Citrus bomb: realme undermines the Ukrainian electronics market

2020 has already brought so much trouble to everyone that you unwittingly expect only bad news from the news, but it seems that today

we have fundamentally different news. Today, realme officially introduced its new products on the Ukrainian market, the world premiere of which took place just a few days ago. In addition to smartphones, realme expands its presence in the TWS-headphone market (point 4 in our forecast for 2020), launches smart watches and enters the smart TV market. All this happens with aggressive (volleys come from all available barrels and calibers) advertising activity of Citrus, which made excellent bets on the promotion of this brand, organizing exclusive distribution conditions for itself. We will figure out what happened and how it will affect the Ukrainian market.

Spiraling stories: nothing is new under the moon

History always develops in a spiral: we have already seen all this, more than once, everything happens according to what is already understandable and approximately the same (at a discount on the modern digital society, the rate of change of which is sometimes scary). This path has already passed the Japanese, then Korean companies, and now the Chinese are going. This is a way to reduce prices while striving to maintain quality. Now this will sound surprising, but, for example, Panasonic’s success in the 20th century was laid down by Konosuke Matsushita, the founder of the company, whose goal was to organize the production of a product mass and affordable to millions of people. Millions also used the Sony player named Walkman, and the device changed the habits of music consumption by millions of people. In the past decade, Samsung and LG (and their fellow countrymen KIA and Hyundai in the automotive industry) went this way. What they were doing? Yes, the same thing, in essence: the same products that Sony and Panasonic are only 20% cheaper. This year marks the end of the second decade of the 21st century, and Chinese companies have already entered the arena: Huawei, DJI, Xiaomi - these names are already known all over the world, and today they are by no means synonymous with cheap low-quality goods. On the example of Xiaomi (which has already become the new Samsung) one can clearly see what helps to promote their smartphones around the world - creating their own ecosystem and entering related markets, gradually increasing expansion. Xiaomi just created a new distribution model, combining dozens of manufacturers of good equipment from China under its umbrella brand, putting them into its (primarily online) distribution channels. In general, it is distribution that is the key to success, and not at all technical specifications and price, as geeks are accustomed to consider. A simple fresh example is the Samsung Galaxy Z Flip and Motorola RAZR curved screen smartphones. The products are very similar in many respects; sales are nowhere more serious. And not because the Samsung product is much better, by no means, the value takes place on a store shelf. If it is - there will be sales anyway, if there is no product on the store shelf - sales simply have nowhere to come from.

And where is Citrus?

Being not the largest player in Ukrainianmarket, Citrus has become a serious awl in a renowned place for the entire electronics retail industry. More experiments (including bold, risky, scandalous and provocative - they tried everything decisively). More shocking and more willing to be heard. The company is constantly in search of ideas and new segments. They were the first to massively sell personal electric vehicles (supplementing it with rental points in their native resort Odessa and Kiev, where they trained and educated buyers, involving them in the use of the product and making it part of their lives). Citrus had an interesting and not very long history with the promotion of the Meizu brand, in the promotion of which a lot of effort (and money) was invested. In general, it is worth saying that for a retail company to be a distributor is very profitable - you get a margin not only wholesale, but also retail (which, as a rule, is even higher). The position of the exclusive distributor (all sales channels are tied to you) gives you additional benefits - any sale of a device officially imported into the country gives you a pretty penny even if you did not sell it at retail. It seems that realme will become a new diamond for Citrus - the stars, as they say, have converged.

Why are realme products doomed to popularity?

Everything is very simple - a key factor in salesin our market (like all poor countries that are not part of the Golden Billion sphere) - this is a low price. The price factor is a trump card that always beats in our country. Of course, this does not mean at all that buyers of the iPhone or Samsung will suddenly take it and switch to a new brand at once, not at all. But all the price segments in which realme products go are budget categories. The target audience is rightly chosen - young people, who in any circumstances are looking for new means for self-expression, and also love to do what their parents did not. This also applies to preferences in choosing brands. I have often noticed how forty-year-olds remain loyal to "Japanese" brands, while the names Sony, Panasonic (and with them - Sharp, Hitachi, Toshiba, JVC, Pioneer - there were a lot of them in the age of my youth) are empty for eighteen-year-olds as a chapter on the Stone Age from a history textbook. Lack of money (we don’t take into account the "golden youth" with new iPhones - they are not the majority) and the desire to try something new and not like their parents - this is an explosive mixture that forms the basis of the bomb. Well, and expanding the range, of course - it allows the brand to expand its presence in the lives of consumers and more often be heard (and also advertised from every smart screen iron).

