#287 1999 · BBK Electronics (步步高, Duan Yongping) · Consumer electronicsincentive-flip
Rather than run three growing product lines as divisions that would eventually compete for the same budget and shelf space, Duan Yongping split them into fully separate companies — two of which, OPPO and vivo, are now each other's biggest rivals.
the problem
multiple promising business lines inside one company will eventually fight each other for the same resources and market position
background
By the late 1990s, BBK Electronics, founded by Duan Yongping in 1995, had grown three distinct and increasingly promising businesses under one roof: educational electronics (learning machines and point-readers), audio-visual products (VCD and DVD players), and communications equipment (cordless and early mobile phones). Each division had its own logic for growth, its own competitors, and its own claim on the company's capital and management attention — the kind of internal competition for resources that eventually forces a parent company to pick winners or impose compromises that slow all three down.
Duan's own earlier experience, having left a prior company after being denied an ownership restructuring he'd wanted for employees, shaped his belief that growth depended on incentive structures strong enough to make people behave like owners, not division managers reporting up a chain. Keeping three units as departments of one company, however they were incentivized internally, still meant they ultimately answered to one board and competed for one pool of capital.
the move
In early 1999, Duan split BBK into three independent companies — one led by Huang Yihe (education electronics), one by Chen Mingyong (audio-visual), and one by Shen Wei (communications) — each with its own ownership structure and, in the company's own description, no subordination to each other. The three shared the BBK name and roughly 80 percent of the original distribution channels at the start, but operated as genuinely separate businesses, with Duan himself retaining a minority stake, reportedly around 10 percent, across all three rather than controlling any one of them outright.
the payoff
In 2001, the audio-visual and communications companies jointly invested ¥30 million to register a new brand, OPPO, under Chen Mingyong, who later bought out the other shareholders' interest in it entirely. In June 2010, Shen Wei's communications company separately launched vivo as its own new brand, mirroring OPPO's earlier move — in both cases replacing an aging house brand with one built for younger, more international buyers. By 2016, OPPO and vivo, both smartphone makers with no ownership overlap by then, had combined quarterly shipments of roughly 39 million units, rivaling Apple's, and now openly compete against each other in the same market their shared corporate ancestor once served as three divisions.
what came after
Duan Yongping is now informally credited in Chinese business commentary as the common founder-mentor behind OPPO, vivo and other ventures descended from BBK, and the 1999 split is cited as a rare, deliberate example of a founder choosing to let sibling businesses become full competitors rather than trying to manage their rivalry from inside one corporate structure.
references
- [1]企业漫谈：步步高、OPPO、vivo到底是什么关系？格隆汇 (Gelonghui), 2022m.gelonghui.com
- [2]小霸王之父段永平:OPPO和VIVO创始人背后共同的男人新浪财经 (Sina Finance), 2018finance.sina.com.cn