
R&D investment to keep up with rivals ahead of 5G deployment
27 Dec 2018
Demand for Chinese-brand mobile phones
doubled each year between 2010 and 2012 during the period when 3G mobile
services were being rolled out across the country, but gradually slowed down
from 2013 ahead of the deployment of faster 4G services by the mainland’s three
mobile network operators.
With the world’s biggest internet
population and smartphone market, China had as many as 300 domestic mobile
phone companies about three years ago. Cutthroat competition reduced that
number to about 200 last year, as Chinese consumers bought fewer smartphones
and the economy grew at a slower pace.
Only bet on the things you understand Duan
Yongping, chairman of BBK Electronics Corp
The larger, deep-pocketed Chinese
smartphone suppliers have won a big chunk of the domestic market through
aggressive promotions, advanced designs and features, and offering a wide array
of models in a range of prices to entice both younger and affluent buyers.
Oppo and Vivo, respectively, were China’s
second and third biggest smartphone suppliers in 2018, with a combined 40 per
cent market share, according to estimates by research firm Canalys. They were
behind market leader Huawei, but ahead of Xiaomi and Apple in a year when
domestic smartphone shipments fell to 396 million units, compared with 459
million in 2017.
An employee tests the cameras of OnePlus smartphones
at the company’s manufacturing facility in the southern coastal city of
Dongguan, in Guangdong province. Photo: Bloomberg
In the global smartphone market last year,
Oppo and Vivo took the fifth and six spots, respectively, with a combined 15
per cent share, according to data from Counterpoint Research. It said the top
four-ranked vendors last year were Samsung, Apple, Huawei and Xiaomi.
Duan described the success of BBK along
with sister brands Oppo and Vivo as no accident even if they were latecomers to
the smartphone industry, according to a transcript of his talk with Stanford
students last year. He attributed this to a focus on closely screening partners
and suppliers, building “a great reputation”, making changes when something
goes wrong and benfen, which loosely translates to integrity or honesty.
Vivo aims for high-end segment with
premium, hi-tech handset sporting large dual displays
12 Dec 2018
“In our early years, we often said our
products provide good value at a cheap price,” Duan said. “But over the years,
I’ve learned that we were just making excuses for inferior products.”
More than marketing and promotions, Duan
said the goal was to focus on making a good products that meets users’
requirements, whether in the low-end or high-end segment of the smartphone
market.
China’s OnePlus to launch first 5G
smartphone in Europe with British carrier EE in 2019
6 Dec 2018
Lau referred to benfen numerous times in an
interview with the Post last year as the moral code that guides OnePlus, which
he said helped the company gain the trust of consumers in the US and other
overseas markets.
Duan, who immigrated to the US in 2002 to
join his family, said he frowns on making speculative investments. “Only bet on
the things you understand,” he said. “Focus on understanding the business model
and how the business makes money. Ninety-five percent of investors focus on
what the market will do. That’s wrong.”
No comments:
Post a Comment