At a time when companies across industries are betting big on e-commerce to revive sales, smartphone brand Vivo is bucking the trend. Nipun Marya tells Devika Singh why the company will continue to bolster its offline presence, what it’s ‘marketing 2.0’ strategy, minus IPL, entails, and more.
Vivo has largely been an offline centric brand. Given that more people are now preferring to shop online, will your strategy shift too?
In our estimate, although some share of the smartphone business has moved online due to the pandemic, a larger share of it remains offline. Before Covid-19, 35% of smartphone sales came from online; this has now increased to 40%. However, we would still like to focus on the offline channel, which contributes 60% share. Our competitors may be launching exclusive products online, but we have assured our retail partners that our pricing and product strategy are going to remain the same across channels.
We believe that the offline channel is king, as consumers like to experience the product before making a purchase decision. Hence, we have built an extensive offline network of 70,000 general trade stores, 4,000 modern trade outlets and more than 350 exclusive stores. Offline is where Vivo’s strength lies, and it will remain our priority. Our strategy is to be present at mass retail formats, while adopting concept selling at high-end retail points.
For consumers, who are unwilling to venture out, we have rolled out initiatives like Vivo Smart Retail, through which they can reach out to us through social media, text messages, or our website, and we connect them with Vivo retailers in their locality. We generated as many as 50,000 leads through this in the first two-three weeks of reopening; but as people are venturing out now, this number has come down. Our store sales are back to last year’s level, but the industry will see a de-growth of 10-13% this year.
So, will you launch more exclusive stores as was planned?
Before the pandemic hit, we had aggressive plans to reach 600 exclusive stores, covering 400 cities in India. The plan is still on but needs to be realigned, as some of the partners that were willing to make investments then are rethinking now. We are hopeful that we will be on track soon. The need for smartphones has increased even more with work-from-home and online education emerging as the new normal.
How have you recalibrated your marketing strategy with IPL out of the equation this year?
We had to drop out of the Indian Premier League 2020 due to geopolitical tensions; it was mutually decided with the BCCI that it was best to pause our sponsorship for the year. But Vivo will certainly be back next year as the sponsor of IPL.
For the last five years, our marketing strategy was focussed on building brand awareness. Going ahead, we would be looking at building brand image and investing in properties that would help us in this objective. While we are going to be present across media in ‘marketing 2.0’, we feel long-format videos work better for this purpose, and hence, digital and television will be the primary mediums.
Speaking of brand image…how are you addressing the ‘Chinese company’ identity in the Indian market, given the strong ‘vocal for local’ sentiment building up?
While Vivo started from China, our consumers today understand that we are an international brand present in 20 countries. We are also committed to the Indian market, and have announced an investment of Rs 7,500 crore, which will pan out in multiple phases. With the new industrial design centre, we will not only ‘make in India’, but design in India, too. The centre will drive research in 5G technology, camera innovation and software, with a focus on performance testing.
The first fully researched device at the design centre in India will roll out in 2021.
What’s the strategy behind foraying into the premium segment which is teeming with big global brands?
The competition is fierce in this segment, but there is room for innovation. For instance, our recently introduced X50 Pro, priced at around Rs 50,000, features a gimbal camera system. We are targeting tech enthusiasts with our new high-end devices. We will soon bring out a power-packed device in this range with one of the best camera capabilities in the segment.
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