IPL may Give Chinese Phone Maker More Brand-width

In What’s Happening in Retail by Elargirindia0 Comments

Oct 19 2015 : The Economic Times (Mumbai)


Vivo, with about 2% market share here, Rs 125 cr has lined up ` for marketing


For a brand that entered India last December and has an around 2% market share, the title sponsorship of the Indian Premier League could provide the much needed marketing push.Despite being a new entrant, Chinese smartphone maker Vivo has a marketing budget in excess of ` . 125 crore in India, supported by its parent who wants to make the country its second-largest market after home, two senior industry executives aware of its plans said.

As first reported by ET on Saturday, Vivo replaced PepsiCo as the title sponsor of the T20 tournament, after the beverages maker pulled out two years before its term ended, citing concerns over ethical issues and the spot-fixing scandal that rocked the IPL.

“Vivo may be one of the newest entrants in the Indian market, but it is literally burning money into brand promotion, right from outdoor hoardings to dealer level promotion,“ said the chief executive officer of a leading MNC smartphone brand which too entered India recently . “IPL can be a big gamble for them, but they are serious about scaling up distribution and sales in tandem.“

Vivo is charting a route different from what peers like Xiaomi and Motorola took in India. Firstly , while it is selling through ecommerce like most of the new entrants, Vivo is betting much more on offline retail. Its goal is to create a wide sales network in offline stores, which still account for 80% of smartphone sales in India.Brands like Xiaomi and Hua wei, and for that matter several newer entrants, are still focussing on online-only sales.

“Since its entry in India almost a year ago, Vivo’s focus has been mostly into offline distribution. It is aggressively investing and scaling up its distribution and broadening its product portfolio,“ said Counterpoint Research senior analyst Tarun Pathak.He said India is already its largest market outside China.

Its product portfolio too is different when compared to peers. Vivo is much more focussing in the . `10,000-plus smartphone segment, with its most premium handsets till now selling upwards of .`30,000. And in this, it has already caught the attention of competitors.

“Vivo is positioning itself as premium smartphone brand which may not be the price warrior as Chinese brands are conceived to be, but on as a valuefor-money proposition. Hence, it is focussing more on offline retail to show users the product, build consumer experience and in that it seems to be following a much more stronger long-term business model,“ a senior executive at a leading domestic handset maker said.

Vivo is aiming to sell two million smartphones in India this year and wants to treble that next year. So sure is it of its plans that next on the cards is an assembling plant in India which is expected to become operational this fiscal year. A unit here will not only help it localise models faster, but also offer a tax advantage allowing it to sell at competitive price, industry executives said.

An email sent to Vivo Mobile India general manager Tracy Chen on Sunday morning did not elicit any response. Back in China, market leader Xiaomi followed by Huawei and Vivo are giving tough competition to the world’s two largest smartphone makers, Apple and Samsung.


Leave a Comment