Vivo Charts Out Aggressive Growth Plans For Indian Market

by CXOtoday News Desk    Oct 06, 2016


Ever since Chinese phone marker Oppo overtook Apple to become the second in the most prominent smartphone brands in the country, another competitor Vivo, has charted out its plans for the Indian market. By next year, Vivo is gunning for a 10% share of the Indian market, apart from entering the space of online retail, and looking at local manufacturing in India, putting an impetus to the ‘Make in India’ campaign by the government.

What makes the Vivo move significant from the industry perspective, is that the company is known to have a marketing and promotions budget, almost equivalent to that of any well established brand. The marketing budget of Rs 300-400 crore for the entire year, is known to have already been exceeded, and thus the company is looking to churn out a sound online strategy plan, which will help penetrate deeper into the Indian market.

Kent Cheng, the newly appointed Chief Executive of Vivo had said to ET, “We had a 2-3% market share in January this year, which is now grown to 5-6% by volume and 7 per cent by value. We have set internal target of 10% by next year, which may include some share from online sales,” making it clear that Vivo has aggressive plans from the Indian market going forward. And the reasons are pretty obvious too.

Apart from being perhaps the largest market outside it’s own country Vivo has seen a sale of 1 million units during the end of June quarter, which is a 200% growth over the previous corresponding year, as pointed out by Counterpoint Research. Also, the fact that Vivo has not followed the strict dictum of ‘online-only’ policy like many competitors, and built a network of 15,000 retailers across 400 cities in the country, which helps it give an easier access to a large group of consumers, who like to go to retail stores to buy handsets.

Since the company has managed to give healthy commissions and margins to dealers, it works in their benefit to maintain the offline retail network, that is currently pushing their volumes up. 

Vivo plan’s extend to the producing locally as well. They already have a 30,000 sqft assembling facility in Greater Noida, where they had invested Rs 125-crore, but with the full-capacity of 1 million units production each month being almost reached, Cheng and his team is indeed considering expanding the Indian operations by setting up another facility.

The company already has 18 models being sold in India across the X,V, and Y series of phones, within the price range of Rs 7,500 to Rs 23,000, but the production and designing unit in Greater Noida has already reached its full capacity, due to which the other developments come in.For Diwali, the company introduced on Wednesday a new model Y55L, priced at Rs 12,980. It also slashed price of the higher end V3 Max model to Rs 19,000 from Rs 23,000.

“Assembly is the first step, with that experience, we are looking to have more functions, full manufacturing, R&D including design in India in due course,” Cheng said, which signals his plans for India, for expanding and finalizing the financial details for their next move in the country.