In­dia Buys Phones Off­line

DQ Channels - - Cover Story - JY­OTI BHA­GAT | jy­otib@cy­ber­me­dia.co.in

In­dia was the fastest-grow­ing smart­phone mar­ket in the world in 2017. Ship­ments touched 124 mil­lion for the year, reg­is­ter­ing an an­nual growth of 14 per­cent — the high­est glob­ally — ac­cord­ing to IDC. The ef­fects of de­mon­eti­sa­tion have worn off, and fourth quar­ter (Q42017) sales reg­is­tered an 18 per­cent growth year-onyear. Chi­nese play­ers con­tin­ued to dom­i­nate, with Xiaomi emerg­ing as the mar­ket leader ahead of Sam­sung for the sec­ond suc­ces­sive quar­ter. Xiaomi oc­cu­pied 26.8 per­cent of the smart­phone mar­ket in Q42017, while Sam­sung’s share stood at 24.2 per­cent. Vivo, Len­ovo and Oppo com­pleted the top five with shares of 6.5 per­cent, 5.6 per­cent and 4.9 per­cent re­spec­tively.

Xiaomi tripled its ship­ments year-on-year and sold more than 2 mil­lion units of Mi Phones via off­line chan­nels. In con­tin­u­a­tion of its off­line ex­pan­sion through Mi stores and pre­ferred partners, Xiaomi ap­pointed its first prod­uct en­dorser, and is now very ag­gres­sive in above the line mar­ket­ing, which helped the brand to gain trac­tion in the off­line chan­nel.

While Xiaomi was dom­i­nant in Q3 and Q4, Sam­sung led ship­ments for the over­all year. The Korean man­u­fac­turer’s yearly share was 24.7 per­cent com­pared to Xiaomi’s 20.9 per­cent. Sam­sung’s strong dis­tri­bu­tion net­work and brand eq­uity work in its favour while it strug­gles to match Xiaomi on an ag­gres­sive pric­ing strat­egy.

The ri­valry is ex­pected to in­ten­sify in the com­ing quar­ters. More new and old play­ers will join the race, and make the most of In­dia’s low smart­phone pen­e­tra­tion. The do­mes­tic mar­ket is es­ti­mated to post a “dou­ble-digit growth for next cou­ple of years” — con­trary to what ma­ture smart­phone mar­kets like the US and China are wit­ness­ing.

2017 was an ex­cep­tional year for fea­ture phones. The cat­e­gory wit­nessed a 17 per­cent an­nual growth af­ter de­clin­ing for three con­sec­u­tive years. The fea­ture phone ex­plo­sion was, of course, led by the Reliance JioPhone which started ship­ping in Oc­to­ber.

About 164 mil­lion fea­ture phones were shipped in in 2017, grow­ing more than 17 per­cent from 140 mil­lion a year ago. JioPhone emerged as the mar­ket leader in its very first quar­ter (Q42017) of ship­ments. In Q4 alone, ven­dors shipped 56 mil­lion units of fea­ture phones, re­sult­ing in the high­est-ever ship­ments in a sin­gle quar­ter. JioPhone drove a mas­sive 67 per­cent year-on-year growth in the cat­e­gory.

In Q42017, JioPhone held a 24.1 per­cent mar­ket share ahead of Sam­sung’s 14.5 per­cent and Mi­cro­max’s 8.7 per­cent. Xiaomi tak­ing a lead over Sam­sung in the smart­phone mar­ket and Reliance Jio emerg­ing as the lead­ing fea­ture phone com­pany in In­dia were the two key high­lights of the last quar­ter of 2017.

In­dia, mean­while, con­tin­ues to lead the global fea­ture phone mar­ket. There are over 400 mil­lion es­ti­mated fea­ture phone users in the coun­try. Some of them up­grade from one fea­ture phone to an­other, thus push­ing up con­sump­tion. The smart­phone rev­o­lu­tion has eluded them

so far. XIAOMI In­dia is con­sid­ered as the largest mar­ket for Xiaomi af­ter China and it will con­tinue to be a pri­or­ity mar­ket for Xiaomi in 2018 as well.

