You may have heard about the popularity of Chinese smartphone brands like Vivo and Oppo, but are you familiar with the name “BBK Electronics?”
Duan Yongping, the company’s secretive billionaire founder, is sometimes referred to as the “godfather” of China’s smartphone industry and is, in one way or another, behind the mobile phone brands Vivo, Oppo, OnePlus and Realme. Together, these brands sold more than 250 million mobile handsets last year — more than Apple, Huawei or Xiaomi. Only Samsung, the global leader, sells more smartphones.
Duan got his start in the early 1990s producing a cheap competitor to a Nintendo gaming console, and in 1995, he started BBK, which sold a range of electronics products, including DVD and MP3 players.
In 1999, BBK was restructured into three separate companies, run by his protegees: Chen Mingyong, Huang Yihe Miao and Shen Wei, two of whom later established Oppo and Vivo.
According to corporate filings, Oppo owns Realme and OnePlus, and BBK owns Vivo. (Although press reports claim that all four brands are subsidiaries of BBK, The Wire found that only Vivo is owned directly by BBK.) Both parent companies are ultimately held by offshore shell companies whose owners cannot be identified.
While Duan keeps a low profile, here’s what we do know. Over the years, he has invested in Apple as well as Chinese internet startups like NetEase, and he mentored Pinduoduo founder Colin Huang. In 2006, Duan invited Huang to lunch with Warren Buffett, after submitting the winning, $620,000 bid that the Oracle of Omaha set up to raise money for charities.
The Hurun China Rich List estimated Duan’s wealth at $1.6 billion in 2019.
There are rumors that Duan “could still hold some minor shares in Oppo and Vivo today,” Flora Tang, a research analyst at Counterpoint Research, a firm that tracks smartphone makers, told The Wire. But since none of the companies are public, she wrote, the information is difficult to verify.
Legally, BBK is not Oppo’s parent, according to Tang, but because of Duan’s involvement in the company in its early days, “Duan and BBK’s spirit surely have an influence” on Oppo’s corporate culture and management.
In 2017, Duan granted a rare interview to Bloomberg News, in which he said that he and his protege, Tony (Mingyong) Chen, created Oppo in 2005 separately from BBK. BBK itself spawned Vivo in 2009, led by Shen Wei.
Today Duan lives with his family in Silicon Valley, and no longer occupies a management position in BBK, according to Bloomberg News. But the smartphone businesses he inspired now rank second in global market share and continue to expand.
In China, Vivo and Oppo had a combined market share of 35 percent in the first quarter of this year, just behind leader Huawei’s 39 percent. They are also gaining in India, which is the world’s second largest smartphone market. Vivo, Oppo, and Realme phones top the rankings of smartphone shipments there, with a combined 43 percent in 2020, according to first quarter figures compiled by Counterpoint Research.
The brands have also begun to offer new services and applications to help strengthen their market position. For instance, Oppo, Vivo and other Chinese smartphone brands are turning to consumer lending and other financial services. In March, Oppo launched a financial services app called Oppo Kash. Realme and Xiaomi unveiled similar apps last year. India’s revisions to its foreign direct investment rules in April could have a dampening effect on some of these services, Reuters reports.
Vivo, Oppo and Realme phones compete globally by offering products at a fraction of the price of their American and Korean peers.
Vivo and Oppo phones are usually priced between $100 and $500. Still, the phones manage to include innovative features. Vivo, for example, was the first company to introduce a phone with a fingerprint sensor underneath the display as a standard feature. Vivo also recently launched a new sub-brand called iQOO, which is geared towards gaming phones.
Realme is a newer offshoot, founded in 2018 by former Oppo vice president Sky Li Bingzhong. The company has grown rapidly. In the third quarter of 2019, the company shipments of handsets grew by more than 800 percent from the same period a year earlier. Its phones, which are priced between $100 and $250 apiece, claim to have premium camera features, such as a quad camera and pop-up selfie.
OnePlus, the only one of the brands currently sold in the U.S., is a premium priced brand intended to compete directly with Apple and Samsung. Its latest flagship product, the OnePlus 8, starts at $699. OnePlus, founded by former Oppo vice president Peter Lau, has gained market share, particularly in India, according to Counterpoint Research.
Emma Bingham is a Boston-based editor for The Wire. Previously, she was editor in chief of The Tech at the Massachusetts Institute of Technology. @emmapbingham
Kara Greenberg is an editor at The Wire. @karagreenberg_