• Ajay Sharma

From Ajay With Love!

So now let’s move on to an outlook some key brands should have for the year 2019.


For a brand to succeed, it has to have a strong presence in the Rs.5-20k segment which contributed close to 75% of the overall market in 2018 as per Phonecurry.

1. Xiaomi With its sheer momentum, and the fact that the new e-commerce rules become applicable only from 1stFebruary, the brand may just be able to hold on to its leadership position in Q1. However, Q2 onwards, I do see a challenge for them from #Samsung which has its major contribution coming from offline.

#Xiaomi will have to handle the pressure from:

a. Trying to compensate their online sales which is 70% of their total sales due to the new policy.

b. Other major online and offline brands.

They need to speed up the steps decided by them for offline.

I see them move a rung below to No. 2 by Q2 unless they have something great up their sleeve which we don’t know yet in terms of products and channel strategies.

My suggestion – Work on product differentiation and push up the sale of Rs.10-20k price segment phones.


2. Samsung With its offline understanding, strong retail base and a wide portfolio, the brand can only gain. They had the maximum launches in 2018.

I predict a growth for them starting Q1 and them taking up the pole position in Q2.

However, they cannot leave an inch of space if they want to be the No. 1 brand in 2019 and need to optimise the online channel as well. The launch of the new #SamsungGalaxyM series with three smartphones dedicated to the online space to take on Xiaomi could be it, though I would have preferred the initial launch to have happened offline.

My suggestion – May be a good idea to sacrifice their margins in the growing mid-segment and increase channel margins in these segments to make it more attractive for the channel to sell, if they don’t want to take the route of making the products price aggressive.


3. Realme The brand has done well for itself till now. However, I am not too convinced about three factors:

a. The reducing hype of their launches. If one would have noticed, the time duration for which the device was available online for every new launch has been increasing. b. From what I know, #Realme online sales is more driven by retailers purchasing – expecting the brand to sell like Xiaomi – rather than actual customers buying as is the case with Xiaomi. c. No clear channel strategy – In fact, frequent changes in their decision on how to approach offline. Possibly due to the team’s poor exposure to India as a market and offline as a channel.

At a 1.5% margin no one can do business in the long term without 2-3 rotations in a month. It may happen in Q1 but for sure not possible in Q2 specially with the mayhem happening. Whoever is picking up the distribution today will not be able to continue at these margins for long. The so-called distribution structure they have, looks more of a short term to me today. They really need to have senior experienced people now at the top to handle offline.

One more thing would be a better product portfolio presence in the growing price segment of Rs. 10-20k price which is missing.

I would expect them to hold their position in the top 5 at best in Q1, but the ranking will most likely show a decline starting Q2.


4. Vivo The only brand in the top 5 which remains a major offline brand with limited online presence.

My suggestion to them would be not to follow #Oppo in the creation of an online brand like Realme. Rather focus on increased tier coverage, WoD and DoD.

They have managed to create the WOW!factor for some of their models. Their marketing in terms of the use of brand ambassadors and properties has been good. Fine tuning it a little more should help them grow. They will remain in the top 5.


5. Oppo Oppo has been primarily an offline brand. My first fear was their products getting cannibalised by Realme. With the new changes in the e-commerce policy the cannibalisation issue gets bigger with Realme now going aggressive offline.

They have to play very carefully and totally dissociate themselves from Realme.

Channel strategy could be same as Vivo.

Another thing would be to consider increasing their channel margins a bit to keep their distributors on hold. It’ll not just be disheartening to them to see Realme selling similar specification products at 20% lesser price, the distributors are most likely to move to other brands who are migrating from online to offline.

As a brand, they have not been able to build any solid hype around any product last year which they would need to address now.

I would expect them to lose market share or remain at the same % due to cannibalisation and pressure from pure online brands moving offline.

How about having an experienced Indian team to run the operations in India?


6. Huawei/Honor These are actually two separate brands, but I am considering them as one. Huawei, as we all know, has unsettled #Apple from the No. 2 position globally, despite being banned in the US. It is putting in a lot of money on strengthening its camera capabilities and differentiated finishes. I am hearing a lot of the its top line hardware like the Leica 3-lens camera in P20 Pro and the Twilight finish – a shiny, rainbow-effect finish differentiating its products from the many monotonous smartphones in the market. They are No. 2 after Samsung in terms of the product launches across segments and need to leverage that.

Their challenge is offline sales. It’s just not about having a distribution presence but about a channel which is driving. The channel talks about old unsettled issues. If these are genuine issues, the time has come for them to resolve all of these and reboot, if they want to be in the top 5 in India. In any case I would expect them to grow from where they are.

A distribution overhaul followed by regional meets is my suggestion to them and it should be done NOW.


7. Transsion (Itel, Tecno and Infinix) Transsion may not technically be a global brand as it does not sell in the US or Europe. However, in Africa, it is THE KING,and the volumes there give it a tremendous back-up in terms of their supply chain. A No.1 brand in Africa, the brand commands a 30% market share there. In India too they have been showing growth QoQ and are the 6th, if not the 5thposition, brand by volume.

I am already seeing their growth slowing down a bit. They cannot survive like this for long unless they come up with something innovative on product or marketing. I don’t see them in the top 5 for some time. Top 10? Maybe Yes.