Mi has build a suc­cess­ful and lean on­line chan­nel to off­line re­tail via its Mi Home stores which have ef­fi­cien­cies sim­i­lar to the on­line chan­nel. Xiaomi has started as an on­line player but it has been ex­pand­ing into the off­line re­tail space with its new Re­tail model. The com­pany has nearly 50% mar­ket­share in the on­line smart­phone mar­ket; how­ever the over­all on­line

mar­ket space con­sti­tutes of only one-third of the over­all smart­phone mar­ket in In­dia. Cur­rently it has 12 LFR partners across 12 states: Sangeetha, Poorvika, BigC, Lot, Vi­jay Sales, Univer­cell, Fone 4, MyG/3G, Croma, Hotspot, Ezone and Pai. Each of th­ese partners has Mi Zones which is a small area ded­i­cated for Xiaomi smart­phones.

Mi has spread its wide range in ev­ery cor­ner of the coun­try. It runs 600+ Mi Pp Stores in over 11 cities such as Delhi, Jaipur, Bengaluru, Chandigarh, Hyderabad among them.

VIVO

Vivo has adopted a 360-de­gree mar­ket­ing ap­proach where it proac­tively taps as­so­ci­a­tions across dif­fer­ent di­vi­sions. A well thought dis­tri­bu­tion of funds across print, elec­tronic, dig­i­tal plat­forms and off­line mar­ket­ing has helped the com­pany to main­tain a bal­anced me­dia mix and it plans to con­tinue the same ap­proach in In­dia.

Since the be­gin­ning, its strat­egy has been to strengthen the on-ground pres­ence by de­vel­op­ing a strong and es­ca­lat­ing chan­nel com­mu­nity. The com­pany has made sure that it taps in to its po­ten­tial cus­tomer base present across 400 cities, in 22 states of In­dia with the help of our chan­nel partners.

OPPO

Oppo is counted as one of the main hold­ing com­pany right from im­port of hand­sets to lo­cal dis­tri­bu­tion, mar­ket­ing, sales and after­sales ser­vice. Oppo has 13 com­pa­nies in In­dia to man­age its dis­tri­bu­tion and sales. Cur­rently the com­pany fo­cuses on the off­line mar­ket and build­ing fur­ther con­nect with con­sumers all over In­dia. The com­pany aims to build 550 ser­vice cen­ters to en­hance the af­ter sales ser­vices to cover all re­gions among In­dia. Agents have be­come part of the OPPO’s chan­nel ecosys­tem. In In­dia, Oppo has in­vested heav­ily in off­line chan­nels to pro­vide con­sumers a first-hand ex­pe­ri­ence of mo­bile de­vices, choice and of­fer­ings. OPPO has al­ways fo­cused on be­ing present across all touch points to of­fer the best ser­vices to its con­sumers. COCO stores are an im­por­tant part of com­pani’s off­line chan­nels to pro­vide the con­sumers bet­ter ser­vices in the process of pur­chase. Be­sides build­ing more than 550 ser­vice cen­ters to cover all the re­gions in In­dia, It also aims at pro­vid­ing a quick and sat­is­fy­ing ser­vice.

GIONEE

Gionee In­dia has been fo­cussing on em­pow­er­ing its chan­nel partners by build­ing a ro­bust work­force to help them achieve their tar­gets. This chan­nel is es­sen­tially off­line with 20 na­tional dis­trib­u­tors and 600 re­gional dis­trib­u­tors. And in all towns where Gionee is present,it has more than 50,000 cus­tomers. Cur­rently it runs 600 ser­vice cen­tres.

The com­pany has grown its dis­tri­bu­tion net­work in the mar­ket by 30% and dou­bled the na­tional dis­trib­u­tors in 2017. It has 42,000 re­tail out­lets across 2200 cities PAN In­dia and is look­ing to grow to 75,000 out­lets in 2018. Gionee made its pres­ence till the T4 towns.

