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Right Price Positioning: Gionee's game plan for India

Right Price Positioning: Gionee's game plan for India

Author | Gunjan Verma | Wednesday, Jun 25,2014 7:59 AM

Right Price Positioning: Gionee's game plan for India

With about 22 smartphone companies in the country and 207 million new smartphone users, India is set to overtake the US by end of 2014 as per IDC report. The figures say depict that it is a cluttered market and it might be difficult for a new entrant to earn a market share for the same; though Gionee believes that it is easy and because the market is clearly divided between the MNC players and the domestic players and price and pride, they were able to carve a niche space for themselves to play with their strategy of RPP – Right Price Positioning.

Commenting the RPP strategy, Arvind R Vohra, Head, Gionee India said, “60 per cent of the market is with MNC players and about 40 per cent of the market is with the domestic players. These two markets are water tight; people do not move from Samsung to a Micromax because of pride and from Micromax to Samsung because of price. Here came Gionee, where we had put ourselves at a premium of 10 per cent of the domestic brands and put ourselves at a price of 60 per cent of the international brands. So a guy who moves from domestic brand to Gionee or a guy moves from international brand to Gionee, both will be in advantage. A guy moving from domestic brand to Gionee would be happy as he will own an international brand at a 40 per cent less price than other international brands and the other way also.”

Gionee was clear right from the time it entered India that it will not get sub-optimal products to India. Gionee started operations in India in March 2013 and by the beginning of 2014, Gionee has been able to establish itself with sales of Rs 500 crore and a market size of almost 3 per cent in the smartphone category as per industry analytics. It is currently selling approximately 7000 phones per day with an ASP of 5700 on an average.  Gionee left no stone unturned in making itself visible to all the prospective customers. Apart from television commercials and regular print ads, the brand has also partnered with talked about events like Khatron Ke Khiladi, Jhalak Dikhla Ja, GIMA Awards, GUILD Awards and is also the associate sponsor for FIFA on the digital platform.

But how is the brand fighting the stiff competition with Samsung and Apple? Vohra replies, “The Indian market is currently witnessing two categories, one being the established high-end smartphones with great features and high prices, and the other category is of low price smartphones with compromised quality. We see our sales offering the best of both the worlds and capturing the market with great product at great pricing. We will be able to garner market share from both these categories and attain customer loyalty while creating a segment of our own. This gives us an edge over any other competition brand.”

According to research firm IDC, smartphone sales in India are expected to reach 80.57 million units by the end of this year; also, the sales would continue to grow at a CAGR of about 40 per cent over the next five years. Every phone company wants a share of this growth and is trying its best for some share of customers’ pocket. Samsung maintains its leadership in the smartphone market with 35 per cent market share in Q1 2014, followed by Micromax at 15 per cent, Karbonn at 10 per cent, LAVA at 6 per cent and Nokia at 4 per cent. The game is becoming interesting with new entrants eating up market shares slowly to reach the neck of the market leaders.

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