In India, Chinese smartphone maker Vivo has built its reputation as the smartphone brand for the masses. A sound portfolio of products, along with heavy marketing, a gradual expansion of its manufacturing base and growing e-commerce presence has helped Vivo to become the Number 3 player by market share by the end of Q3 this year. But Vivo, which entered India in 2014, does not seem content with the third position and has set its sights on the very top slot where Xiaomi has been sitting tight for a few quarters.
“We believe we have a good chance to not just become Number 2, but Number 1,” Nipun Marya, Vivo’s India Director for Brand Strategy, told indianexpress.com on the sidelines of the opening of a new manufacturing facility at WTC Tech Zone, Greater Noida, Uttar Pradesh. The new unit has an annual production of 8.4 million units. With this, Vivo’s annual manufacturing capacity stands at 33.4mn units, powered by a workforce of close to 10,000 people. Vivo plans to start production as part of the Phase II expansion from mid-2020, adding 5,000 more people.
Market data released by tech research firm Counterpoint for Q3 2019 showed Vivo’s market share climbed to 17 per cent from the 10 per cent from the same period last year. Competitors like Xiaomi and Samsung still rank first and second in terms of market share, covering 26 per cent and 20 per cent the industry, respectively. However, both brands lost market share. If Samsung’s, which slid 3 per cent, falls further it may give Vivo a chance to overtake the South Korean major.
Marya, however, said the strategy is to become a long-term successful player in the country by getting the fundamentals right. “Our objective has been to ensure the inputs are right. Market share is output and we as an organisation also care about it. But it’s not the single most important objective or the KPI we are chasing,” he said.
‘Rs 10k-20k segment will be the key focus area’
Vivo has historically had a strong focus in the mid-range smartphone market and the brand says it will continue its efforts to bring innovative products in this volume-driven segment.
“The Rs 10k-20k segment has been our focus area. It is a very big segment and therefore our S series and some of our Y series products are in the same segment. Given the large market size, it gives us the option to pack more into a particular product. In online to this segment has about 80 per cent of the volume,” Marya said.
Vivo’s rivals Xiaomi and Realme too are concentrating on this segment where phones are sold mostly on the basis of specifications and camera megapixel counts. The top five smartphone brands — Xiaomi, Samsung, Vivo, Realme and Oppo — accounted for 87 per cent of the total smartphone market share in Q3 2019, data from the research firm Counterpoint showed.
‘No 1 brand in the Rs 22k-30k segment’
Debunking the myth that Vivo can’t sell smartphones in the premium mid-range segment, Marya says the company has been the top brand in “the Rs 22k-30k segment”. He said the V-series has fared really well, be it the Vivo V9, V11, V15 or V17, which helps explain its stronghold in this very specific segment. “I am not sure if this is a new perception,” he said.
Xiaomi is also actively looking to make a dent in the premium mid-range segment, where Vivo has done well. Last year, Xiaomi launched the Poco sub-brand to create a market for high specced smartphones at affordable prices. This year, the company launched the K20 and K20 Pro smartphones with premium glass designs and multiple cameras.
‘Huge potential for Vivo in the premium segment’
The only segment where Vivo doesn’t register on the map is in the high-end of the smartphone market, where Apple, Samsung and OnePlus are clearly the leaders. Premium devices like the Galaxy S10+ or iPhone 11 Pro Max account for a relatively small share of total shipments, but they promise higher margins for smartphone makers.
Marya admits that Vivo hasn’t been active in the premium segment, where smartphones are priced upwards of Rs 35,000. But a change could happen soon. Without revealing the name of the device, Marya said the brand does see a huge potential in the top-end of the smartphone segment and the team is closely watching where the market is headed. The last big flagship phone we saw from Vivo was the Nex, which made its debut last July.
‘Not averse to 108MP camera in a smartphone’
Smartphone brands, especially from mainland China, have not shied away from launching phones with higher megapixel cameras. Just this year alone, we saw multiple brands launching phones with 48MP, 64MP and even 1080MP cameras. Xiaomi recently launched a smartphone with a 108MP camera and there are reports that claim Samsung’s Galaxy S11 smartphone will also have a 108-megapixel camera.
Marya said it all depends on the consumer’s need and benefit of using a 108MP camera on a smartphone. “We are a technology company and we also have to continuously upgrade. If we think there are consumer requirements and benefits of really going to a 108MP camera, we are not averse to it. However, if we think the consumer is well and enough satisfied with a 64MP or 48MP camera and what he wants is an extra this or an extra that we will be happy to do that,” he said.
“Ultimately, phone designing is all about prioritisation… I can put a 108MP camera and everything, but the price can’t be Rs 20, 000 or Rs 30,000. It’s all about the priority.”
‘Future beyond smartphones’
But Vivo sees its future beyond smartphones too. The company is placing its bets on 5G to expand its smartphone lineup, as well as launching many allied devices. “We are not only limiting ourselves to mobile phones, yet even going beyond mobile phones in the 5G space, which means whether it is wearables, or even consumer electronic appliances like televisions and refrigerators and other devices. We have also tied up with other companies TCL and Haier to bring the 5G experience to our customers,” he said.