OPPO IN PAKISTAN: Challenges to enter in the Market

Company background

Founded in 2004 and based in Guangdong, OPPO is an electronics manufacturer that delivers
mobile devices in more than 20 countries. Its major product lines include portable media players,
LCD TVs, DVD/ Blu-ray disc players, feature phones and, most recently, smart phones and
tablets.

Having successfully entered China’s mobile phone market in 2008, OPPO began exploring
international expansion in 2010.

By mid-2014, OPPO had established a presence in the US, China, Australia and other countries
in Europe, Asia, the Middle East and Africa. By now, the tactile and aesthetic qualities of
OPPO’s designs, and its commitment to co-developing products with its customers through user-
experience feedback channels had achieved widespread recognition.

As such, with its latest N3 and R5 models, OPPO started in the final quarter of 2014 its most
challenging cross-border expansion project yet – delving into Pakistan`s saturated Smartphone
market.

The context

The rise of smart phones has been swift, with technological innovation creating an incredibly
sophisticated mobile ecosystem. Pakistan`s advanced infrastructure meant it was uniquely poised
within this vibrant scene. The early introduction of 3G and public Wi-Fi made a Pakistan`s
“mobile-first” nation. By 2014, Pakistan had the highest Smartphone adoption rate globally, with
most consumers carrying either an Apple or Samsung model.

“As a new entrant in a mature and small, but affluent market, quickly building brand equity
would be essential for successful expansion. So we sought a partner that could provide a
comprehensive understanding of and access to local consumers across multiple platforms,” said
Sean Deng, managing director of OPPO Pakistan.
 Building brand equity involved a three-step approach:

 Increasing brand awareness among consumers mostly likely to purchase smart phones.
 Driving preference by communicating the distinctiveness of the new N3 and R5 smart
phones.
 Encouraging product trials at the newly opened OPPO Concept Store at Mall 1 and Trade
centre in Gujranwala and in other cities of Pakistan.
Finally, the campaign had to be consistent with OPPO’s brand positioning, “The Art of
Technology”, which required its marketing partner to consider the granular details in everyday
living and combine that with technology to create trendsetting by-products and unique consumer
experiences.

Marketing Strategy

Early Challenges:

In 2014 OPPO plans to enter in the new geographical area called sub-continent, in its initial
analysis OPPO found that Pakistan and India are the most advance and technology oriented
nations in the area so they found an opportunity and starts their operations in India with heavy
investment, after entering in Indian market OPPO’s major focus was on marketing activities as
production was being continued in China, in marketing activities OPPO’s initial focus was on
developing an television commercial based on Indian culture, that contains Indian actors, so that
new target market can easily understand it and TVC can capture the attention of target audience
because of Indian actors. For this purpose; new idea was developed on one of the successful
model of OPPO Smartphone called N1 and transformed on two Indian actors Sonam Kapoor and
Haritik Roshan. After completion of television commercial it runs of different channels
successfully, all this was going smoothly and successfully in India and now OPPO began to think
about entering into second largest market of sub-continent called Pakistan.
OPPO was thinking about to enter in the new market but Q mobile the largest selling mobile
phone in Pakistan took the entry of OPPO Smartphone as a serious threat and do some planning
that OPPO had never ever thought about that. As OPPO’s Indian TVC contain two Indian actors
that were also famous in Pakistan that’s why OPPO decided to play the same TVC Pakistan to
reduce its marketing costs, Q mobile somehow came to know all the internal planning of OPPO
Smartphone and launch their new model Z6 with highest specifications and highest price at
present time, after launching its new model Q mobile planned to made to new TV ad as well that
will contains one of Indian actors OPPO had casted in their ad, for this purpose they made a
contract with Sonam Kapoor, the ad was developed and run on TV successfully, further more Q
mobile gets the Copy Rights for its celebrity that have endorsed and made it a clear ban for
OPPO to run its same ad in Pakistan So OPPO before entering in the Pakistan gets some serious
Surprises in terms of competition they have never thought. After all this OPPO had to do all the
stuff related to TV ad again for Pakistan. OPPO tried to do this again in new market as well but
the costs this time were much higher than the expectations of OPPO marketing management
team. As well known celebrities of Pakistan demanded a much higher amount than Indian
celebrities so OPPO left this all and decided to run the same TV ad which they used in China, the
same TV ad in Pakistan did not get the attention of target audience as it was totally in Chinese
culture and context. So it becomes challenge for OPPO to manage TV ads in country where the
TV ad has significant impact on customer buying behavior, they had to think about how to
manage this issue with a limited budget.

Acknowledging that digital media had created a more elusive consumer with short-term thinking
and who lives across multiple screens, OPPO sought a partner that had been keeping up with the
times, one that apart from offering a cross-platform approach was agile and armed with the latest
marketing technology.

World call’s latest data-driven solutions analyzed dynamic consumer behavior across platforms
and delivered robust insights. With these insights, OPPO could then strategize and select the
right platforms for effective engagement, optimizing its advertising spend.
 Daily channel-by-channel viewing data from World call’s TV subscribers was combined with
insights from World call’s Project Newsroom – a commissioned report detailing household
demographics and product consumption information. Using this data set, consumers who tuned
in to watch the Sports Channels were identified as OPPO’s most relevant niche target segment
for the following reasons:

 Sports Channels viewers had one of the highest purchase percentages (81%) for
consumer electronics.
 A majority (40%) of Sports Channels viewers within the 20-39 age group and 32% were
highly affluent (>50,000 monthly household income) – in line with OPPO’s aim of “capturing
energetic young hearts”.
 These viewers are also steadfast seekers of the best in local food and beverage (97%) –
the R3 and N5’s superior Smartphone cameras being a perfect foil for these “food Lovers”.
Informed by these insights, OPPO opted for a marketing campaign that included World call’s TV
channels broadcasting the Sports Events, online like facebook and KFC – popular sources for
Fast food and beverage and lifestyle recommendations, as well as news aggregator Geo News for
content amplification.

