Growth of realme: From an Underdog to a Market Challenger

Growth of realme: From an Underdog to a Market Challenger
Case Code: BSTR672
Case Length: 14 Pages
Period: 2018-2023
Pub Date: 2024
Teaching Note: Available
 Price: Rs.400
Organization : realme
Industry :
Countries : China
Themes: Brand Strategy, Brand Differentiation, Global Strategy,International Marketing
Growth of realme: From an Underdog to a Market Challenger
Abstract Case Intro 1 Case Intro 2 Excerpts

Abstract

The case discusses the rise of Chinese smartphone brand realme from an underdog to one of the leading players in the global smartphone market through innovative and affordable product offerings, an efficient distribution model, and robust marketing. Within five years of its inception, realme emerged as one of the world’s fastest-growing smartphone brands having reached 100 million smartphone shipments in Q2 2021. Having entered close to 61 global markets, it emerged as an able challenger to market leaders such as Samsung and Xiaomi in some key global markets such as India, Africa, Australia, the Middle East and Southeast Asia.

As of February 2022, realme ranked in the TOP 5 in 30 global smartphone markets. It attracted price-conscious Gen Z customers with its high-spec, low-cost smartphones and AI of Things (AIoT) products such as smart audio, visual, and lifestyle products. Driven by its motto “Dare to leap”, realme provided an outstanding user experience across various smartphone categories, focused on innovation, and top-notch performance.

The case highlights the light asset and short channel business model for which realme opted. The focus was on online distribution rather than on building large-scale physical outlets, while also shortening the number of steps it took for products to get to consumers. However, with macro-economic challenges intensifying and larger rivals to compete against, realme could have a tough time sustaining its growth in the global markets. Global smartphone shipments declined by 9% YoY to reach 268 million units in Q2 2023 due to rising inflation and global supply chain disruptions. Realme shipped 10.1 million units in Q2 2023, up 23.2% from 8.2 million in the first quarter of this year, but still down 24.6%.

Going forward, the challenges before Sky Li (Li), founder and CEO of realme, would be to sustain low prices of its devices, make profits, continue the pace of innovation, and maintain the brand’s position in an overly competitive and saturated global smartphone market. The case questions whether Li would be able to return the company to its normal pace of growth in both local as well as global markets, attract customers, and continue to be at the forefront of innovation.

Issues

The case is structured to achieve the following teaching objectives:

  • Analyse the international expansion strategy of a smartphone brand
  • Study the characteristics of an underdog brand
  • Recognize the traits of a challenger brand
  • Identify the issues and challenges faced by a Chinese smartphone brand in its key growth markets.
  • Chalk out a future growth strategy for realme for it to sustain its position in the competitive global smartphone market.

Contents

Keywords

ElecUnderdog; Brand Management; Market Leader; Challenger Brand; Globalization Strategy ; Brand Leadership; Competitive Strategy ; Business Model; International management;

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