India Buys Phones Offline
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 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 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 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 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 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 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.
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 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 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 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 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 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’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 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 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.