What is the gray market?
The gray market for cell phones is not illegal, but it affects the smartphone industry in Mexico, because these are products purchased in other countries without undergoing evaluation and permission from the manufacturing companies.
Within Mexico it has found a place, because users buy products through marketplaces, where they do not necessarily go through a review and approval by local offices.
This type of equipment can arrive directly from a marketplace seller to users, so they are not reviewed or suitable for the Mexican market. This can even mean a physical risk, since they are more prone to discharges or battery problems that can eventually cause accidents.
The two main cell phone companies that have already initiated action against this type of market are Motorola, which decided to block the devices, and Samsung, which sent a notification to its users to inform them that their phones come from the gray market.
Morones highlighted that Oppo has not currently been so affected by this type of market, since its strategy is based on selling to specific distributors and not to other smaller ones that could market their products through marketplaces.
According to data from The Competitive Intelligence Unit (The CIU), for the second quarter of 2021 Oppo had a Mexican market share of only 1%. However, by the end of 2022, the company already had a 12.6% share of the global market, according to Counterpoint.
Currently, Oppo is already the third brand in Mexico with the largest market share, in addition to having increased its sales by more than 70% year over year, while its A17 device was the fourth best-selling phone in the country.
Morones told Expansión that “the results have been better than expected” since the company arrived three years ago and its strategy has been based on expanding brand recognition while expanding its product portfolio “to be number one in a couple of years.”