Tech startup: I really do make mobile phones!

Chapter 252 India's Blue Ocean Market

Ahsan, Chigurat, an unremarkable village.

Old Wang, who once conspired with Xiao Li to embezzle Nietzsche's millions in cash, has now lost his big belly, has tanned skin, and wears local traditional clothing.

With the remaining capital he brought with him and through some maneuvering, he successfully married the daughter of the influential village chief, making her one of his own.

Unwilling to sit idle and live off his savings, Lao Wang, seeing the booming smartphone market in India that was monopolized by high-priced international brands, felt his desire to make counterfeit phones stirring again.

He found the secret channel he used to use to get to India and contacted Ah Bao in the port city.

"Brother Leopard, I've established myself here now and I want to get back to my old ways, making Indian 'domestic' mobile phones!"

During the call, Lao Wang described his plans.

"I've already thought of the brand. Isn't 4G really popular right now?"
Let's just call it a '5G phone'!
That sounds so advanced!
We need your help to source a batch of refurbished parts from North China, including screens, motherboards, and cameras. These should be mature solutions from two years ago, which are low-cost and stable!

Let my brother-in-law be the legal representative, and he can make a fortune in silence!

Ah Bao reported the situation to Fei Ji, the current president of Lian Sheng Group.

Fei Ji dared not act on his own initiative and immediately consulted Miss Gong behind him.

Shenzhen, office of the general manager of Orange Technology.

Gong Yun relayed Fei Ji's request to Chen Mo.

Chen Mo looked slightly surprised after hearing this.

"So, someone in India wants to sell 'refurbished phones,' and their distribution channels have reached Liansheng. They hope we can help them make strong purchases in North China so they can do re-export trade?"

Gong Yun nodded: "Yes, Lian Sheng is in charge of exports and settlements, while we are only responsible for purchasing domestically according to orders and earning a stable price difference."

Chen Mo pondered for a moment.

Although Orange Technology holds a 33.4% stake in Liansheng, deep down he is unwilling to have too much involvement with this complex group.

If Gong Yun hadn't been involved, how could Chen Mo have gotten involved with the Liansheng Group?
He summoned Xiao Zheng and asked him to use special channels to find out what the higher-ups were thinking.

Feedback came back quickly:

The authorities will not interfere with such normal entrepot trade. They also revealed that under the current international situation, North America is negotiating the "Three-in-One Agreement" with India, and China is also promoting the "Universal Investment Agreement". Even Zhonggang Saidi has gone to India to build a factory.

Against this backdrop, the normal business dealings between Orange and the Indian merchants even carried a hint of encouragement.

Chen Mo understood.

He also didn't want to deal directly with Indian businessmen whose reputation was questionable, especially since they might lack US dollars and need to barter with food, gold (India is one of the world's largest holders of gold).

Having a winning streak as a firewall and settlement buffer is perfect.

After receiving tacit approval, Chen Mo summoned Lin Xiaoxia, the marketing manager.

He first inquired about the sales volume of Orange 3 this quarter.

Lin Xiaoxia confidently reported: "President Chen, Orange 3 is gaining momentum!"
According to our data, although the profit margin per unit is lower than that of previous models, its overall competitiveness is extremely strong.

We predict that its sales lifecycle is expected to reach 9 months, which is comparable to excellent products such as the Apple 4S and Samsung Galaxy S2.

Chen Mo nodded in satisfaction, then changed the subject.

"Now I have a task for you."

Liansheng Group in Gangcheng has a batch of purchase orders for refurbished smartphone parts. You can hand them over to the supply chain team in the marketing department to purchase them from strong suppliers in North China with whom we have good relationships.

This is both a business deal and a 'carrot' for your channel integration efforts.

Lin Xiaoxia understood immediately.

She is pushing forward with the construction of direct sales channels, planning to establish new flagship stores and direct sales networks in central China after Mosk, which requires gradually incorporating high-quality second- and third-tier distributors under strong distributors in North China.