Gionee has al­ways been an off­line brand and has never built too much trac­tion in the on­line space. It has 70% to 80% trac­tion from off­line and hardly 5% from off­line. Some of Gionee’s top per­form­ing chan­nel partners in­clude Sim­tel Trad­ing from Kerela, HV Con­nect­ing from Gu­jarat, PP Tele­cell from Delhi, Flash from Andhra Pradesh, Te­lan­gana and Tamil Nadu and So­ham Tele­com from Pune.

LAVA

Lava is the only com­pany in In­dia with 100% sin­gle lay­ered dis­tri­bu­tion as against all its In­dian com­peti­tors. It com­prises of 1115+ dis­trib­u­tors and 101441+ re­tail­ers. The com­pany has made sig­nif­i­cant in­vest­ments in its sales and ser­vice dis­tri­bu­tion net­work, which com­prises 1060+ ser­vice cen­ters through­out the coun­try, and a unique & re­li­able sales and ser­vice dis­tri­bu­tion (SSD) net­work com­pris­ing 59+ CFAs. Lava was also de­clared as the most trusted smart phone brand in prod­uct qual­ity and af­ter sales ser­vice amongst all In­dian brands by Sil­i­con In­dia.

In In­dia Lava’s sin­gle-layer dis­tri­bu­tion model en­ables it to be very close to the cus­tomers and hence have full con­trol on the prod­uct.

Lava has its pres­ence in across the coun­try in­clud­ing far flung cor­ners like Leh Ladakh and An­damans. It also has ser­vice cen­tres in th­ese ar­eas as well. All the ter­ri­to­ries are worked upon by at least 1300 partners. Cur­rently Lava has more than 1.15 Lakh re­tail points in the coun­try and also 1000 ser­vice cen­ters.

Lava treats dis­tri­bu­tion and re­tail­ers as its own em­ploy­ees in In­dia. What Lava does is trans­fer the money to the ac­counts of the re­tail­ers di­rectly. Lava also runs cam­paigns to ed­u­cate re­tail­ers. Also it keeps the prices same for off­line and on­line to take care of the re­tail­ers in­ter­ests.

KARBONN

Karbonn prod­ucts are avail­able through 1500+ dis­trib­u­tors across the 40K out­lets through­out In­dia; th­ese prod­ucts are avail­able on the on­line plat­form too. The trac­tion from on­line is lit­tle un­der the in­dus­try av­er­age, but the com­pany is wit­ness­ing more trac­tion from the off­line chan­nel. Around 80% of its sales are done off­line and 20% is on­line. It aims to be present right from about Rs 3500-4000 up­wards to 10K+ in Smart-

phone price cat­e­gories.

Karbonn is work­ing on 8 dif­fer­ent lan­guages. The lan­guages to be cov­ered are Hindi, Marathi, Gu­jarati, Pun­jabi, Tamil, Tel­ugu, Kan­nada and Ben­gali. Karbonn do not seg­ment the mar­ket on ge­ogra­phies, be­cause its users/ con­sumers liv­ing in Delhi and Mumbai and there are num­ber of users liv­ing in the ru­ral ar­eas as well. Their ex­pec­ta­tions and as­pi­ra­tions from tech­nol­ogy are no ways dif­fer­ent. That’s the rea­son its prod­ucts are avail­able through­out the coun­try through the tier 1/2 partners. In terms of reach­ing out in the mar­ket, it reaches tier2 and 3 cities.

With re­spect to the dis­tri­bu­tion, Karbonn has started off with the ex­pan­sion in dis­trict level in­stead of start­ing with metro cities. It has built a wide dis­tri­bu­tion net­work that cov­ers 90% of the districts in the coun­try and 1500+ dis­trib­u­tors around the net­work. Then there are 800+ ser­vice cen­ters that cover the districts across In­dia.

