As we draw curtains on the year 2016, we take a look at Chinese manufacturers in India, who have taken a huge pie of the handset market and are posing as a big threat to the Indian mobile manufacturers. Some of their aggressive strategy plans include roping in celebrities as their brand ambassadors, associating with big ticket events, allocating huge marketing spends and competing with each other on the back of their selfie-enabled features.
According to a Counterpoint Research report, the share of Chinese brands, including Vivo, Oppo, Gionee and others in the Indian smartphone market has grown from 21 per cent during the January-March quarter to 32 per cent at the end of the September quarter. In fact, the share of these Chinese brands has doubled from 18 per cent in 2015 as compared to 9 per cent the year before. It is also estimated that the ad spends from the Chinese makers have more than doubled this year.According to media reports, these players accounted for more than 55 per cent of the total Rs 1,200 crore smartphone advertising market in India.
Commenting on this particular trend, Hitesh Gossain, Founder & CEO of Onspon.com said, “Smartphone market is a great opportunity (especially with Samsung losing its market share owing to the issues with Note) and the segment with price range below Rs 25,000 was up for grabs - and Chinese handset manufacturers have done just that. The impact has been mixed with a media mix usage strategy. For players like Gionee using high impact events like Sunburn and LeEco using IIFA - the others have been putting focus on television engagement primarily. Vivo initiated the bit by roping in as the title sponsor of IPL thereby creating a significant traction in a very limited time.”
He further added, “Celebrity usage has been fantastic and media amplification has added to it - from Raṇveer Singh, Hrithik, Sonam to Alia Bhatt - these faces have been roped with focus on a feature - speed, selfie quality, selfie flash etc - thereby creating a clear differentiator. The messaging has been cleverly crafted - and has gained traction owing to limited spending by other players in the space - thereby adding to the growth story of Chinese counterparts.”
Below are some of the strategies adopted by the Chinese handset makers which helped them to stay ahead in the highly competitive mobile market in India.
Increased ad spends & associating with big ticket events:
In an interview with exchange4media a month back, Vivek Zhang, CMO, Vivo Mobile informed that the brand has already spent more than Rs 350 crore as their total marketing spends this year. The brand bagged the Indian Premier League (IPL) title sponsorship for two years after replacing PepsiCo and allocated Rs 200 crore only for the IPL promotions. According to reports, the player has also spent around Rs 80-100 crore during the festive season, double of what they had spent last year. Since the primary focus of the brand is to target youngsters, they have tied up with different shows recently, like ‘Yaaron Ki Baraat’ on Zee TV, ‘Voice India’ on &TV, ‘Love School’ on MTV and ‘Indian Idol’ on Sony TV.
The brand which had a market share of 3.1 per cent in the total smartphone market at the start of this year, reportedly, has now increased to 5-6 per cent by volume and 7 per cent by value. It further has plans of capturing 10 per cent market share by 2017.
According to media reports, towards the start of this year, Gionee allocated around Rs 225 crore marketing budget for this year. It has also further revealed its new identity under the 'Make Smiles' initiative and has spent more than Rs 150 crore in the new branding identity.
Again during Diwali, the company announced their plans of burning around Rs 200 crore towards marketing. Last year, it had replaced Nokia as the principal sponsor for IPL cricket team Kolkata Knight Riders (KKR) for a contract worth Rs 60 crore for three years. The brand currently has a 5 per cent market share in the country and it is targeting a share of 7-8 per cent this fiscal.
Oppo’s aggressive marketing strategy in India has been spot on with its investments on cricket – it was one of the biggest spenders in IPL -- and television entertainment which includes sponsorship on Color’s prime properties like ‘Bigg Boss’, ‘Comedy Nights’ and ‘24’. It allotted a marketing spend of Rs 140 crore, according to media reports, which even mentions its association with the International Cricket Council (ICC) as its new global partner for four years, from 2016 until 2020. Oppo has committed to pay $34 million over the next four years to ICC. The brand has gained a market share to reach 4 per cent of total smart phone share in 1Q 2016. During the festive season, the company increased their festive spends by almost double of what they had spent last year.
A month back, Chinese smartphone maker Huawei started putting in a lot of money to promote their phone Honor 8, which was launched in India on October 12. The company used a 360 degree marketing plan, including full page ads in leading national dailies, occupying visible TV ad spots to featuring at prominent places in the OOH space.
According to reports, Huawei a few months back, expressed their desire of capturing 10 per cent market share in the Indian smartphone market by the end of next year, on the back of its dual-brand strategy (Huawei and Honor) and special focus on the offline retail channel. As per one Counterpoint data, the company has till now struggled in India, having just 0.5 per cent share in the first half of this calendar year, as compared to 0.9 per cent share in the same period last year.
LeEco started the year with a bang, where the brand was spending huge amount of money in the advertising and the marketing. During IPL this year, the brand reportedly spent around 80 crore and earmarked an annual advertising budget of Rs 400 crore. The brand also got a further boost when it partnered with 2016 Bollywood IIFA awards as the official powered-by sponsor.
However according to recent reports, the company informed that it has spent more than what it could afford this year in order to get into multiple markets in the smallest amount of time. It will thus have to not only exit the offline market in India, but also reduce on the advertising spends and axe people from the India office.
Roping in Bollywood biggies as ambassadors:
Towards the start of this year, Oppo got in Bollywood actors Hrithik Roshan and Sonam Kapoor as its brand ambassadors. The brand even signed on Yuvraj Singh, as their first sports ambassador for the cricket season. The reason being, it is of the belief that by leveraging partnership with these influencers, they will get closer to the Indian customers and spread the love of taking selfies.
During the IPL season this year, Vivo launched their television advertising campaign, for which it got on board Ranveer Singh with the belief that it will enhance the communication between the brand and the target audience. Commenting on how associating with him helped the brand, Zhang from Vivo Mobiles said, “Ranveer Singh is a great guy, the reason for choosing him as the face of our brand was that his personal spirit matches the ethos of our brand, which is filled with energy, joy and youth. He is extremely fun to work with and will always deliver his best.”
Gionee, which is the principal sponsor for team KKR during IPL, had released an advertising campaign during the tournament, talking about their new logo and the entire revamp. It has also recently got in Alia Bhatt, who features in a commercial which highlights the Gionee S6s phone which comes with a front flash.
Jostling for market in the selfie segment:
These Chinese handset makers have been increasingly focusing on the camera quality of their phones and keeping the selfie-obsessed consumers in mind; they have been innovating and introducing new features around it.
Gionee smartphones aggressively has been promoting their new Gionee S6s phone, which comes with a front flash. Alia Bhatt, the brand ambassador is shown talking about the product features in the commercial.
Vivo has recently revealed their latest phone Vivo V5, which comes with the first ever 20MP moonlight selfie glow camera. This new feature helps to take perfect selfies. It is a romantic film, featuring Ranveer Singh and the girl whom he meets in Budapest.
Oppo Mobiles has also been investing to give their consumers an unforgettable camera experience. With their ambassadors Sonam Kapoor and Hrithik Roshan who are labelled as ‘selfie-experts’, the brand through their campaigns highlights the selfie-enabled feature of the phones.
On one hand, when the made-in-China players are ruling the market, the Indian brands comprising of Micromax, Lava and Intex are losing their market share. It will however, be interesting to see, if the other Chinese handset makers can keep their momentum high and continue with their increased advertising spends in the coming year as well or will they have to go the LeEco way.