This external purchase order was undoubtedly a very significant bargaining chip for her when negotiating with the vendors.

"I understand, Mr. Chen! I guarantee I will complete the task and handle things carefully to avoid any backlash!" Lin Xiaxia accepted the order and left.

After receiving the detailed purchase list, Lin Xiaoxia was slightly surprised, as it consisted mostly of smartphone configurations from two years ago.

Features include the MediaTek MT6573 chip, a 480P LCD screen, and a 200-megapixel camera.

But when she thought about how it was being resold to the Indian market, she felt it made sense.

She had suggested entering the Indian market, but Chen Mo rejected it. Now it seems that President Chen may have had a more profound consideration.

With this order, Lin Xiaoxia made smooth progress in negotiations with some strong distributors in North China who were interested in transferring their channels, opening up a new chapter for Orange Technology's expansion of its direct sales channels in Central China.

Orange Technology also easily earned a considerable amount of extra income through this re-export business.

This batch of refurbished parts from North China Power was successfully transported to India through the Liansheng Group's channels.

Old Wang used some US dollars in cash, plus converted grain and gold, to settle accounts with Lian Sheng.

Subsequently, under Lao Wang's behind-the-scenes manipulation, his brother-in-law stepped forward and, under the banner of "India's first domestic brand" and "leading technology," officially launched the "5G phone"!
Although its configuration is outdated in China (roughly equivalent to the mainstream level in China in 2010-2011), its price is only one-sixth of that of similar products from Pingguo and Sanjing!

What more could you ask for!

For the Indian market, which is currently undergoing a transition from feature phones to smartphones, especially for price-sensitive middle-class and lower-class consumers, this is undoubtedly a "value-for-money wonder phone"!
The results were shocking:

On its first day, 5G smartphones sold a staggering 145 million units!

Far surpassing the record set in June of this year when Roberts' posthumous work, the Pingguo 5, premiered in North America!
This instantly ignited the Indian market, with the media hailing it as "the light of Indian-made smartphones!"
Hiding behind the scenes, Old Wang watched the snowflakes of orders and the gushing inflow of rupees and gold, feeling smug and self-satisfied. He seemed to see the Indian smartphone business empire he was about to build, and he was quite smug and self-satisfied.

The explosive popularity of 5G phones in India has immediately attracted great attention from the domestic mobile phone industry.

Lei Jun, watching the news, was both amazed by the huge potential of the Indian market and felt the pressure, so he immediately gathered his team.

"Look at this! The Indian market! A single refurbished phone can sell for 145 million!"

Our Redwheat mobile phone project must be accelerated!
Our positioning is to offer the ultimate value for money and seize the emerging lower-tier markets globally!

Shen Yiwei also attaches great importance to the Bubu Gao Group, which is headquartered in Dongguan.

He has always focused more on the United States and Southeast Asia, and his investment in the Indian market has been limited to the traditional product channels of Bubu Gao.

Seeing the success of the "5G phone," Shen Yiwei made up his mind.

"Immediately assemble a team to create a Y-series model specifically targeting the Indian market, based on the 'Blue Machine' V-series. Go test the waters as soon as possible!"

At the same time, he also made sure to inform his senior, Cheng Yonghao from Green Factory.

Cheng Yonghao's reply was more cautious: "Our OPPO has just established itself in Southeast Asia. Let's see how your Y series performs first!"

Whether it's the Red Wheat phone from Wheat, the Blue Y series from StepGao, or the models that OPPO may follow up with, their positioning is precisely aimed at the vast lower-tier market in India opened up by "5G phones".

Why are these emerging domestic giants not targeting the domestic lower-tier markets, but instead focusing on overseas markets?
The answer is simple: China's lower-tier markets are already impenetrable!
Data shows that Nietzsche and Orange have firmly occupied more than 85% of the domestic lower-tier market share through their strong offline direct sales and channel control.

