Mobile Phone Manufacturers Target Young Generation as Celebrity-Based Advertising Costs Burgeon
Li Na
/SOURCE : Yicai
Mobile Phone Manufacturers Target Young Generation as Celebrity-Based Advertising Costs Burgeon

(Yicai Global) July 10 -- The young people born after 1990, who have different consumption ideas such as "spending money to improve the quality of life rather than saving for the future," has increasingly become a target for many mobile phone manufacturers, which also resulted in soaring endorsement money paid to film and television stars.

With the advent of summer holiday, China's various mobile phone manufacturers began a "marketing campaign" targeting that generation. Huawei P Series, Honor, Oppo R11, Vivo X9, Gionee S10, MiTo M8 and other phone models targeting young and fashionable people have become the main summer products for mobile phone manufacturers.

The sales of mobile phones priced at CNY2,500 (USD367) to 3,000 increased substantially compared with the year earlier, Li Rui, an analyst at Sinomax, told Yicai Global. Entering the summer holiday market, these prices are expected to continue to rise.

For mobile phone manufacturers, this is not an easy campaign. Reporters found in the major stores and through search of mobile phone stores that "taking better photos" is the dominant campaign theme for mobile phone manufacturers, and almost every manufacturer targeting the youngsters' market will sign a "young hunk" for endorsement.

In addition to robbing resources in the mobile phone configuration, manufacturers also start fierce competition in marketing. One saying in the market goes, "The world has thousands of variety shows; Oppo and Vivo take half respectively." That is to say, in mobile marketing, Oppo and Vivo spares no cost in mobile marketing.

Even Huawei Honor's president, Zhao Ming, lamented that although the Honor series have the support of the giant Huawei, in the marketing costs however, it is still inferior compared with these two mobile phone manufacturers. Zhao revealed to Yicai Global reporter that the current marketing costs of Honor series only accounts for 2 percent of Huawei's total marketing costs.

Since last year, mobile phone makers have been keen to compete for the A-list and B-list stars and the title of popular entertainment programs.

"Gionee S10 found Xue Zhiqian for endorsement, because in addition to the hope to continue to consolidate the traditional political and commercial crowd of clients, Gionee also wants to stand firm among young people." Gionee's spokesman Huo Shijie told Yicai Global that Gionee wants to make a difference in the youth market, and that the sales that this consumer group can drive are crucial to Gionee's second-tier position in the mobile market.

Yicai Global reporter learned that the current cost of Xue Zhiqian's micro-blog advertising has been rocketing from the previous CNY7,000 to CNY700,000.

"If you go through traditional marketing, you will pay more than 10 times the price. Our play is innovative and creative. In fact, the price is very low," said Oppo's vice president Wu Qiang who believes that mobile phone manufacturers are in a difficult situation, but the more difficult part is to increase market input.

In addition to configuration, publicity, channels are also testing the strength of mobile phone manufacturers in the battlefield.

Yicai Global reporter visited a county of Heze in Shandong province early this year. In Wu County's Bole Street, the eye-catching green and blue Oppo and Vivo seems to be the most attractive mobile phone brands. After a rough calculation by the reporter, in Heze, a market of 8 million population, apart from the cooperation network and operator stores, Oppo's self-operated experience shops amount to 11.

Deputy director of research at GFK's communications division, Jin RuiZhaom said in an interview that with the booming of township market dividends, domestic mobile phones' offline sales recorded a growth of 17.9 percent in 2016, three times than the growth of online sales.

With the full channel infiltration, Oppo and Vivo entered the top three positions in domestic mobile phone sales. The market share of Huawei, Oppo, and Vivo was 24.7 percent, 17.6 percent and 13.4 percent, respectively, in the first quarter of 2017, according to data from TrendForce.

"Oppo and Vivo's nanny style makes the channel control ability very strong and the goods controlling ability and profit priority principle make many shops become the stronghold of these two brands in the township market." In the offline retail outlets, the independent store of communications has become the focus of contention and this industry occupies a 47 percent share of the offline retail, said Jin Ruizhao.

According to Oppo's official data, as of 2017, Oppo's offline stores reached over 200,000, far more than Huawei, and almost 10 times more than Meizu, whose competitiveness relatively lags behind.

In addition, online business channel has become the main targeting method for the internet-based mobile phone manufacturers. OnePlus, Smartisan, 360 and other manufacturers are looking for young groups who like their brand in this channel.

"The young group is erupting, and with the arrival of the last batch of young people born after 1990, the consumer market has gradually been taken over by the real internet generation. Their growth means the mainstream way of consumption market and the shaping of social culture will go through full and profound changes," secretary-general of Mobile Phone China Alliance, Wang Yanhui, told Yicai Global.

However, Wang believes that hardware innovation is weak and that highly similar marketing operation paths are hindering the development of mobile phone manufacturers. It is still unclear how the future will unfold and whether the younger groups can respond to the marketing gimmicks and sales targets.

Follow Yicai Global on
Keywords: SMARTPHONE , MARKETING , HUAWEI , OPPO , Vivo , MILLENNIALS , ONLINE , Offline , Retailer , Branding , Celebrity , Stars , Endorsement , New Phones