India surpassed the USA in 2019 to become the second largest smartphone market in the world, second only to China. Interestingly, India's surge to second place is largely owing to Chinese smartphone manufacturers like Xiaomi, Vivo, Oppo, and Realme who have made a smartphone more accessible to the common Indian.
2020 was a challenging year for the Indian smartphone industry and as per data from Counterpoint's Market Monitor service, the Indian smartphone market registered a modest 4% decline in the pandemic-hit year however gathered momentum in the second half of 2020 by crossing 100 million units. And the growth story continues into 2021. Infact India's smartphone shipments grew 23% YoY to reach over 38 million units in Q1 2021 which was a record first quarter ever. New product launches, enticing promotions and financial schemes, easing of lockdown restrictions as well as pent-up demand coming from 2020 due to work from home and remote learning, drove the smartphone market in Q1 2021.
With India's smartphone market being one of the most lucrative in the world, it certainly enjoys the global spotlight. Today, Chinese smartphone manufacturers hold the maximum chunk of the Indian market (Nearly 75%). Xiaomi is the market leader with 26% market share and outbeats global giant Samsung which currently holds a 20% share. A brand which is slowly inching its way up on the charts and currently holds 3rd place is Vivo with a 17% share.
Below are some of the nuances of the fastest growing Indian market and Vivo's strategy which has positioned them as the 3rd largest player.
- India growing young population
India has the largest young population globally and an English-speaking one with access to information and media, making them more evolved, discerning and informed. Brands like Vivo were able to capitalise on the needs of the growing young population and come up with competitive pricing strategies and feature-rich phones. This is the prime reason that customers prefer buying Vivo mobile when it comes to selecting a phone with innovative technology. While Vivo mobile has a very strong presence in the budget segment, it is looking to enhance its share in the premium market segment which is currently dominated by Apple and Samsung by launching 5-6 new premium models in 2021.
- Innovation driver
Moving beyond the specs-price battle, Chinese smartphone brand Vivo appears to be slowly emerging as one of the favourite ‘design innovation' brands which helped them in gaining a strong foothold in the cost-conscious Indian market. Whether it is bringing the first smartphone with pop-up selfie camera or delivering the ‘in screen' finger print sensor experience – Vivo has been at the forefront of innovation. Infact it understands the market segmentation well and is able to position these innovations at varying price-points after carefully studying customer preferences and usage habits.
- Make in India
With the emphasis on the Make in India initiative which started in 2014 and the growing anti-China sentiment, more smartphone companies are looking to expand their base in India to not only gain advantage from a cost perspective (reduced taxes) but also provide employment opportunities to the local population which will further create positive sentiment. Infact Vivo has a manufacturing facility in Greater Noida which employs around 10,000 people and has the capacity to produce over 3 crore smartphones annually. It also plans to set up an industrial design centre in India to ensure that India doesn't only remain a manufacturing base but also transitions to a development centre for Vivo.
- Offline sales
Vivo is the market leader in offline mobile sales since it believes that the Indian customer prefers to see the device and experience it before purchasing. With India being a strong market for Vivo, it plans to open around 150 exclusive stores in 2021 to provide a differentiated brand experience which will further augment the offline sales channel. These offline stores will also aid in selling the premium handsets which will be one of the core areas of focus for Vivo in 2021.
- 5G adoption
Even though 5G network is not available in the country yet, there is growing need regarding the early adoption and future proofing of smartphones which is pushing 5G handset sales. Market intelligence firm CyberMedia Research (CMR) infact anticipates overall 5G smartphone shipments in 2021 to account for 10% of overall phones purchased which is around 11 million against 3 million shipments in 2020. Vivo has already declared that majority of its smartphones priced above Rs 20,000 will be 5G-enabled which will help position itself as the one of the mainstream 5G brands in the country.
- Aggressive branding and advertising
Vivo has been very aggressive in promoting its brand and creating customer loyalty specifically among the young urban populace who is a perfect blend of tech-savvy and value conscious consumers. It also roped in top actors and accomplished sport celebrities as brand ambassadors because both Bollywood and Cricket are adored in India. Vivo spent a staggering amount to win the IPL sponsorship (probably the biggest sporting event in India) which is adored by most young Indians and helped them gain a big ticket through increased customer confidence and brand visibility.
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