Updated: July 6, 2019 5:19:47 pm
Vivo’s strategy of focusing on offline retail has worked well so far. Even in Q1 2019, the Chinese smartphone brand which entered India five years ago, managed to capture the third slot by doubling its shipments, according to market research firm IDC. But Vivo now wants to lure new online audiences with the Z-series.
“The online-focused consumer believes that it is best if she buys online because she understands the device very well. That’s one segment of consumer we were not targeting and not giving the right offerings to,” Nipun Marya, director brand strategy, Vivo India, told indianexpress.com in an interview on the sidelines of the launch of Z1 Pro.
He said the company started working on the online-focused Z-series six months ago. For Z1 Pro, Vivo looked at those features which it thought the consumer will care about like performance, battery, camera quality, etc. From the colour selection to the ID and specifications, Marya says the company has done extensive research. Flipkart, which is the exclusive online partner to sell the Z1 Pro, also gave a lot of valuable inputs in understanding the behaviour of online consumers, he said.
Marya understands that the user who buys a phone from the e-commerce platform behaves differently from a consumer who likes to buy the device from the store. He describes the online consumer as someone who knows about the product very well and is not ready to compromise on a particular feature.
He adds that the Z1 Pro is created for the online consumer, who has already used a couple of smartphones in his life, is very comfortable with technology and likes to upgrade phones. That segment of users is what Vivo wants to tap in with the Z1 Pro, which is priced between Rs 14,990 and Rs 17,990.
For Vivo, the Z1 Pro is not a one-off product. The company has plans to launch more devices in the Z-series that will be sold through online channels.
Marya, who was previously with Samsung, believes Vivo’s foray into the online segment with the Z1 Pro is a “natural progression” for the brand. “Right from the day we entered, our objective was very clear: be a long term, successful sustainable brand in India. So the last four or five years, we spent time understanding the consumer, building our brand, building our distribution, and building our after-sales service network. Offline was our first focus which will continue to be a very strong area for us. However, online is also substantial,” he explained.
Players like Vivo have found success in India by selling their smartphones through offline channels, allowing them to quickly penetrate small cities and rural areas. While strong relationships with retailers and robust distribution network definitely helped Vivo grow its smartphone business, it couldn’t match the level of growth witnessed by Xiaomi which relied heavily on the e-commerce to sell budget and mid-range phones.
The Chinese smartphone maker leads the smartphone market in India, dominates the online channel with 48.6 per cent share, according to IDC data. However, Xiaomi which started as an online-only brand, has lately been focusing on building and expanding its distribution network and physical stores.
Marya addressed the competitiveness of the Indian market saying the company will launch only those products or introduce categories where it sees clear value. “India is a very important market for us. However, you understand whenever you launch a product or a category, you also have to build that category in the country. So whenever we think our investments can be proportionally returned, we will launch specific category and specific devices in India. We believe wherever the market will be ready, we will certainly give the offering to the consumer,” he said.
In recent months, Vivo has increased its investments in India in an effort to propel smartphone growth and expand innovative technology to new users across price brackets. The company now has over 600 service centers across the country, all company owned and operated. At the same time, it is adding more exclusive stores than ever. It has over 250 exclusive stores to date in India.
Vivo also has invested in local manufacturing. “We initially invested Rs 300 crore. Now, we have promised we will invest Rs 4,000 crore more,” Marya said, adding that “our current capacity is 25 million annually and is already full.” In the first phase of expansion, the company aims to double the capacity from 25 million to 50 million. This is part of investment being pumped in the opening a new manufacturing plant on the Yamuna Expressway in Uttar Pradesh.
Vivo plans to launch TV, wearables
Many of the company’s successes has come from the smartphone business, which is booming in India and China right now. But the company now wants to expand beyond smartphones.
At the recently held MWC Shanghai event, Vivo showcased AR glasses. It is currently in the prototype stage with no official name decided yet. There are plans to launch TV as well, though Marya neither declined or admitted the development of a smart TV. Xiaomi already sells smart TVs in India, where it has seen astronomical growth. OnePlus is also expected to foray into the smart TV segment soon.
“You will see all of this when we the company launches their 5G devices. We are working on allied devices also, whether it is wearables or other things. And once we launch 5G, we believe 5G will really open up a lot of opportunities for devices like these,” he said.
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