How BBK-owned Vivo and Oppo in China face scrutiny, and still dominate in India

What is common between Oppo, Vivo, iQOO, OnePlus, and Realme besides the fact that they are all among the leading smartphone brands in India? All of them are owned by Chinese multinational electronics corporation BBK.

Not many people in the country may have heard of BBK Electronics – the company that has been instrumental in the emergence of five best-selling smartphone brands globally – Oppo, Vivo, Realme, OnePlus and iQOO.

The Chinese company, which was founded by Duan Yongping, also known as the “Chinese Warren Buffett”, has competitors like Samsung, Huawei and Xiaomi in India and globally.

Recently, two of its brands — Oppo and Vivo — came under scrutiny from the tax authorities in India.

Last week, the Enforcement Department (ED) said that the Indian arm of Vivo had sent Rs 62,476 crore “illegally” to China to avoid paying taxes in India. This, according to ED is almost half of Vivo’s turnover of Rs 1,25,185 crore.

Just a few days later, the Directorate of Revenue Intelligence (DRI) detected duty evasion of around Rs 4,389 crore by Oppo Mobiles India Private Limited.

Investigations also revealed that Oppo India diverted through royalties payments and licensing fees to multinational corporations, including those in China, rather than using proprietary, technology, trademark and intellectual property rights (IPR) licences.

A number of Chinese companies have come under scrutiny by Indian authorities in the past two years after a confrontation between forces from the two countries in eastern Ladakh.

Recently, the scrutiny has tightened on Oppo and Vivo, both of which are owned by the BBK Group.

However, the presence of BBK-owned brands in the Indian smartphone space has been increasing at a steady pace in the past few years.

BBK Group dominance in India

BBK Group’s dominance in the country has grown despite geopolitical tensions between India and China. This is mainly due to the variety of smartphones it offers through the brands owned by the group.

BBK was the largest smartphone maker in the world, with a market share of 19% in 2020, according to Counterpoint Research data. Oppo, Vivo, and Realme each sold 262.7 million units in 2020, beating both Samsung and Huawei.

According to a Counterpoint report, Chinese brands together controlled 75% of the Indian market in 2020, up from 72% a year earlier. Xiaomi was the largest in terms of shipment volume, with a 26% share, followed by Samsung (21%), Vivo (16%), Realme (13%), and Oppo (10%).

BBK Group overtook South Korean rival Samsung Electronics to emerge as the largest mobile phone maker in the Indian market by consolidated sales in 2019-20. For calendar year 2019, BBK Group dominated the Indian smartphone space with a 37 percent share, compared to Xiaomi’s 28 percent, according to Counterpoint data.

In 2020, amid supply disruptions due to Covid-19 lockdowns, these brands brought 5G-enabled and foldable devices to give stiff competition to other smartphone players.

In the second quarter of 2020, Vivo accounted for 17% of the market share in India, Oppo 9%, and Realme 11%. Vivo was also the main sponsor of the Indian Premier League (IPL) from 2016 to 2019 and in 2021.

Vivo, which entered India in 2014, captured a 15 percent market share in the Indian smartphone segment in the first quarter of 2022 with 5.5 million devices shipped, according to IDC.

Meanwhile, OnePlus has begun to eat up market share in the premium smartphone space, and Oppo and Vivo have taken the lead in the mid-range segment. Besides, iQOO and Realme are also booming at this time and Indian smartphone users are spoiled for choices.

The Indian smartphone market grew just 2 percent year-on-year in the first quarter of the current financial year as vendors shipped 38 million smartphones in the country. During the quarter, Xiaomi remained the top brand in India, shipping 8 million units, followed by Samsung which shipped 6.9 million units during the same time.

Realme reported a 40 percent growth in shipments as the company shipped 6 million units during the first quarter. Realme accounted for 16 percent market share and was only third in terms of shipments after Xiaomi and Samsung. Vivo (5.7 million units) and Oppo (4.6 million) are fourth and fifth with 15 percent market share, 12 percent market share, according to a Canalys report.

The rise of the Bank of Bahrain and Kuwait

In 1995, Duan Yongping founded BBK Electronics in Dongguan to manufacture VCD players, MP3 players and other products.

The group later ventured into the mobile business with the creation of OPPO in 2004 and Vivo in 2009. BBK has diversified its portfolio, introducing new companies such as OnePlus, Realme and, most recently, iQOO.

BBK now has five smartphone brands and with the likes of OPPO and Vivo it has its sights set on the UK and other western markets. While each brand operates in a silo, they share hardware resources, giving them a significant advantage over smaller brands.

Collectively, BBK is the third largest manufacturer in the world, and is larger than Huawei in terms of size.

According to data from research firm Canalys from April, BBK Group is poised to become the world’s largest smartphone maker, with Oppo and Vivo taking global market shares of 10% and 8%, respectively. This puts BBK on par with Apple (18%) and ahead of Xiaomi at 13%.