MI­CRO­MAX

Mi­cro­max has more than 30 mil­lion ac­tive con­sumer base in In­dia. The com­pany has 800 front end en­gi­neers who were sta­tioned in the ser­vice cen­tres.

The com­pany has cer­tain prod­ucts that are on­line only and oth­ers that are fo­cused on both off­line and on­line chan­nels. In the past Mi­cro­max have launched some of Mi­ra­max’s prod­ucts ex­clu­sively on­line like Can­vas Spark range and Xpress range which have done ex­tremely well. From the trend, the com­pany wit­nessed, both chan­nels have been far­ing well and are ben­e­fit­ing from steady sales both on­line & off­line. The com­pany has fur­ther strength­ened its dis­tri­bu­tion net­work from 34-35,000 to 60,000 out­lets as ma­jor­ity of the users in the sub 5k cat­e­gory are off­line users and are look­ing for com­pelling prod­ucts that con­nect them dig­i­tally. The com­pany has a holis­tic mix of both the chan­nels with 60% of its sales com­ing from off­line chan­nels and rest from on­line chan­nel.

INTEX

Since last 3 years Intex has come up very strongly in the In­dian mar­ket. Farhan Akhtar is the na­tional brand am­bas­sador. The com­pany is also do­ing brand­ings; tar­get­ing the in­di­vid­ual states and that’s why in re­cent years it has been able to crack dif­fer­ent mar­ket. The other ini­tia­tives in­cludes ATL ac­tiv­i­ties which the com­pany is con­duct­ing on a reg­u­lar ba­sis.

Last year Intex has con­ducted its TV cam­paigns for the prod­uct called Aqua lions 4G with the Gu­jarat Lions team. In Fea­ture phones cat­e­gory, the re­gional lan­guages is its USP. Intex was the first brand to launch a fea­ture phone which has a big­ger bat­tery that also acts as a power bank; and the ul­tra 400.

Intex has a dis­tri­bu­tion setup of about 1500-2000 deal­ers across the coun­try. In terms of ser­vice, Intex has a very good ser­vice setup which no other brand can match. Above 1500 ser­vice out­lets are there in the mar­ket, out of which cou­ple are owned by intex. The bal­ance is on the fran­chisee model which are called Intex care cen­ters. The deal­ers are mainly as­so­ci­ated with the re­tail out­lets in the mar­ket. Be­side th­ese, com­pany is also hav­ing its pres­ence in all the LFRs whether it is Croma, Reliance or Metro.

COMIO

COMIO has their ma­jor fo­cus on off­line trad­ing and it’s one of the USP’s of the brand. Go­ing for­ward, in the month of April, it is launch­ing PAN In­dia, launch­ing its de­vices in South & East mar­kets. Comio is cur­rently avail­able at multi-brand re­tail stores, from Feb it is cov­er­ing all LFR chains.

The com­pany has got its ma­jor sales from Gu­jarat (15,000 monthly ac­ti­va­tion of phones), then MP, Ra­jasthan, East UP, Pun­jab, Ma­ha­rash­tra, Raipur, Nag­pur, etc. Since its dis­tri­bu­tion is very strong, the com­pany is get­ting good re­sponse for its prod­ucts over­all.

Comio cur­rently have 6 mod­els- All the smart­phones are de­signed keep­ing in mind the price seg­ment, fea­tures, spec­i­fi­ca­tions, and the tar­get au­di­ence.

Plat­forms for COMIO Af­ter-Sales sup­port in­clude both on­line and off­line. There is Ser­vice for Cus­tomer/Re­tailer/Dis­trib­u­tor, for On­line cus­tomer where the SVC is not avail­able, there is op­tion to con­nect with near­est SVC else the com­pany pro­vides pick up & de­liv­ery through couri­ers. TAT for this pickup & de­liv­ery 2 max.