“With the fragmentation of media consumption, ‘audience targeting’ has become today’s
marketing imperative. The identification of target segments must be insight-driven for sound
decision-making. World call’s latest data-driven solutions, variety of platforms and Live Cricket
telecasts provide OPPO with flexibility and dynamism. Consequently we have been partnering
with World call since we entered Pakistan,” Deng said.
 Business results

OPPO evaluates a marketing campaign by looking at how it increases brand awareness, drives
product preference, increases foot traffic at its Concept Store and contributes to revenue. Overall,
the campaign led to an increase in brand awareness and consumer purchasing intent, contributing
to a rise in OPPO’s Smartphone sales during the final quarter of 2014, while delivering the
following:

1. Increased brand awareness by engaging more than 243,000 World call viewers per month
from October 2014 to December 2014.
2. Association with the most watched Cricket matches reinforced OPPO’s premium
positioning.
3. Optimized media plan across both “live” and repeat Cricket matches by airing an OPPO
TVC to reach out to its target audience of young, affluent and tech-savvy consumers.
4. Brand integration within Thanda Garam, a top-rating show on Geo Super hosted by
celebrity host Nauman , where coverage on the OPPO launch event was seamlessly incorporated.
5. Content marketing and online re-targeting to highlight product features, driving
preference across online and mobile platforms. These efforts engaged more than 1.3 million
active monthly users.
6. A video of the OPPO launch event on Facebook and YouTube, along with advertorials
and customized banners highlighting features of the N3 and R5.
7. KFC Creative execution of gallery sponsorship on Pakistan`s top food and beverage
restaurant, where a dining guide of KFC featured images taken using the N3’s high-res auto-
rotating camera.
8. OPPO`s Advertorials and banners on Geo news, ensuring clutter-breaking brand
visibility.
9. Product giveaways and in-store footage which encouraged product trials and drove foot
traffic to the OPPO Concept Store from October 2014 to December 2014.
10. A quiz was incorporated in 2015, allowing viewers a chance to win a new N3
smartphone.
11. Segments of Goals HQ were shot in the OPPO Concept Store to provide a sneak preview
of the store’s physical space and location.
“World call advertising channels are an integral part of OPPO’s intent to build its brand equity in
Pakistan,” Deng said.

“Given the integrative nature of the World call platform, OPPO has certainly benefited in terms
of heightened brand and product awareness.

“It is for this reason and also due to the collaborative nature of the World call advertising team
that we have embarked on a second campaign in February 2015. As we continue our content
marketing efforts, we project our smartphone sales to grow at an increasing rate in the months
ahead.”

The second campaign

With World call introducing virtual reality (VR) and augmented reality (AR) technology in early
2015 to help local advertisers address the challenge of viewers paying less attention during
commercial breaks, OPPO will be the first brand in Pakistan to utilize the World call acquired
virtual studio.

“Being a technology company, we are always on the lookout for new ways to showcase the
brand in a manner that befits our obsession with quality and R&D,” Deng said.

“With VR and AR technology, we are able to have our brand visually incorporated into sports
programs through three-dimensional scoreboards and a stylistically redesigned virtual
background. This ensures that our content captures the attention of audiences when viewership is
at its peak.

“World call approach when providing marketing services mirrors OPPO’s brand philosophy
when designing consumer electronics.
“As a part of improving the user experience associated with our products, we are keen to
advance the use of VR and AR, as well as our engagement with local football fans. Our second
campaign involves advertising on World call TV channels broadcasting the BPL and English FA
Cup, coupled with World call online and SMS advertising platforms.”

Exhibit 1 OPPO Products and Prices

MODELS PRICES

OPPO JOY 7500

OPPO JOY PLUS 8500
OPPO JOY 3 10,999
OPPO NEO 3 14,500
OPPO NEO 5 14,999
OPPO YOYO 15,990
OPPO NEO 5S 16,999
OPPO MIRROR 3 19,990
OPPO NEO 7 19,999
OPPO MIRROR 5 25,800
OPPO R1K 29,900
OPPO R7 LITE 29,990
OPPO FIND 7A 29,990
OPPO R5 39,990
OPPO R7 PLUS 39.990
OPPO N3 59,900
Exhibit 2 Promotions
Exhibit 3 Income Statement of OPPO

Particulars Years

2013 (Rs) 2014 (Rs) 2015 (Rs)

Sales 10,963,200 13,057,680 25,199,448

Less COGS 6,132,600 8,250,860 16,384,460

Gross Profit 4,830,600 4,806,820 8,814,988

Less: Op.Expenses

Administration 451,200 496,320 545,952

Expenses

Selling Expenses 1,200,000 1,320,000 1,452,000

Total expenses 1,651,200 1,816,320 1,997,952

Operating Profits 3,179,400 2,990,500 6,817,036

Less Tax (17%) 540,498 508,385 1,158,896

Profit After Tax 2,638,902 2,482,115 5,658,139