These two companies are not competitors, but half-brothers. To some extent, they have even formed a monopoly in the lower-tier market.

Moreover, Orange also controls part of the supply chain for wheat, green factory, and step-by-step ointment, making the relationship delicate.

It's not that no one has tried; there have been attempts to penetrate the lower-tier markets in China.

At the beginning of this year, the "Xiao La Jiao" mobile phone, equipped with the Ali Cloud OS system, once overshadowed the Xiaomai 1S, which mainly relied on internet channels, thanks to the resource investment and internet marketing of the Ali Group.

In terms of public opinion, it seems poised to become a disruptor in the lower-tier market.

However, when the Orange 3 phone was launched with its revolutionary technology and highly competitive price, the sales of "Little Spicy Girl" plummeted.

Coupled with some internal operational problems, this rising star in the smartphone industry fell as quickly as a shooting star.

The lessons of the past are still fresh in our minds.

Therefore, a delicate balance has formed in the domestic smartphone industry: each company is temporarily sticking to its advantageous price range and channels, quietly cultivating the remaining untapped market niches.

But everyone knows that beneath the seemingly calm surface of the lake, turbulent currents are brewing.

Once the domestic market gap is filled, or competition in overseas markets like India intensifies, a smartphone war that will affect the domestic market will be inevitable.

Meanwhile, far away in India, Old Wang was unaware that the fire he had lit, fueled by information asymmetry and audacity, had already attracted several real crocodiles.

His "5G phone" empire, built on refurbished parts, is about to face a true blow.

His good days are probably numbered. Beijing, Wheat Headquarters.

Lei Jun's ability to take action is astonishing.

Just two months after the "5G phone" took the Indian market by storm, the Red Wheat team under Wheat Group quickly completed the model adaptation and production capacity allocation for the Indian market.

To make a strong start, Lei Jun personally flew to India and held a grand press conference in New Delhi.

The core of the press conference was the Redmai Asan phone, which had been repackaged and disguised as "carefully developed by an Indian local brand".

Wearing his signature jeans and black shirt, Lei Jun passionately introduced Red Wheat's ultimate cost-effectiveness on stage in his heavily accented English.

"This is our sincere offering for our Indian friends! The best configuration at the lowest price!"

During the interactive segment, perhaps due to excessive excitement, Lei Jun blurted out his signature phrase with an accent, "Hello! Thank you for coming! Are you OK?"

The Indian fans in the audience were taken aback at first, then burst into laughter and even more enthusiastic applause.

This scene was captured by reporters on the spot and quickly transmitted back to China, instantly igniting a frenzy on the internet.

"Are you OK?" quickly became a popular internet meme, and the countless netizens' jokes unexpectedly brought Redmai phones a viral marketing effect.

Even domestic sales of red wheat surged for a week, only to be overtaken by Orange 3 and Nietzsche 3.

Thanks to its mature online marketing strategy and quality control and performance far exceeding those of "5G phones", the Redmai phone quickly dominated Indian online channels as soon as it went on sale, with the first 50 units selling out instantly.

A large number of young Indian consumers who were originally attracted by "5G phones," and who are price-sensitive but also seek a better experience, have switched to Redmai.

Chigurat, Lao Wang's "5G phone" assembly workshop.

Looking at the rapidly declining sales figures, Lao Wang was as anxious as an ant on a hot pan.

The entry of Redmai phones was like a catfish, completely disrupting his rhythm.

After Lei Jun's explanation of the product specifications, Indian consumers began to compare the parameters and configurations. His two-year-old renovation plan seemed inadequate in the face of the brand-new Red Wheat.

"Upgrade! We must upgrade the configuration immediately!"

Old Wang yelled into the phone at Ah Bao, "Brother Bao! Find me the latest solution! The JF-17 400 series! A 720P LCD screen!"

And also, the battery! Battery life is key!
I heard there's a company in China called Yuancheng that developed a gaseous lithium battery with an incredibly fast charging speed. Is it possible to get their hands on one?

