Chinese computer-peripherals firm Shenzhen Rapoo Technology (Rapoo) is penetrating the growing local Internet Café (iCafé) sector to secure a dominant position in the market.
The iCafé business is a growing industry here, according to Rapoo Philippines Retail Sales Manager Lem Estiva.
“A lot of well-known i Cafes, like The Net.Com (TNC) and WarGods, have started expanding and actually franchising,” Estiva told the BusinessMirror on the sidelines of the company’s gaming peripherals launching in early April. “So it’s really a growing business.”
He said the growth prompted the firm to introduce its gaming peripherals in Manila. He added the series of gaming peripherals they brought into the local market are categorically divided for two types of markets: retail and iCafés.
“We have entry-level gaming peripherals targetting basically the iCafés for that,” Estiva said. “Meanwhile, the midrange and high-end level —that would be for personal use—target the retail market.”
A little late
ESTIVA disclosed they tried to reach out to some of the big local iCafés, including TNC and Mineski Corp. for possible partnerships. However, Estiva said they were a little bit too late.
“We’ve been communicating with them, I guess for the last several months,” he said.
Estiva added there was discussion before at the possibility of Rapoo being an original equipment manufacturer for TNC.
“We provide them the products and have them rebrand it,” Estiva said. “Apparently, we came in a little too late.” Estiva, however, said they are “very hopeful” they can “eventually find other partners”. The Rapoo executive said they are also planning to form their own local eSports team before the year ends.
“That’s one of our plans this year. I have quite a number of [team] names in my head,” Estiva said. “But I’m keeping them a secret.”
Since 2014 Rapoo has been signing with teams and athletes, mostly from China, in various eSports titles, including “League of Legends” and “Dota 2”.
Estiva said some of the iCafé operators already have First-Person Shooter and Dota 2 teams.
“Usually they discuss with sponsors during the last quarter of the year about partnerships,” he said. “And we just came in the second quarter of this year.” Estiva said he expects the sponsorship by Rapoo starts next year.
Peripherals
Rapoo, which has market capitalization of $1.1 billion, began selling in the Philippines a series of wireless mice and keyboards in 2013.
Last month the company has brought into the country its gaming peripheral series under a subbrand called “VPRO”.
It is selling two gaming headphone models, which costs P1,515 and P2,945 each. Rapoo has four models of mice to cater to Filipino gamers with prices ranging from P1,245 to P2,190. Three of the four models are for entry-level users that are designed for ambidextrous gamers.
For its gaming keyboard series, Rapoo VPRO brought nine different models in the Philippine market with prices ranging at a low of P1,265 and P6,730.
Different league
ACCORDING to Estiva, the company has an edge against competitors because of its pricing structure. “There are competitors, but we are on a different league. Some of them would be very expensive and for a new brand in the local market, we must have something different to offer on the table,” he said.
Estiva said Rapoo is “very comparable in terms of design and durability with a very popular [brand].”
“But it’s competitor’s product expensive,” he said. “So we come up with something similar but with an affordable price.”
Estiva said Rappoo offers customers a direct product replacement if the products bought were deemed defective within its one-year warranty period.
Estiva said Rapoo has its own dedicated research and development (R&D) team to ensure their products are of high quality—a way to defy the common Filipino notion that China-made products are substandard ones.
“That’s why we have an R&D team to check all the products, because we know the reputation [here] of made in China products,” he said. “And because we are competing with other brands who have been in the business for years, we are not going to grow, or worse, we are going to die if we don’t actually provide very good products to the public.”
Estiva said Rapoo aims to have its brand to be known as “something that would live for a long life”.
Top three
AT present Rapoo has two authorized distributors of its products in the Philippines: Techtron Systems Corp. and Philteq Enterprise Inc., according to Estiva. He said a third distributor is currently out of the question, as it could affect the retail price of Rapoo products in the market.
“Probably the two distributors are enough. Because in the case of Techtron, they handle pretty much the bigger types of resellers and then Philteq would handle the growing ones or those in the mobile business,” he said.
“So, I think we have pretty much a good balance with those two distributors. Having three would probably create a price war with the resellers,” he added.
Rapoo Regional Sales Director Johnson Zhang said Rapoo is top three in the Philippine market, traling behind Taiwan-based firm A4Tech Co. Ltd. and Swiss company Logitech International SA. “We are trying our best to get more market share in the market,” Zhang told the BusinessMirror.
Rapoo Philippines Country Manager Aileen Chua said the company’s revenue from the local market grew by 30 percent in 2016 from 2015. However, Chua did not disclose the company’s top line in the previous fiscal year.
Plans
Even with a 30-percent growth, Chua said she sees Rapoo could still perform better in the country, as much of their sales operations are focused in Luzon, particularly in Metro Manila.
“We feel that we have penetrated Metro Manila well. However for provincial [operations], we are kind of poor in that aspect, because we don’t have the dedicated manpower assigned in those areas of the Visayas and Mindanao,” she said. “Hopefully, this year we could put up some people there who can help us promote the brand.”
Zhang said the Philippines stands out compared to other countries in the Asia-Pacific region where Rapoo distributes its products.
“The Philippines is performing quite good compared to most of the countries [where Rapoo is]. It performed very well,” Zhang said. “I think it’s because we have a very strong local team, and because of our quality products and cost-effective performance.”
Estiva added the Philippines is better than other countries where Rapoo distributes its products in terms of sales target, revenue and market visibility.
Zhang said Rapoo is currently developing its first wireless mechanical keyboard to be at par with other competitors. He said the company plans to launch it by the end of the year.
“A lot of other brands are developing wireless gaming [peripherals], so we are also developing the same.”
Estiva added the firm also plans to introduce in the country its product line for unmanned aerial vehicles or commonly known as a “drone”. According to him, the company has already introduced its drone called “Xiro” in the world market.
