Chinese smartphone brands ride on Bollywood, cricket to grow market share

Chinese smartphone makers to spend Rs1,300 - Rs1,400 crore this year to expand in India


Analysts believe that Chinese brands will continue to grow as they set new manufacturing units and expand retail presence.
Analysts believe that Chinese brands will continue to grow as they set new manufacturing units and expand retail presence.

New Delhi: Chinese mobile phone brands have latched on to Bollywood and cricket to corner more than 50% share of the Indian handset market. While product launches and retail expansion contribute to these companies’ success, their aggressive advertising and tactful sponsorships of youth oriented properties have further fuelled their popularity.

Brands such as Oppo, Vivo and Gionee are spending heavily on above-the-line (ATL) marketing activities. Media buyers estimate their individual annual marketing budgets to be around Rs200 – 300 crore each. However, Gionee is expected to splurge Rs500 crore on marketing in 2017. Earlier this week it appointed Virat Kohli as its brand ambassador after bringing Alia Bhatt

(click here) on board last year. Vivo signed up Ranveer Singh (click here) while Oppo has brought in cricketer Yuvraj Singh who joins forces with existing brand ambassadors Hrithik Roshan and Sonam Kapoor (click here).

The Chinese handsets makers have been pumping advertising money across television, print, outdoor and digital, targeting young consumers. “All these brands collectively spent close to Rs800-900 crore last year. I believe Vivo and Oppo will be increasing their budgets by at least 50% taking the overall spends to Rs1,300 - Rs1,400 crore this year. Apart from cricket and Bollywood, I foresee a number of brand associations with English entertainment shows as well as a chunk of their budget going into digital advertising,” said Basabdatta Chowdhury, national chief operating officer (COO), Starcom India, a Publicis Groupe-owned media buying firm.

Surely, the advertising blitzkrieg has been rewarding.

“This is the first time Chinese brands have together crossed 50% market share in smartphone segment resulting in Indian brands combined share to drop below 20%. This is from the peak of over 40% market share for Indian brands earlier this year. Indian brands failed to refresh their portfolios in mid segment and missed the market trend of growing ASP (average selling price) during festive sales. There will also be significant pressure on Samsung to protect its market share (which stands at 21%) from the onslaught of Chinese brands in 2017,” said Pavel Naiya, an analyst at Counterpoint Technology Market Research.

The Indian smartphone market crossed Rs80,000 crore mark by value in 2016, according to Counterpoint.

Besides celebrity ambassadors, a tactful combination of sponsorships of cricket and entertainment (music, movies and reality shows) properties has also enhanced the recall and visibility among the target consumers. Vivo, which targets consumers between 18 and 35 years, bagged Indian Premier League (IPL)’s sponsorship for two seasons—2016 and 2017. It has also tied up with music talent shows on Hindi general entertainment channels (GEC)s such as Zee and Sony.

“Vivo was one of the most recalled brands during IPL 2016. Our association helped us garner more customer engagement through various activities such as multiple city tours, setting up fan parks in 34 cities that do not host IPL matches, and gaming platform Vivo PowerPlay which allowed users to do real-time prediction were other such initiatives undertaken by us,” said Vivek Zhang, chief marketing officer, Vivo India.

Currently, the brand is present in more than 400 cities in 22 states with over 33,000 outlets across the country.

Meanwhile, Oppo has been associated with Colors’ reality show Bigg Boss Season 10 and Star World’s celebrity chat show Koffee with Karan. “All these have given us a great platform and an opportunity to connect with our audiences in the Indian market,” said Will Yang, brand director, Oppo India.

Gionee, which has clocked consolidated revenue Rs9,710 crore between 2013 and 2016, is a sponsor of IPL’s cricket team Kolkata Knight Riders and Pro Kabaddi League. Last year, it also sponsored Bollywood movies such as Dear Zindagi as well as the popular music festival Sunburn.

“Gionee will be establishing 500 brand stores in India along with doubling the strength of its retail representatives to 20, 000,” said Arvind Vohra, country chief executive and managing director, Gionee India.

Analysts believe that Chinese brands will continue to grow as they set new manufacturing units and expand retail presence. In 2017, it will be an uphill task for the Indian brands to compete with the Chinese brands, said Naiya. “If Indian brands have to grow at the expense of Chinese brands, then they will have to compete with an effective portfolio in the important Rs8,000—30,000 price segment where they are mostly absent,” he added.

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