For gaseous lithium batteries
Old Wang didn't have much of an impression, but he remembered that his nemesis Chen Mo had also developed a new type of battery, and before he could verify it, he was arrested!
Abao relayed the request to Feiji and Gongyun.

When Chen Mo learned that the Indian merchants were so engrossed in Hongmai that they were about to switch to Yuancheng's gaseous lithium batteries, he simply smiled faintly.

When fish and clams fight, the fisherman profits!

Tell him, yes!
However, the price is three times that of a regular battery, and it requires cash payment with no after-sales service included!

Old Wang was blinded by competition and, having accumulated a large amount of gold and rubles in the early stages, was eager to reverse the market downturn. He gritted his teeth and accepted the harsh conditions.

A batch of premium-priced Far Orange gaseous lithium batteries, mixed in with ordinary refurbished parts, were once again transported to India through Lian Sheng's channels.

Old Wang's "5G Pro Max phone" was launched hastily. Although the configuration was improved and it was equipped with a "black technology" battery, the quality control and system optimization were far inferior to Hongmai. However, the price lost its advantage due to soaring costs, and the market response was mediocre.

While Lei Jun was shouting "Are you OK?" on stage and Lao Wang was frantically upgrading the configuration, Shen Yiwei's Bubu Gao team was rapidly expanding in the Indian market in a completely different and quiet way.

BubuGao Group has been deeply involved in the Indian distribution channels for many years, and its "BubuGao" audio equipment, DVDs and other products have long been distributed in many towns and cities in India.

A little-known fact: before 2012, there were only a few thousand offline stores selling Bubu Gao (a traditional Chinese medicine for tonifying body balms).

By 2020, the Bubu Cream series (Blue Factory + Green Factory + Little Genius) had 15 offline stores, covering 82% of second- and third-tier cities and below in India.

The market share of the Bubu Gao brand in the Indian smartphone market once reached an astonishing 40%. If it weren't calculated separately, Xiaomai would not have been able to hold the number one market share!

The Bubu Ointment brand seems to be quietly making a fortune!
Shen Yiwei made full use of this readily available, deep-rooted network of channels.

Instead of holding a grand press conference, he directed his ground promotion team to go deep into the markets and markets of India.

Relying on existing distributors and networks of the product, Blue Machine opened exclusive stores and counters in major cities and even second- and third-tier towns in India at an astonishing speed.

In just three months, thousands of Blueair stores have quietly opened in India.

Its "Blue Phone Y1," launched for the Indian market, quickly attracted consumers who trusted physical store experiences more and were less sensitive to online flash sales, thanks to its solid workmanship, focus on music phone and fast charging functions, as well as intensive advertising and promotion by sales staff in offline channels.

Like an undercurrent, the Blue Y1 quietly infiltrated the vast offline market outside of Redmai's online offensive and the chaotic battle of "5G phones," and its sales steadily increased.

The internet in China was abuzz with jubilation at that moment.

Major tech media outlets and social media platforms are dominated by headlines featuring Xiaomai and Lei Jun.

"Red wheat sweeps through the Indian market, bringing glory to the country!"

Lei Jun's "Are you OK?" ignites international friendship!

"A model of internet business going global: Xiaomai Technology achieves a resounding success in India!"

These kinds of headlines are constantly emerging.

At this moment, Wheat Technology is at the center of a media storm, becoming a successful benchmark for domestic companies going global, enjoying unparalleled success.

However, within the industry and among more level-headed observers, there may be more than one real winner.

Shen Yiwei and Cheng Yonghao of the Bubu Gao (步步膏) group remained oblivious to the outside noise, focusing instead on the ever-increasing channel development reports and Y1 shipment data, silently calculating profits and market share.

Their strategy was to "accumulate grain and delay declaring themselves king," not to vie for temporary fame.

Orange Technology in Shenzhen, on the other hand, remained completely uninvolved.

