139: A new round of offline store construction

Chen Chen thought for a long while before he understood what Shen Rou meant by having no front-facing camera.

Oppo had once released several phones with flip cameras that rotated the rear lens to the front, so there was technically no dedicated front camera.

Chen Chen remembered that this product should have been released in 2013, with Shen Yiren leading its development. Several more flip-camera phones of the same type were released later, but as mobile phone integration increased and market competition intensified, the series eventually faded into the long river of history.

Uh, the leader was Shen Yiren?

Now that Shen Yiren was serving as a vice president at Red Star, it was no wonder OPQO only released this phone in the first quarter of 2014; the product manager had been poached by him to Red Star.

Speaking of Oppo, the brand's innovation was truly second to none among domestic manufacturers. In the original timeline, Oppo was the first to bring fast charging to mobile phones, and the slogan "Charge for 5 minutes, talk for 2 hours" was a household name back then.

The unique design of the flip camera, the rear touch design, and the later rollable phone where the screen could unfurl like a scroll.

There were also the original pop-up camera structures and retractable lens structures, all of which were Oppo's innovations in mobile phones.

Of course, while Huawei made retractable lenses popular in China and Transsion did so in Africa, Oppo was the first to create a concept phone with it.

"Mr. Chen, twelve of our Red Star Home stores opened in January this year. Since the Spring Festival, dozens more have been under renovation and are expected to open in the first half of the year."

"I've brought a proposal for this year's store construction. Please take a look, Mr. Chen."

Taking the proposal from Zhang Jianhui, Chen Chen began to look through it carefully. In Zhang Jianhui's plan, she wanted to establish more direct-sale stores in the second half of the year and had a plan for a simultaneous opening of a hundred stores.

Chen Chen knew that the future mobile phone market would definitely rely on offline presence. Once online growth stagnated after reaching a certain share, physical stores would be needed to expand the offline market share.

Last year, Red Star had already begun the construction of direct-sale stores. In November, stores in super-first-tier cities like the Beijing and Magic Capital began operating. The next goal was first-tier and second-tier cities.

When Chen Chen first took over Red Star, the company had some offline stores, but they were small franchised outlets. Coupled with the chaos Red Star was in at the time, many franchisees had withdrawn.

Chen Chen then set about cutting more stores, leaving only a few dozen. These remaining stores began being renovated and upgraded last year into standardized direct-sale outlets.

Cooperation with distributors had also been ongoing, but the pricing of the shining series was low, and the profit margin for the Red Star Digital Series given to distributors was less than 8%. From that 8% profit, distributors had to share a portion with the phone sellers in their distribution network. Consequently, distributors mostly carried the Kunpeng series and were less willing to sell the Red Star Digital Series and the shining series.

This situation was normal; high-value-for-money phones were indeed rare offline. Offline distributors needed to make money, so high-priced models with low specs and high profit margins were their first choice.

According to Red Star's current plan, Chen Chen estimated that nearly 50 stores would be opened in the first half of this year.

Establishing an offline market presence required massive capital. Renting storefronts, renovations, and hiring staff were all costs of offline stores. However, Red Star's cash flow was very abundant now. After reading Zhang Jianhui's proposal, Chen Chen approved it with a wave of his hand.

"Manager Zhang, I plan to open more than 3,000 stores nationwide before 2016. Do you have the confidence?"

To this end, Chen Chen set a small goal for Zhang Jianhui: to have more than 3,000 Red Star direct-sale and authorized stores nationwide before 2016.

With a total investment of over a billion, spread out to about five or six hundred million per year, Red Star could fully afford this investment.

Zhang Jianhui pondered for a moment before saying, "Mr. Chen, opening over 3,000 stores in two years is exceptionally difficult. Every site selection requires our team to conduct on-site inspections. Combined with renovations and hiring, I'm afraid it will be hard to achieve."

"Unless we loosen the restrictions on offline franchisees, allow them to join Red Star's offline system, and open up our authorized stores."

"This method could save us a large portion of capital and time. Currently, Vivo is using this method for its offline store expansion."

Chen Chen was familiar with this expansion method. The offline development of Vivo and Oppo followed a branded partnership model.

The reason these two had so many stores in many remote towns and counties was primarily due to this franchised branding method.

In his previous life, Chen Chen had witnessed the spectacular sight of an entire street in a small county being filled with Vivo and Oppo stores.

These stores would hang vivo or OPQO signs on their storefronts, but they didn't just sell phones from one brand. They would sell any high-profit or popular phones, and since Vivo and Oppo models offered extremely high profits, they naturally became their primary recommendations.

This method was the best way for mobile brands to develop their offline markets. The Blue and Green duo relied on this method to eventually complete their coverage of the entire offline market before moving into online development.

Unlike them, Red Star developed online first and then moved offline, just like Xiaomi and Honor in his previous life.

Furthermore, Chen Chen didn't want to use this branding expansion method. First, Red Star didn't have the offline channels that the Blue and Green duo had during their BBK era. Second, Red Star didn't have high-profit models to offer those offline stores.

Therefore, Chen Chen wanted to adopt a franchise-authorization model, similar to the offline expansion methods of Huawei and Fruit, which involved unified renovation layouts, unified pricing, and unified channel management.

When distributors joined Red Star's offline system, their entire storefront would be the same as a Red Star direct-sale store, perhaps only differing in size. They would hang the Red Star sign, and the only difference would be that direct-sale stores were called Red Star Home, while franchised stores were called authorized stores.

"Alright, you can continue to take charge of this. The franchising and authorization can start in the second half of this year. Once CEO Lu returns from the USA, we'll hold an internal meeting."

Zhang Jianhui nodded and left Chen Chen's office. For now, the layout of Red Star's second batch of offline direct-sale stores for the first half of the year still required her attention.

Chen Chen's development plan made her feel that the burden on her shoulders was exceptionally heavy, but Zhang Jianhui didn't feel any dissatisfaction. As long as she handled the offline market well, she would be one of the most important senior executives at Red Star in the future.