OPPO (including OnePlus since Q3 2021) posted soft performance in Q1 2022. It shipped 29.8 million units of smartphones worldwide, down -22% YoY.
OPPO is facing strong headwinds in China market which is suffering from the rising covid cases and the tightened lock-down measures. Consumers’ spending has been dampened amid economic uncertainties. Vendor’s manufacturing and logistic is also disturbed by lock-down measures rolling across the country. OPPO topped China market in Q1 2022, but its ledging edge is tiny. It signals the intensified competition in home market, following the closure of the opportunity window from Huawei’s withdraw over the past two years.
India is OPPO’s largest overseas market, where OPPO is also facing intensified competition as well as the rising geopolitical risks. OPPO underperformed the market in Q1 2022, and it is now in the danger of being pushed out of the top five list by the likes of TRANSSION. Moreover, India tax authorities had already raided OPPO’s distribution partners in Q4 2021 which is reportedly linked with India government’s intension to force OPPO to work with local distributors. Indian authority’s recent seizure of USD 725 million of Xiaomi’s asset over alleged illegal remittances charge is also a signal for OPPO and other Chinese vendors who are doing business in India.
Southeast Asia is OPPO’s key overseas markets as well, where the vendor has established extensive distribution system after years of efforts. These markets have been witnessing fast growth of online channel since 2020. Several waves of covid outbreaks as well as the aggressive development of e-commerce platform providers like Lazada and Shopee have jointly stimulated the online penetration rate in the area. As an offline-driven company, OPPO faces challenges amid the shift. It remains to be seen how OPPO will respond the online surge. Meanwhile, it needs to balance online and offline channel mix to ensure the existing offline partners.
Facing these challenges, OPPO slowed down the product launch cycle and overseas expansion this quarter. We expect OPPO will continue to take a more conservative stand in 2022.
Our latest report Q1 ’22: OPPO: Big Fall on Volume and Value was published. WSS clients could access the full report via this link.
Meanwhile, we have employed SA Lens to evaluate vendors and compare them with their peers. Below is the evaluation on OPPO’s performance in Q1 2022.
