20.10.17

Who is BBK, the world’s third largest phone manufacturer?

The smartphone market seems to be a perpetual fight for third place behind Samsung and Apple. Huawei has been trying to set itself up as the third largest brand, with successful pushes into the Asian, European, and now even U.S. markets. But they’ve got some relatively lesser-known competition to confront before they can claim the title of third— BBK Electronics.

BBK is a Chinese multinational corporation that owns a number of popular brands across various consumer electronics markets, including headphones, Blu-ray players, and smartphones. It owns two major smartphone brands and one fan favourite— Oppo, Vivo, and OnePlus.

Who is BBK?

BBK Electronics has been operating in various sections of China’s electronics industry since around the 1990’s. The company is spearheaded by reclusive billionaire Duan Yongping. After successfully generating more than 1 billion Yuan from the “Subor” gaming console, a competitor to the Nintendo Entertainment System, Duan left his position running a Chinese factory in 1995. He then started the company Bubugao, which would eventually become BBK. The company now owns factories spread over 10 hectares of land and more than 17,000 employees.

BBK Electronics began by manufacturing a range of CD, MP3, and DVD players, along with other household appliances, which appeared under a range of global brands. In 2004 Duan founded Oppo with CEO Tony Chen. Oppo built on Duan’s experience in the video market by selling DVD and Blu-ray players, before moving into the smartphone market.

Vivo appeared a little later in 2009, and was founded by Duan and Vivo CEO Shen Wei. The first Vivo smartphones appeared in 2011 with a focus on ultra-slim form factors, while relying on celebrity endorsements to capitalize on the smartphone boom.

OnePlus, the BBK brand that Western customers might be most familiar with, wasn’t started by Duan. It was founded by former Oppo vice president Pete Lau and co-founder Carl Pei in 2013, and is a subsidiary of Oppo. That still means it’s owned by parent company BBK. OnePlus is arguably the most premium brand of the three, however it takes a different approach to Oppo and Vivo’s retail based business model. OnePlus primarily targets online sales via platforms like Amazon, which has helped BBK enter European and US markets.

Second or third place, depending on who you ask

When it comes to smartphones, BBK Electronics is a big deal, even though most consumers have never heard of it. Oppo and Vivo have long been major players not just in the Chinese smartphone market, but internationally too.

In China, Oppo and Vivo have managed to surpass the growth rate of the once seemingly invincible Xiaomi by building a network of local stores, while its competitor focused on its efforts online. Apple and Samsung have struggled to keep pace with the cost competitive nature of China’s homegrown mobile brands, including those in the BBK network. According to Counterpoint Research, Huawei is the biggest single brand with some 20.2% of China’s market, but Oppo and Vivo are both very close behind on 18.8% and 17.0% respectively. Combined, BBK’s smartphone brands have a comfortable lead with 35.8% of China’s huge smartphone market.

Turning to the global outlook. In Q1 2017, Gartner research revealed that Oppo shipped around 30.9 million smartphones, with Vivo not far behind on 25.8 million. That’s a combined total of 56.7 million. By comparison, Samsung shipped 78.6 million phones in the same quarter and Apple 51.9 million. BBK companies actually shipped more than Apple in Q1 2017, arguably putting them in second place, according to Gartner.

A similar report by IDC also paints a close picture, but with Apple retaining a small lead. According to its data, in Q1 2017 Samsung accounted for 23.3% of the global market, Apple on 14.7%, Huawei 10.0%, Oppo 7.5%, and Vivo 5.5%. Combined that would give BBK a market share of 13 percent, putting the company just behind Apple, but ahead of Huawei. OnePlus’ market share isn’t expected to account for even 1% of global sales, so it makes no meaningful difference to the rankings.

Market estimates always have some margin of error, but the data seems to suggest a close race for second between BBK and Apple. Throw Huawei into the mix and we’re looking at three major companies all vying to close that gap on Samsung. That’s a different picture than when looking at these brands individually, which sets the situation up as a simple first, second, and third ranking.

Looking forward

BBK Electronics isn’t seemingly satisfied with just having a strong lead in China. The company recently overtook Samsung as the largest manufacturer in India, a key growth market. It also has a new phone brand named ikoo. This fourth smartphone sub-brand is looking to leverage experience in children’s educational electronic toys to create the world’s first education handset.

By spreading itself across multiple brands, BBK has managed to tailor its products to suit various market segments. The strategy has clearly paid off in China. Whether or not it will work in Western markets remains to be seen.



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