1, R&D fee. Vivo invests heavily in research and development every year, mainly for the design and development of new products and the innovation of new technologies. R&D expenses account for a large part of the total expenses.
2. Procurement cost. The purchase cost of CPU, memory, screen, camera and other core components of mobile phones and other peripheral accessories accounts for a large proportion of the total cost. Vivo needs to purchase the world's advanced mobile phone components to ensure product performance, which also pushes up the procurement cost.
3. Labor costs. Vivo has 26,000 employees around the world, and labor costs and management costs account for a certain proportion of the total costs. In particular, the salaries of sales staff and after-sales technicians will bring great cost pressure to vivo.
4. Marketing expenses. Vivo invests a lot in marketing promotion every year, mainly for advertising, sponsorship activities, channel construction and so on. Marketing expenses account for a large proportion in the total cost structure of vivo, which is also at a high level compared with competitors. This is also one of the important reasons for the high price of its products.
5. Manufacturing cost. Vivo's two mobile phone manufacturing bases are located in Dongguan and Changsha respectively, and the manufacturing cost including the body and circuit board also accounts for a certain proportion of the total cost. With the improvement of automatic production level, the manufacturing cost of unit product is decreasing year by year.