Extension of the realme line today

Realme Buds Air Neo and Buds Q - TWS-headphones for 999 and 699 hryvnia. This is not at all the price of AirPods, not the price of the excellent Galaxy Buds and Huawei Freebuds. This is the price on Aliexpress (well, you can, of course, find cheaper, but the order of prices is about the same). Some are an external copy of AirPods (why reinvent the wheel, good artists, as you know, copy, and great ones steal) for those who love the plug-in design. Others - with rubber seals - for connoisseurs of in-ear headphones. Connecting to a smartphone through the application and now they can already be called “smart” with a clear conscience. No special technologies are needed.

realme watch - smart watches for 1599 hryvnias. The price is almost the same as the sensational Haylou Solar LS05 last week on Aliexpress. With the difference that you don’t have to wait a month or two until they arrive on sled snails from China (after the sales begin, of course, this will be in a couple of weeks only). Design, taken from "you know what watch." Measurement of the phases of sleep, heart rate and oxygen level in the blood. Twenty kinds of dials immediately and a promise of hundreds more in the coming months. With such data, they do not need to be the most-most technological and energy-efficient. The price does its job, and the price, backed by an aggressive advertising campaign (in these games Citrus succeeded like no other) - even more so.

realme TVs on Android TV - difficult for logistics and difficult for competitionproduct. In a box with one TV, you can bring dozens of smartphones, whose cost and profit will be hundreds of times higher. Nevertheless, TVs are still an important screen in our life, so yes - it’s worth doing to strengthen the brand. There are only two diagonals - 32 and 43 inches, the price is slightly lower than that of Xiaomi, weak technical specifications (HD panel for the younger model, have you heard about this for a long time?) We are not talking about high technologies, but, for example, buy 43 -inch Android-TV (it’s not worth buying another one now) for 7,500 hryvnias (there is an installment plan) - why not? You do not really need 4K in the kitchen, the right word. The price tag of 4399 hryvnias for the younger model looks ridiculous at all. When pre-ordering, they also give wireless headphones, albeit inexpensive, for 500 hryvnias, but in this price segment the war is fought for every hundred hryvnias, so this looks like an appropriate and advantageous offer - it’s not at all a discount the size of a full tank of gasoline for a Mercedes. In addition, developers approached the issue with a full understanding of the market situation. That is - yes, we do not have 4K, like Xiaomi, but we have a sound of 2x12 watts, and not 2x8 watts, like Xiaomi! Here you are! And you will not have every movie in 4K when you watch it, and you will feel the sound every day, that's it.

smartphone realme X3 SuperZoom - here it’s not so simple, in the price segment in12 000 hryvnias for a new player to compete will be much more difficult. This can be confirmed by OPPO, and vivo, and Samsung. In general, this segment looks like the estate of Huawei with Honor. The promise of a 60x hybrid zoom looks something like the promise of a 100x zoom on the Galaxy S20. In words and in the presentation it looks very beautiful, in practice it makes little sense. Although it is worth saying that the previous senior model realme 6 Pro looks interesting, but the brand’s fuse is not enough here - the target audience loves simpler price offers. But the company also cannot not have such a conditional “flagship” - it plays its image role on the same shelf in the store, helping (sell it really, believe the seller with considerable experience) to sell cheaper models of smartphones.

In the dry residue

Citrus can be congratulated not only on the acquisitiona successful brand into your collection / portfolio, but also with how well the ideology of realme fits in our frankly not rich (real world world premieres in India is not without reason - there is a huge audience with low income). Well-balanced products, competent expansion of the product line (TVs, power banks, TWS-headphones - these are the most popular products today in the electronics segment, except for the smartphones themselves). Here you might suddenly think that Citrus directly wants to become the “king of the hill” in the market. It's not like that at all. The company's ambitious plans in the Ukrainian market to become the third-largest brand in smartphones by the end of this year. The goal, by the way, is not simple, but it should be an ambitious goal. Citrus will have enough to have its own “candle factory”, and while the global success of realme looks much more successful than that of Meizu in its best times.

This is what I did not see at all at the presentation (althoughand did not really expect to see) - so this is the announced world of AIoT (like, artificial intelligence, combined with the Internet of things). No, of course, if you call the Internet of things any wireless device with Bluetooth today, and AI shove where you need and where you do not need, then everything is in order. But the sediment, as they say, remained. For the rest, look, if there is an extra hour of time and desire, a presentation - although it was made with a reasonable share of marketing bullet for such a case, it looks a lot more realistic and thoughtful than most of such speeches I have seen (and I saw a lot of them, to put it mildly ) A clear understanding of the audience, its specific and quite competitive advantages. And so everything will work out with realme. In any case, the fact that these new products will be popular, and will allow Citrus to earn some money (and it’s natural for customers to save money) in these difficult times for all of us.