On April 14, Meitu Mobile released an open letter confirming the adjustment of the smartphone business. Actually, the Meitu brand is still there, but the equipment manufacturer will change from Meitu to Xiaomi, and Meitu will also produce phones and get profit in the middle.

Therefore, this should not be seen as the end of the Meitu smartphone business but should be regarded as a new beginning for Meitu and Xiaomi.

The warmth of the two dilemmas

Since the birth of Meitu smartphone in 2013, it has been favored by many stars and women who love taking selfies and use various beauty filters. The sales volume from 2013 to 2017 has been reached 1.57 million units yearly.

Compared with the total capacity of the smartphone market, the annual sales volume of 1.57 million is not that large. But for a small brand whose final transaction price in the market can be higher than the official price for a long time, this is enough.

In 2018, the Chinese smartphone market entered an unprecedented stage of change. In this year, we can see that almost all smartphone manufacturers have begun to take the selfie feature into account. Even Huawei puts powerful selfie cameras on its flagships. In such a big environment, the relative advantages of Meitu smartphones are not so obvious. Plus, some other relative factors, such as low hardware configuration, lack of offline channels, and others affect the sales volume of Meitu phones.

It is well known that a complete smartphone that arrives at the user’s hand is made up of parts of different functions, shapes, sources, and origins, which requires the brand to have very strong control over the supply chain. If the brand has a strong voice, the supply chain will operate according to your wishes, and the production will be adjusted according to your sales cycle. Moreover, the sales of the brand have also a very direct relationship between the brand and the demand for the supply chain.

Compared with other brands, the 10 million sales make the purchase volume of Meitu in the supply chain be ranked very low. So what will happen to the supply chain? Will it fall into an infinite loop, low sales – no voice – out of stock – low sales?

As for Xiaomi, it has been marginalized and almost reached the stage of life and death. As you remember, Lei Jun personally turned the tide, and Xiaomi once again returned to the domestic front line to solve the survival dilemma. Xiaomi had to face the problem of high-end brands and can’t raise the brand premium.

However, though there are many great high-end smartphones, they do not bring too much benefit to the manufacturer. The company’s revenue is still supported by the Redmi and the digital series. These all show a problem: because of the price-performance ratio, the price-sensitive users do not have brand loyalty. Xiaomi urgently needs to reopen the high-end series and change the positioning of the ‘silk’ that has been imposed on it by some rivals.

Compared with Xiaomi, which has a cost-effective route, the hardware configuration of Meitu’s smartphone has not been feverish. The official average price has been higher than that of Xiaomi. Due to the shortage of supply, the market transaction price has exceeded the official price of 300-600 yuan for a long time. Meitu has licensed its own brand with the high premium ability to Xiaomi who has a great voice in the supply chain. Xiaomi combines its strong sales and supply chain integration capabilities with the premium of Meitu brand and gains the integration experience of high-end positioning brands in the sales of Meitu to create their own high-end series.

The two brands that seem to be unrelated are coming together like this. What does it look like?

This is like a rich woman and a poor man who has tried hard to climb up to change his status. In order to live better, he chose to go together with her.

The true love story between different classes?

In life, when you hear the love story of different classes, the crowd will always find a bunch of reasons to speculate that it won’t last long. Of course, the ending of the love story is mostly consistent with the speculation of the onlookers.

In the face of the cooperation between Meitu and Xiaomi, two completely incompatible smartphone brands, do not need additional reasons to make us doubt in their future. Say, the same happened with HMD use Nokia. The former one used its authority and the latter’s trademark to manufacture and sell smartphones. Though the sales are still humble, we believe HMD will perform better in the future. Of course, Meitu’s authorization for Xiaomi is naturally different due to historical reasons. Nokia has different licenses for HMD.

In real life, we can see that the combination of different classes will bring many contradictions. Rich girls may leave because they can’t stand the lifestyle of ‘poor men’. On the contrary, in real life, we often see poor men succeeding in climbing the social class they want, abandoning the rich family and looking for their true love. Will Xiaomi use the perfect smartphone brand to obtain the high-end series of operations? After the experience, will it hide or abandon Meitu? This seems to be a problem that is emotionally unacceptable.

Of course, there are many stories about the different classes that combine the ultimate happiness. The phenomenon of mutual help between different business companies has always existed. Therefore, at the moment when Meitu and Xiaomi announced the in-depth cooperation, there will be fear and hesitation in the emotions of both sides, and more will be the illusion of a bright future.

This article originally comes from ITHome