Lounge
How this smartphone brand rose to the top of the charts in India
Summary
In India’s crowded smartphone market, a focus on offline retail and a strong localization strategy can push a brand to the top, as vivo has shown. We chart the brand's growth, which has not been without controversy
You’ll rarely find this brand’s smartphones hyped up extensively. Their executives don’t engage in personality-driven popularity contests. Its social media is old-fashioned marketing and not adversarial to the competition. And it isn’t playing the specifications game in a specs-driven market like India.
And yet, as per recently released data from global market intelligence firm IDC, vivo (yes, the uncapitalized initial is deliberate) has surpassed brands like Samsung and Xiaomi for the leadership position in the Indian smartphone market with a 16.6% market-share in 2024, without taking into account sales of its subbrand iQOO, which had an additional market-share of 3.3% in 2024.
While its flagship X series (starting at ₹65,999) delivers innovation and showcases the company’s stellar camera chops, the V series (starting at ₹34,999) brings some of those features to more palatable price points. But it’s the affordable Y series (starting at ₹7,999) that makes for over 50% of shipments and the online-heavy T series (starting at ₹10,499) accounting for almost 30-35% shipments. While the majority of marketing campaigns from vivo are around the flagship series, the Y and T series are growth generators for vivo.
Offline play
According to Counterpoint Research, vivo emerged as the market leader for the first time, growing 16% YoY, aided by a robust offline network. vivo entered the Indian market in 2014—a time when the market was rapidly evolving with the rise of affordable smartphones and the entry of several Chinese players. While other brands focused on online channels, vivo (along with OPPO) recognized the importance of the offline market, establishing a strong retail presence across the country. This approach allowed vivo to reach a wider audience, particularly in smaller towns and cities where online penetration was limited. In its early years, while Samsung gave retailers a margin of about five percent, vivo offered 10 to 12%. And in multi-brand outlets, vivo often stations two salaried employees to push sales.
Over the last 10 years, the brand has strengthened its distribution network with more than 70 retail touchpoints. lt also has over 650 authorised service centres across 500+ cities, growing from 30 authorized service centres in 2015.
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Navkendar Singh, an analyst at IDC, validates vivo’s offline play. “It is imperative for the top five brands to focus on continuously supporting the offline channel partners (includes distributors/retailers), offer lucrative schemes, claim settlements, timely price correction, and stock clearance. vivo’s widespread footprint is a plus here, covering all tiers of Indian cities," he says.
In its early years, vivo smartphones didn’t receive much love from tech reviewers, but the company chugged along piggybacking on its offline distribution—and later found its product mojo as well, introducing features that resonate with consumers instead by fitting more memory, more megapixels, or more features in the package. vivo was the pioneer in integrating Hi-Fi audio chips, bezel-less displays, and in-display fingerprint scanners. And, of course, its stellar camera chops in partnership with ZEISS have propped up the vivo X series to stake a claim for the smartphone photography crown, challenging the likes of Apple, Samsung, and Google.
Made for India in India
vivo was among the first smartphone companies to embrace the government’s “Make in India" initiative—the company established its manufacturing facility in Greater Noida in 2015. Over the last 10 years, it has manufactured over 150 million smartphones locally, extending to exports. Since 2022, the cumulative value of vivo smartphones exported from India has exceeded crores. Additionally, vivo has worked extensively to localize its supply chain, partnering with over 30 Indian suppliers to source components for its smartphones. This localization strategy has helped vivo reduce assembly costs. It also focuses on customisations for the Indian market.
“It’s not about integrating a portrait mode and then improving it progressively. We didn’t stop at that. We are continuously evolving. We worked on how we can provide the best wedding photos... that’s very important for Indians," says a vivo spokesperson. Then there’s the camera add-ons powered by ZEISS. While other smartphones compete in clicking the best photos or packing in a solid camera unit, vivo X and V series smartphones offer a slew of customisations to personalize one’s shots, whether it’s the type of bokeh, or the colours and tone. When I reviewed the vivo X200 Pro recently, I made it my primary snapper instead of my Google Pixel 9 Pro because the former made photography so much fun.
“vivo, though being a Chinese brand, hasn’t just acquired products from there to India. Of course, fundamentals remain the same, but it has emphasized a lot on adding locally relevant and meaningful features through extensive customer understanding, which has naturalized its products in India," Faisal Kawoosa, chief analyst and co-founder at TechArc, explains.
The speed bumps
vivo’s journey in India has not been without its challenges. The company has faced scrutiny from regulatory authorities, particularly the Enforcement Directorate, over alleged money laundering violations. In 2022, the company was accused of remitting large sums of money outside India to avoid paying taxes. vivo India’s interim CEO Hong Xuquan too was held on charges of money laundering (but was subsequently released on bail by the Delhi High Court). Last year, the ED filed a supplementary chargesheet against vivo China. The company was accused of concealing its relationship with vivo India by distancing itself on paper while continuing to control the supply chain. The complexity of the charges aside, oddly, all CEOs of vivo India—foreign nationals (not unusual for Asian brands in India)—have had very short stints. There’s Ye Liao (2014), Alex Feng (2015), Kent Cheng (2016), Jerome Chen (2019), and Hong Xuquan (2021). Right now, Jerome Chen leads the company’s India operations. “While an ED investigation does jitter the confidence of partners to some extent, in the past, we have seen that such issues haven’t had a major impact on business performance," Faisal Kawoosa clarifies. That said, per a Delhi-based retailer, post the ED raids, vivo has reduced the margins to retailers significantly, and cut back on distributor frills like foreign trips.
Sustaining the momentum
vivo invests heavily in offline displays and other above-the-line marketing channels, has had A-listers like Ranveer Singh, Aamir Khan, and Virat Kohli as its brand ambassadors, and worked out prominent presence at marquee sports events like the title sponsorship of IPL, sponsorship of the FIFA World Cup, partnership with UEFA EURO, et al. All this outreach gives the brand significant eyeballs and makes a difference to offline customers in India.
Last year, we saw the rise of a long tail of brands, which started as online heavy brands and will compete with vivo to capture the pie of market in the offline space as well. Therefore, controlling overall ASPs (average selling prices) in a challenging economic scenario—high inflation, reducing spends, and unemployment—will be the key for winning in 2025 as well.
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