Vivo: Championing The Offline Since 2014

The year 2014 was a revolutionary year for the Indian smartphone industry. It marked the entry of three major smartphone brands in India – Oppo, Xiaomi and Vivo, in that specific order. Xiaomi following the Chinese strategy of focusing online and Vivo and Oppo taking the offline route.

It was also the year that saw India’s e-commerce boom in earnest with Flipkart hitting the US$ 1 billion mark with their tie-up with Motorola – the association generating sales of a million units in 5 months. Till 2013, online contributed to just 5% of the overall volumes, and no single brand or model had generated a number close to this.

Xiaomi rode the online momentum to capture the No. 1 position in the Indian smartphone market in Q4 2017. While Xiaomi did try to create some offline presence starting 2016, it really wasn’t a serious attempt. Their product was in demand and the offline channel starved of stocks, had no choice but to either sell whatever they could lay their hands on or in some cases, buy from online and sell offline. By Q4 2017, Xiaomi had taken over the crown of the top Indian smartphone brand from Samsung. In some ways, the route taken by Xiaomi, was the easier and faster one with price disruption as the driver and online as the platform.

Following an exactly opposite strategy, the other two brands Vivo and Oppo had been working on some good products, setting-up distribution, offering lucrative retail programs, increasing visibility, pushing sales through trained in-store demonstrators etc. to support the offline channel and grow with them. There were no compromises on the quality and pricing. The retail was treated as a partner and educated on the advantages of maintaining market operating prices to ensure a healthy margin. As one of the key leadership members of AIMRA said, it was Vivo and Oppo that helped offline survive the turmoil with online gaining and the established brands at that time unable to offer a decent margin to the retailers. Speaking to one of the leading regional modern trade at that time, the message conveyed was clear – sell good quality devices to keep the customer happy and let the retail make good margins to keep them happy. A win-win for all. At a time when Xiaomi was growing exponentially and products were in short supply, Vivo and Oppo’s aggressive supports and channel discipline suited the much under pressure offline even on reduced volumes.

Offline was, is, and will be the backbone of smartphones in India. It offers a brand more stability. In Vivo and Oppo, the offline channel had got some good alternatives beyond Samsung that too with good support.

The two brands continued to build on the initial success and the well-oiled machinery in terms of the process and systems being followed by them, making things easy for the partners to align and grow. For the two brands, it is said that the retail does not have to worry about customer service, a key parameter of customer satisfaction, which is handled by company-owned centres that believe in customer delight. Some retail outlets spoken to could not give a single reference of a customer coming back to them with an unresolved quality issue, which as per them is not the case even with Apple and Samsung. There is no denying that there would be some cases of escalation of service issues to retail even in the case of Vivo and Oppo but the percentage would be minimal and much below competition.

Much like the migration of their product range from 3G to 4G well in-time in 2016, both Vivo and Oppo had smartly moved out of the low-end segment and positioned themselves as a mid-segment brand. When the ASPs started moving up, they did not face the challenges of being caught unaware or with the unacceptability in higher price segments like in case of Xiaomi and Realme. The offline presence today suits them with the ASPs moving up and customers now wanting to touch, feel and experience the device before buying it. This is unlike the low-end devices which were being bought basis price specifications comparison from online.

Vivo has been amongst the top 3 brands for quite some time consistently. Obviously the question here would be, what is it that Vivo has done better to be able to move ahead of the pack and give direct competition to a much-established Samsung pushing it to No. 3 in 2024 after Xiaomi took over as No. 1?

1. The top thing that comes to mind is the retail connect they have right from the top level. Even their MD worked very closely with the retailers and associations like AIMRA to ensure they were heard, with issues if any, resolved. One may not be able to say the same for the top leaders of many brands who may have had a direct connect with their distributors but not with the retailers. As one of the leading retail outlets said, it’s all about the culture the MD has brought to the brand and the team. Humble, grounded and committed. They will only say yes if they can honour a commitment otherwise say sorry.

2. In case of Vivo, a change in distribution partners has been a rare occurrence, giving them the confidence to go all out in the market.

3. The way they keep a watch on partner’s inventory, giving him time to clear out old stocks before the launch of new models etc.

   
   

If there is a brand that can give run for its money to Samsung in offline, it’s Vivo. That too on less than half the width of distribution of Samsung.

It’s not that the offline channel is totally satisfied. They still feel iQoo, a sub-brand of Vivo, should be made available offline – a demand pending with the brand for quite some time now.