 "Vivo, Intex take guard")
The annual 100 million unit or Rs 80,000 crore smartphone market in India is a crowded place with a battery of brands jostling for top spot, or any spot at all. Two challenger brands, Vivo and Intex, have upped the noise in recent months. Having chosen cricket to further their brands in the country that treats the game as a near religious experience, these brands are pouring in the moolah to back their ambitions.
Chinese handsets major Vivo, which has the title sponsorship of the Indian Premier League for the next two seasons at Rs 125 crore, has allocated Rs 200 crore for promotion during 2016. Its Indian peer, Intex, responded by bagging the new Rajkot team in the IPL; the venture is estimated to dig a Rs 100-crore-wide hole in the company's coffers over the next two years.
The industry with 150-odd handset players is set for an intense battle of brands, especially as new brands are knocking down its doors almost every other day. Already the impact is being felt by some of the fast trackers in the space: Both Micromax and Intex have lost market share over the past year. The latest data from International Data Corporation (IDC) for the quarter ended December 2015 shows that the country's largest home-grown smartphone brand Micromax lost nearly four per cent market share during 2015. While, it still holds the second spot in the pecking order, after Samsung, its share plunged to 14.1 per cent in October-December 2015 from 18 for the same period a year ago. Intex, meanwhile, lost its position to China's Lenovo to end up fourth.
According to industry veterans, cricket rarely lets a brand down. And tournaments like the IPL are successful, tried and tested ways to get the attention of a large number of consumers at one go. "Cricket tournaments help brands gain a permanent place in consumer mind space in India", Shashin Devsare, executive director, Karbonn Mobiles said.
For Vivo, which is new to the Indian market, the idea is to get maximum eyeballs in the shortest possible time and high decibel events like the IPL offer the perfect pitch. The move will help Vivo become a household name, industry analysts say. For Intex, cricket is a means to improving its brand value. The company has been under pressure from Lenovo since mid-2015, which eventually toppled it to gain the number three spot in smartphones market in the December quarter.
Both brands could however gain by taking a hard look at the story of Micromax. Micromax raced ahead way too fast, skipping past companies such as Lenovo, Intex, Lava and Karbonn although they were always closely behind. All of them have well-established offline distribution channels and are working on to strengthen local manufacturing - like Micromax. The majority have gained during the past one year but, Micromax, which once featured among the top ten vendors globally, has lost out. Internal scuffles over leadership have cost the company dear as has misreading market trends.
Given the relentless pressure from competitors, the handsets industry is a slippery slope. And for Vivo and Intex, even as they focus on gaining the popular vote through cricket, the lesson to learn would be to not ignore the ways in which other brands such as Lava and Karbonn are getting into customers' hearts.
Karbonn Mobiles is banking on the need for vernacular language based smartphones. With nearly 70 per cent of the population in rural areas, the strategy will yield rich dividends, Devsare says. The fifth largest player Lava, which has managed to hold on to its market share at seven per cent during the year, is focusing on physical aesthetics, according to Navin Chawla, vice president and product head, Lava International.
Lava and Karbonn have allocated Rs 200 and Rs 150 crore, respectively, for advertisement and promotion expenses during 2016 but, cricket is not their game. "Since, our brand is already known and has recall among consumers, sponsoring such events is not for us anymore", Devsare said. Both have sponsored international cricket tournaments, played in India, earlier.
Lenovo, which gained significant market share during the past one year - from less than seven per cent in December, 2014 to 11.6 per cent a year later has positioned itself as a quality brand, but at a reasonable price. According to Faisal Kawoosa, lead analyst, CyberMedia Research, it has benefited from superior positioning and its value for money proposition. For all those stepping on to the cricket pitch to build their brands, the best advice may be to bear in mind the famed unpredictability of the game they are betting on.