For off­line chan­nels the com­pany is pro­vid­ing ser­vice through GSP (Global Ser­vice Provider), there are aprox 500 ac­tive SVCs, all are multi brand. Ex­clu­sive are in plan­ning mode & roll out is ex­pected by end of 1st Qtr 2018.

Keep­ing in mind the time­line of re­pair op­er­a­tion at the ser­vice cen­tre the com­pany has set the av­er­age time taken by the ser­vice cen­tre to re­pair a smart­phone to one day. Also Comio is av­er­ag­ing 7 days for up­coun­try lo­ca­tions and 3 days TAT for met­ros/A class Towns.

JIVI MO­BILES

JIVI mo­bile’s strength is its price and chan­nel ecosys­tem in In­dia. JIVI mo­biles is 360° present with ac­tiv­i­ties in­clud­ing ads , TVCs, road shows

and also Mo­bile vans for ad­ver­tise­ments. The com­pany is also fo­cus­ing to­wards BTL ac­tiv­i­ties which helps them in get­ting more at­ten­tion from con­sumers.

The com­pany pro­motes its prod­ucts off­line but some dis­trib­u­tors also sell the prod­ucts on­line.

Be­side this, the com­pany has also roped in Hindi film ac­tor Ir­rfan Khan as its brand am­bas­sador.

The com­pany has about 650 ser­vice cen­ters pan In­dia; cur­rently it has more than 570 au­tho­rized dis­trib­u­tors across coun­try.

ZIOX MO­BILES

Ziox Mo­biles has started pay­ing more at­ten­tion on its on­line seg­ment. Ear­lier it was hav­ing good trac­tion from TV shop­ping plat­forms like Naap­tol.

Ziox mo­biles are widely sell­ing ev­ery­where in In­dia. The com­pany is sell­ing a huge num­ber in the com­mer­cial cap­i­tal of In­dia that is Mumbai. Ziox smart­phones are gain­ing ap­prox­i­mately Rs 4 Crore busi­ness per month there.

The chan­nel ecosys­tem is cur­rently play­ing a very im­por­tant role. Ziox has ap­prox­i­mately 750 dis­trib­u­tors for both smart­phones and fea­ture phones. From Gu­jarat, Guwa­hati, Kash­mir to Ker­ala ev­ery­where it has tremen­dous reach. There are cer­tain branches where the com­pany is get­ting more num­bers like from Tamil Nadu, Gu­jarat, Ma­ha­rash­tra, UP, West Ben­gal, Ra­jasthan. It has ap­prox­i­mately 700 ser­vice cen­tres across In­dia.

ZOPO

Zopo has its off­line net­work across the coun­try. It has its dis­trib­u­tors and re­tail­ers where they are do­ing brand­ing. The com­pany dis­tri­bu­tion is close to 200 all over In­dia and re­tail­ers num­ber is around 5000 to 6000 and they all are multi brand out­lets. In terms of max­i­mum trac­tion t2, t3 cities are more crit­i­cal than metro cities for Zopo. The brand has net­work which has more than 250 ser­vice cen­ters. ZOPO is uti­liz­ing their cur­rent pres­ence in re­gional mar­kets and ser­vice cen­ters across the coun­try.

ZOPO has launched in more than 20 cities as of now, start­ing with 3 in Kar­nataka, 4 in Ma­ha­rash­tra, 3 in Haryana, 2 in Orissa, Delhi & 1 in Pun­jab. It has city wise dis­trib­u­tor who is ap­point­ing 20-30 ZOPO au­tho­rized re­tail­ers whom he com­pany is giv­ing all sup­port like in shop brand­ing, in shop pro­moter. ZOPO has more than 1500 re­tail­ers which caters to the off­line end users.

NUU MO­BILE

NUU Mo­bile fo­cuses purely on off­line mar­ket and its prod­ucts are avail­able in stores. The com­pany be­lieves in dis­tri­bu­tion net­work and cur­rently is tied up with 200 dis­tri­bu­tion partners in In­dia. Soon it will be avail­able in tier 1 and tier 2 cities.

