CT News Bureau
Chinese smartphones Oppo and Vivo are cutting down the distributors and retailers promoting their phones in a turnaround of their technique of reaching even the smallest cities and cities as both cut spending and focus on generating returns.
“They have reduced channel margins and retail spends and now they’re going for more depth than width of distribution. They have also rationalized distribution and are choosing to be available on fewer counters than earlier where they have strong visibility and sales,” Navkendar Singh, research director at International Data Corporation India told in a recent interview.
The initiative has begun in New Delhi, where the two companies are cutting down in terms of the number of stores selling both these brands by almost a fifth to about 8,000. [Read the full report here]
A Vivo India spokesperson said, adding that the company will focus more on online sales following the launch of its own e-store in India, also added Vivo’s trade channel strategy, we have redeployed our distribution strategy with a focus on providing varied choices and experience for consumers. Hence, conforming the change in their strategy for more business and profit.
Oppo India spokesperson stated it’s enterprise as standard.“We would like to reiterate that our business operations are normal at present stage,” the spokesperson said in response to ET’s queries on whether its retail strategy had changed.
The preliminary effect of the pullback seems to be have been damaging. Oppo has moved out of the highest 5 rankings within the smartphone phase with a four% Share in January from 9% a yr in the past, whereas Vivo’s market Share halved to 7% in the identical time. The business will profit from the change in strategy within the medium and long run.
The Chinese smartphones manufactures are leading by an example created for them by their rival Chinese smartphone brand Xiaomi, which successfully removed Samsung from its top position for two consecutive quarters. The strategy was to be combative online and choosing select stores including ones called Mi Preferred Partners to sell its phones, even though it offers very narrow margins.
According to Prabhu Ram, head-industry intelligence group at CyberMedia Research, Oppo and Vivo, brands like Oppo and Vivo have been catering to the same customer segment, with more or less the same product specs and similar market approach. It also does not help that both the brands have had a singular focus on selfie smartphones.