vivo: Deep Dive into the Success Code of a 30-Year Leader in China's Mobile Phone Market

vivo: Deep Dive into the Success Code of a 30-Year Leader in China's Mobile Phone MarketBy the end of October last year, reports from authoritative research institutions showed that vivo topped the Chinese mobile phone sales charts in Q3 2024, maintaining its leading market share for the first three quarters of the year and highly likely to remain the domestic market leader for the full year. Against the backdrop of a sluggish consumer market, industry downturn, and increasingly fierce competition in the domestic market over the past few years, vivo achieved a breakthrough in its high-end product segment, experiencing counter-cyclical growth and consistently maintaining its top position in the domestic market

vivo: Deep Dive into the Success Code of a 30-Year Leader in China's Mobile Phone Market

By the end of October last year, reports from authoritative research institutions showed that vivo topped the Chinese mobile phone sales charts in Q3 2024, maintaining its leading market share for the first three quarters of the year and highly likely to remain the domestic market leader for the full year. Against the backdrop of a sluggish consumer market, industry downturn, and increasingly fierce competition in the domestic market over the past few years, vivo achieved a breakthrough in its high-end product segment, experiencing counter-cyclical growth and consistently maintaining its top position in the domestic market. It also secured a place among the global top 5 phone vendors a remarkable achievement. As a high-tech company established thirty years ago, vivo's development trajectory hasn't been one of dramatic highs and lows; instead, it has steadily progressed through product strength and reputation, navigating multiple market cycles in the highly competitive mobile phone industry. Its simple "integrity" culture has set a benchmark for domestic mobile phone manufacturers, and its years of accumulated successful experience and methodology have attracted widespread attention.

I. Begin with the End in Mind: A User Pain Point-Oriented Strategic Core

In the bustling mobile phone industry, vivo maintains a low-key and pragmatic image, eschewing verbal battles and avoiding blind pursuit of fleeting trends. Prominent tech strategy expert Zhou Zhanggui believes that vivo's "integrity" culture stems from a calm mindset of "acting from the heart," translates into "diligently laying the groundwork," is implemented through "user-oriented innovation" in scientific management, and ultimately achieves sustainable development with a "flying geese formation" approach, maintaining a perpetual engine-like evolutionary momentum.

This philosophy and operating model are deeply integrated into vivo's closed-loop system encompassing operations management, technological innovation, and industry cooperation, with all elements working in concert to generate sustainable internal momentum. As a typical representative of Chinese manufacturing and technology's progress toward globalization and high-end markets, vivo's core competitiveness in the intensely competitive mobile phone industry lies in its user orientation and long-term investment in the market.

While user orientation isn't unique to vivo, the company's positioning of it as a core competitive advantage showcases its distinctive differentiation. vivo possesses a deep understanding and insight into user needs, based on years of accumulated user data and frequent market research. vivo emphasizes that user orientation is pain point orientation, adopting a "begin with the end in mind" user experience philosophy, emphasizing "one brain, two hearts" the "user brain," "empathy," and "product heart."

vivo Founder and CEO Shen Wei has repeatedly emphasized that "the user is the direction," while COO Hu Baishan explains it as "high-intensity connection with consumers determining the ultimate value and long-term development potential of a phone," both highlighting the importance of the "user brain." "Empathy" involves analyzing users' "points of interest" based on their functional needs when purchasing a phone; "product heart" means fully unleashing functional value and affordability in products at all levels. From widely circulated advertising slogans like "Thin, moving the heartstrings" to "Clear even in backlight, illuminating your beauty," vivo demonstrates its precise grasp of user needs and effective responses, receiving positive market feedback.

User orientation has also given rise to vivo's "product engineering" and "technology application" methodologies. The "vivo product engineering methodology" focuses on the professional, technical, and engineering aspects, emphasizing "design-driven" principles, respecting instinct and intuition, and believing that needs originate from life, scenarios, and psychological requirements. The "vivo technology application" methodology focuses on the focusing, amplification, and expansion of "needle-point technologies," arguing that good technology requires star scenarios, and star scenarios facilitate user communication. vivo believes that products without unique, extreme scenarios are deficient, and that all decisions and product directions should return to user orientation, understanding the various scenarios of the target users, including usage scenarios, purchasing scenarios, and life scenarios, to guide various product lines and development paths. For example, the advertising slogan for the vivo X100 and X200 flagships, "200 million pixel long-focus ultra-clear, even the mountaintop is VIP," precisely targets the extreme scenario of the resurgence of the performance market post-pandemic. The product's launch immediately led industry innovation and achieved market success.

