Looking for the blue ocean overseas

The domestic mobile phone market has been in a chaotic pattern, but the overseas landscape is unique. Shenzhen Disco Technology Co., which focuses on the overseas mobile phone market, has seen a 50 percent increase in sales this year. Chen Jiageng, the company's chief product officer, said: "We will continue to give full play to our advantages in the supply chain system, stagger homogeneous competition with micro-innovation, and deeply cultivate overseas markets. At present, we will not easily enter the domestic market.

Establish a stable supply chain system

The collapse of Shenzhen Fuchang Electronic Technology Co., Ltd., a first-tier supplier of Huawei and ZTE, draws everyone's attention to the emergence of the mobile phone supply chain in 2015 A wave of closures. In fact, as early as 2013, Tan Kah Kee was aware of the instability of the supply chain. Disco's orders have always been stable, but since 2013, some suppliers who also supply domestic mobile phone brands or other customers have experienced capital chain deterioration and unfavorable development, which also affected Disco. In order to solve the bottleneck of the supply chain, Disco has strengthened the review and training of supplier qualifications, and invested in some industries in the vertically integrated industrial chain to reduce the dependence on suppliers.

Disco is wary after all sorts of problems with its suppliers. When they choose suppliers, they don't look for the industry's largest and most well-known, but for those who are moderately sized, deliver on time, can guarantee quality, and evaluate their other customers. In the case of sufficient orders, the company has invested 60 million since 2013 to manufacture some important mobile phone components, such as motherboards, molds, batteries, accessories, etc.

Talking about Fuchang Electronics, Tan Kah Kee believes that there are two reasons for its collapse: one is the price pressure caused by vicious competition, and the other is that the funds may not be well allocated. Although Fuchang Electronics supplies large companies, it is possible that they sign orders at very low prices. "For example, the thousand-dollar machines launched by some big brands have relatively high configuration, and basically there is no money to make hardware. price pressure."

The platform of Fuchang Electronics is relatively large, with thousands of employees, and the slight changes in the outside world will be magnified exponentially. For example, the salary increase, although the increase of individual employees is not large, but in general, it is a very large number. The price of raw materials is also unstable. The source of raw materials is only a few companies, which is highly monopolized. In the absence of competitors, suppliers may raise prices at will. The mobile phone manufacturing industry has entered a "sea of blood" competition, and the price will be lowered every quarter, but the cost has been increasing, so the profit margin is constantly compressed, and when the revenue and expenditure are not balanced, it will cause the consequences of bankruptcy.

In addition, if the boss of the company invests outside, the funds are not allocated properly, and the investment cannot be recovered, which will also cause the capital chain to break.

In order to establish a healthy supply chain system, Disco has cultivated a group of stable suppliers. "As long as the supplier can be cultivated, we will not dislike what he is now and what stage he is in. We will help them grow rapidly and keep up with our development." Tan Kah Kee said: "The supplier's process technology has problems, or If the raw materials are not found for a while, we will use our own resources to provide them with technical guidance or recommend raw material suppliers." When doing product innovation, Disco will share information with suppliers to help them grow together.

In the past two years, the price of mobile phone spare parts has been reduced, and suppliers have also ceded profits to disco according to the industry level. With the support of suppliers, Disco asked customers to increase the order volume to ensure that suppliers can have profit margins, thereby creating a benign ecosystem.

Micro-innovation in market segments

Mobile phones are now a mature market, and there are not many differences in appearance and functions. To avoid homogeneous competition, it is necessary to thoroughly research customers , find the special needs of customers, make some small innovations, and highlight their unique places.

Disco's mobile phone market is overseas, and each country or region is a segmented market, with different languages, customs, consumption habits, boot habits, pictures, music, ringtones, and customized software. Are not the same. Every year, Tan Kah Kee attends several exhibitions at home and abroad, talks with a large number of customers, and understands the needs of the local market. As long as he has time, he will also go to clients who have offices in China to discuss market changes and trends; or go abroad to investigate market conditions.

Compared with companies in the same category, Disco invests more in research and development, accounting for 5% to 10% of the total investment. Because it has its own R&D team, the company can do it according to customers' habits, needs and special customization requirements. For example, Muslims in Dubai have to pray every day. Disco has installed software indicating the direction of Mecca City and a timed alarm clock on a mobile phone sold in Dubai to remind them to pray. In Russia, mobile phones must be able to withstand the cold of minus 20 degrees, so all products must be tested at low temperature.

The technologies used in disco mobile phones are all open technologies freely available on open platforms. For example, the Android system is directly licensed to companies for free. Some products exported to European countries require express authorization, and disco will follow the regulations to obtain relevant approvals. Some mobile phones are equipped with the Android Google system, and they will send the product to the place designated by Google for certification. "These certifications required by the governments of European and American countries also help us not to infringe the patent rights of some international or local companies. Although we spent more money and time to do this, it also solved our worries." Chen Jiageng said Compulsory certification in European and American countries is not objectionable, because "protect disco products from being sued by Apple or other brands".