Chen Mo looked at the report submitted by Lin Xiaoxia and Zeng Baifang, which clearly listed the stable profits brought by Liansheng Group's parts trading and Zhicheng's centralized procurement of orange series parts.

Wheat and herbal paste products have entered the Indian market, causing the entire orange-related supply chain's revenue to surge by 30%!
Forehead.
Although Orange phones may not have entered the Indian market, a significant number of Orange Chain components have!
Meanwhile, the integration of Orange Technology's direct sales channels in the central region is also progressing steadily. Wucheng, a transportation hub connecting nine provinces, has been selected as the flagship store in the central region, and Song Kaixuan, the last "veteran" of the marketing department, is personally in charge of its development!
Watching Lei Jun talk online about pigs riding the wave of opportunity and the Indian market strategy.

Chen Mo smiled. He didn't need the spotlight; all he needed was tangible benefits and a solid industrial layout for the Orange Group.

Orange Technology, like a hidden hand, influences the Indian smartphone market through its supply chain without getting hurt in the process.

Old Wang's "5G mobile phone" empire suffered a precipitous drop in sales due to the direct impact of Redmai and the backstabbing from Blue Factory's distribution channels.

His business model, built on information asymmetry and refurbished parts, proved utterly vulnerable to the disruptive attacks from domestic smartphone manufacturers.

The warehouse is stockpiled with a large number of outdated "5G Pro Max" phones, as well as expensive but unreliable gaseous lithium batteries.

Old Wang's dream of an Indian smartphone empire, like the stagnant water during the rainy season in the Southern Hemisphere, evaporates rapidly under the scorching sun, leaving only a muddy mess.

In the end, Lao Wang mortgaged his goods and company to borrow a large sum of money. He abandoned his local Indian wife and father-in-law's family, skillfully absconded with all the cash, contacted A Bao, and fled to the Dai country!

With the demise of the "5G phone," a source of pride for Indian-made products, Redmai has taken up the mantle of "Indian-made pride."
The game in the Indian smartphone market has only just begun.

Wheat, wielding the powerful tools of internet marketing; the Bubu Gao (a traditional Chinese medicine) series, deeply rooted in offline channels; new manufacturers about to enter the market; and two hidden players behind the scenes, Pingguo, controlling the fruit supply chain, and Orange Technology, controlling the orange supply chain.
Many people may not know that nearly one-fifth of Apple's profits come from the Apple supply chain, which consists of some inconspicuous small components in mobile phones, namely the supplier companies it has acquired.

FruitChain's goal: We only possess core technologies; we are technology integrators and demonstrators!

OrangeChain's goal: We possess most of the technologies; we are the technology supplier and demonstrator!

With the Indian smartphone market being activated by "5G phones," a huge blue ocean has emerged, and the real smartphone giants will gradually enter the market.

A fierce competition for the billion-dollar smartphone market has officially begun.

The outcome of this Indian smartphone war may well determine the future landscape of the global smartphone industry.

Watching the overseas sales of wheat and blue factory surge by 30%, almost on par with the sales of blockbuster products like Orange 3.

By the end of the year, both companies will definitely be large-scale enterprises with sales exceeding 1000 million.

Chen Mo gradually came to understand what it meant to know that the Indian market was bad, but the sales volume and cost scale of the market were still there!
Your competitors are going to external markets to gain double experience and develop their strength. Can you still sit still and defend the domestic market?

This is why domestic smartphone manufacturers have no choice but to expand into the Indian market—it's disgusting!

Chen Mo naturally wouldn't let Orange Technology get involved directly, but he still had Lin Xiaxia find a distributor from India.

This is like a lottery; whether you win or not, you can try your luck with a couple of shots. There's no sunk cost involved!

Orange Technology's current profits in the Indian market mainly come from the components procured by Smart Orange's centralized supply chain, following domestic manufacturers, rather than profiting from terminal mobile phones in India!

(End of this chapter)