II. R&D Reigns Supreme: A Strategy of Fewer Bets, but Big Bets on Innovation

Innovation is the cornerstone of enterprise development. In the mobile phone industry, continuous attention to basic technological research and development and cutting-edge technological innovation is key to measuring core strength. Zhou Zhanggui believes that vivo has a clear and systematic answer: utilizing "Blue Technology" to build foundational R&D capabilities to support cutting-edge innovations and employing a "long-track" approach to secure directions with long-term technological competitiveness.

vivo's "Blue Technology" aims for "deep digging," encompassing five key foundational R&D areas: Blue Crystal chip technology stack, Blue Sea battery life system, Blue Heart large model, Blue River operating system, and Blue Map imaging. The importance of chip technology is self-evident, while imaging, operating systems, and battery life directly impact user experience and are key to building brand differentiation, and large models are undoubtedly an important future direction for smartphones. "Blue Technology" precisely targets current and future foundational technological R&D directions, aiming to create an integrated, one-stop solution for smartphone hardware, software, and services, reflecting vivo's "R&D reigns supreme" strategic intent and ensuring that fundamental R&D capabilities can support cutting-edge technological innovation.

Compared to the R&D perspective of "Blue Technology," vivo's "long-track" strategy aims for "accurate investment," with a stronger strategic and innovative perspective. The "long-track" aims to concentrate resources and user needs for long-term investment. Internal vivo documents repeatedly emphasize the importance of sustainable investment and the "long-track technology" business cycle, rejecting short-term technological temptations and building long-track reserves. These four long tracks are currently defined as: design, imaging, operating system, and performance.

Zhou Zhanggui's article, "Why Does the 'Few Bets' vivo Excel at 'Big Bets'?" explores vivo's strategy of "fewer bets" and "big bets." vivo doesn't just pay lip service to this; it's based on high-frequency in-depth research and verification, with management conducting thorough discussions and communication to avoid reckless advancement, ensuring strategic focus and efficient tactical execution.

The logic behind "big bets" lies in vivo's "coupling thinking" and "technology compound interest" philosophy. The former requires technological R&D to cater to multiple needs; only technology control points that achieve "strong coupling" can warrant "big bets." For example, vivo has invested over a thousand senior engineers in imaging R&D and nearly 3 billion RMB in the development of the AI Blue Heart large model. These are all points of coupling between user needs, hardware trends, software iteration, and scenario applications, with "big bets" delivering significant ecological generalization effects. Therefore, vivo makes firm investments in important fundamental R&D, ensuring that these investments align closely with product user experience needs.

III. Collaborative Win-Win: The Eco-Creation of "Faster Alone, Further Together"

Excellent companies ensure their own success; great companies enable the success of many others. The mobile phone industry has a high degree of refined division of labor. In addition to excelling in self-research, mobile phone manufacturers achieve win-win outcomes through extensive cooperation, fostering the prosperity of the industry ecosystem and contributing to the long-term success of businesses.

Shen Wei has repeatedly emphasized "always maintaining a heart of altruism," believing that ecosystem construction should be "unassuming" and "seek peers," creating "true satisfaction" for users through "user-oriented innovation." Internal vivo documents also emphasize "four happy" outcomes, aiming for the satisfaction of users, employees, shareholders, and partners. Even when "betting" on certain opportunities or trends, collaboration with partners is pursued, signifying "eco-creation."

vivo emphasizes "eco-creation" and "pursuing shared joy," rather than lone-wolf tactics or individual heroism. vivo chooses self-research in areas of expertise, seeking partners who are "most culturally and philosophically aligned, and willing to walk the long road together," achieving success through collaborative win-win strategies. Currently, over a quarter of vivo's partners have collaborated for more than ten years, and its payment terms are among the best in the domestic mobile phone industry.

With the strengthening of domestic supply chains, vivo is playing a leading role, enabling more domestic supply chain companies to participate and improving their capabilities through joint R&D. For example, in 2018, vivo collaborated with Goodix to launch the world's first mass-produced full-screen phone with in-display fingerprint technology. In 2024, they continued their collaboration on ultrasonic fingerprint technology, which has now become a standard feature for flagship models. In the imaging field, vivo's partnership with Zeiss has significantly improved smartphone image quality. Vivo states that the next generation of imaging V-series and gaming Q-series chips will involve in-depth cooperation with domestic IC design companies. This collaborative eco-system approach enhances the company's own competitiveness and accelerates the overall innovation capabilities of the industry.

Zhou Zhanggui summarizes this vivo