Zhuang Xiaofeng, Chairman and CEO of Shenzhen Autoda Holding Group Co., Ltd., also agrees with the need for micro-innovation in the mobile phone industry. He attended the annual meeting of Huawei and Meizu last year and found that both companies are using the idea of micro innovation to innovate mobile phones. When introducing mate7, Huawei said: our company mate7 is very successful, and it has achieved the first queuing of domestic mobile phones. Why? Because of the smart unlocking function, Apple 5 is using smart unlocking. Zhuang Xiaofeng believes that what Huawei actually wants to express is, "Mate 7 surpasses Apple in this regard, so it is very successful."

At the Meizu mx4 pro conference, the president of Meizu said with great confidence: "This product will be popular because it looks very much like Apple 6 in front, and Huawei mate is in the back." The conclusion is: "It's not that copying is bad, but that copying is reasonable, principled, bottom-line, and innovative."

Leading users into Internet life

2014 , disco sales have doubled from the previous year and this year is 50% more than last year. Why didn't it double this year? Because Disco deliberately controls the shipments of mobile phones, it guides the consumption habits of users in a planned way. Since most of the markets in which it is located are in the era of switching from feature phones to smart phones, Disco made arrangements in advance, cleared 2G feature phones, and switched to providing smart phones. Considering that users in this market are price-sensitive, they are only a little ahead of the market and have launched 2G smartphones as a transition product to 3G smartphones to gradually guide their consumption habits and lead them into the Internet life.

"2G smart phones cost only two or three dollars more than 2G feature phones, and they can be turned into smart phones. Although the network speed is a bit slower, there is a qualitative improvement in functions. They can If you go to Facebook, you can download Watchup and other applications. However, if you switch from a 2G smartphone to a 3G smartphone, the price will increase by another three dollars.” Tan Kah Kee’s plan is, “Let’s take a small step first, When the consumption level of users increases and the cost of 3G smart phones drops, we will introduce 3G mobile phones that suit the needs of users.”

Disco will also provide customers with product sales solutions around the market trends—overseas agents | agents, telling them what the market trends are and which products will sell well in the future. Because the product line is rich, they can provide corresponding products. Overseas agents | dealers can save a lot of time and cost by cooperating with them.

Work together to develop a bigger market

From 2008 till now, disco has encountered some difficulties in the development process, such as disorderly competition, how to clear the inventory, insufficient labor resources , less financial support, etc. This is also a problem that the entire mobile phone industry, and even the Chinese manufacturing industry, has encountered more or less.

Disco found that as long as it finds a good market and develops models and products that suit that market's preference, there will be disorderly competition. Everyone rushed into this market, copying products and ideas, and fighting price wars to win customers. To this end, Disco has strengthened the protection of intellectual property rights and made a series of certifications to protect its own resources.

Cleaning|clearing inventory is another challenge. Technological progress or product upgrades will bring about a large number of obsolete products. This is because, on the one hand, the mobile phone industry is developing rapidly, from 2G to 3G to 4G, and from small screens to large screens; on the other hand, consumer habits change rapidly, If you are used to the big screen, you can't use the small screen. For mobile phone suppliers, once the order placed by the customer is not picked up and stored in the warehouse, these goods cannot be sold and become a loss. Although disco has entered multiple markets and can adjust to each other and clear the inventory, they still consider the inventory to be very risky.

There are various shapes for the assembly of mobile phones. There is no suitable robot to replace manual assembly for the time being, and automatic assembly cannot be realized. The assembly mainly depends on people. There are fewer and fewer suitable laborers in China. Many people in the new generation do not like to do manufacturing and lack the spirit of craftsmanship.

When the production capacity of the enterprise increases to a certain extent and the market develops to a certain extent, the working capital will also be under pressure. However, mobile phone companies, and even entire manufacturing companies, do not get much support in terms of capital, and their expansion is also limited.

Disco has not entered the domestic market for the time being, not only because of financial pressure and fierce market competition, but also because of the lack of an honest business environment in the domestic market. Most domestic use 3-month and 6-month payment methods. Disco's special consultant Cui Xingjie believes that this payment method has led to various disadvantages. "Some customers later complained for various reasons such as quality and service. It wastes a lot of time and energy. We have always settled with customers and suppliers in cash, and only a very small three-month payment. Overseas buyers first inspect the goods in the factory, and we provide spare parts or spare machines to solve customers' concerns about quality and after-sales concerns.”

After delayed payment has become an industry norm, mobile phone suppliers are under great financial pressure, and at the same time, a loophole has been left in the system, which has accumulated capital for some bosses to run away. Cui Xingjie said: "Some bosses owe their suppliers several months of money, and then run away with the money, or suddenly declare bankruptcy. If there is a cash transaction, there will be no such loopholes, and the boss does not need and cannot easily run away."

After years of development, China's mobile phone manufacturing industry has accumulated considerable amounts of time. At present, most of the global mobile phone spare parts are produced in China. Cui Xingjie suggested to learn from the Jewish business thinking: "Everyone, you are your characteristics, I am my characteristics, and each other caters to the needs of customers in their respective market segments." Mobile phone manufacturers, or Chinese manufacturers, if you work together, you can Occupy a larger share of the global market and reap more profits.