80% NUU busi­ness comes through tra­di­tional chan­nel.

NUU Mo­biles en­tered in the In­dian mar­ket in 2017 with plans to in­vest $5 mil­lion in brand build­ing ex­er­cises and tar­gets to sell 2 mil­lion de­vices per an­num.

As a ser­vice to its cus­tomers NUU has been pro­vid­ing free pick and drop ser­vice dur­ing warranty pe­riod in case con­sumer face any prob­lem in their hand­sets.

The com­pany has also part­nered with third party ser­vice cen­tre firm Serv­ify, which has around 2,000 ser­vice cen­tres, to pro­vide af­ter sales ser­vices.

HTC

HTC’s GTM strat­egy is a 360 de­gree one in­clud­ing both ATL and BPL ac­tiv­i­ties. The com­pany has pro­mot­ers at the re­tail out­lets, it also closely works with the re­tail­ers through dig­i­tal cam­paigns.

HTC does not do on­line. Its busi­ness is purely based on off­line mode with on­line trac­tion less than 5 per­cent. It has Na­tional Dis­trib­u­tors like In­gram Mi­cro which han­dles all the LFRs. It also has MPS which does the dis­tri­bu­tion in North, South and West, Th­ese dis­trib­u­tors fur­ther go to re­gional dis­trib­u­tors in dif­fer­ent cities and towns, HTC has its pres­ence in more than 400 cities in In­dia with 10000 points of Dis­tri­bu­tion.

Whether its a first touch screen phone, first Smart­phone, first an­droid, first win­dows, first 4G, HTC has been al­ways first to launch in In­dian mar­ket. The com­pany keeps driv­ing the in­no­va­tion in cam­era which is why HTC knows as the leader in de­sign and Tech­nol­ogy.

PANA­SONIC

Pana­sonic is spend­ing Rs. 200Cr in mar­ket­ing ac­tiv­i­ties in a year in In­dia. Mar­ket­ing ac­tiv­i­ties for Pana­sonic are seg­mented into 2 ar­eas. First is for dis­tri­bu­tion sales and an­other for on­line sales. For Dis­tri­bu­tion concern, it would be go­ing with the print me­dia, TV ad­ver­tise­ment and out­door ac­tiv­i­ties at shop front. For On­line, Pana­sonic prefers the so­cial mar­ket­ing and dig­i­tal mar­ket­ing route.

The com­pany’s key pri­or­ity in In­dia at this mo­ment is to bring prod­ucts in each of the price seg­ment with the fo­cus on de­sign and per­for­mance of the phones.

Pana­sonic is a dis­tri­bu­tion fo­cused brand in In­dia to ex­panded its chan­nel in 2017. As of now it has 200 lo­cal dis­tri­bu­tion partners which is in­creased to 350 lo­cal dis­trib­u­tor partners. Also, Pana­sonic ex­pands its chan­nel to tier 1, tier 3 towns and even ru­ral In­dia.

INFOCUS

InFocus is 100% Made in In­dia. How­ever, the mod­els are de­signed in China.

Infocus fo­cus is to made phones avail­able in 50K re­tail out­lets; Smart­phones are avail­able in 8 states in In­dia. For off­line seg­ment, it has ap­pointed 500 dis­tri­bu­tion partners across In­dia. InFocus is fo­cus­ing on chan­nel ecosys­tem and on­line both for all In­dia dis­tri­bu­tion for fea­ture phones and smart­phones. Its Na­tional dis­tri­bu­tion part­ner is VRP Telemet­ics and it has fur­ther ap­point state dis­trib­u­tors. The com­pany is do­ing R&D and work­ing with Jio to give a 4G fea­ture phone to the cus­tomers.

The max­i­mum trac­tion is com­ing from on­line sales es­pe­cially from the smart­phone cat­e­gory. While, the off­line trac­tion is more for fea­ture phone seg­ment.

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