Handset manufacturers get aggressive with marketing strategies, made-in-China rules

In the last six months, there has been immense activity in the mobile handset market. Both the Chinese and the Indian players have turned quite aggressive with their respective marketing strategies. From roping in celebrities as their brand ambassadors, to associating with big ticket events and revamping themselves or making exclusive launches on the e-commerce platforms, this space has turned quite exciting.

In fact, the competition from the Chinese players is so intense that the Indian handset makers have started to face its heat. It is estimated that the ad spends from the Chinese players, including Vivo, Oppo, LeEco, Gionee and others have almost doubled in 2016. According to media reports, these players accounted for more than 55% of the total Rs 1,200 crore Smartphone advertising market in India.

This year, the market share occupied by emerging brands, (those brands that have been launched in India not before 2013) comprises of 25% of the total handset market. Giving an idea of how fast this market is expanding, the CMR report states that in 2015, there were 249 million handsets, out of which 39% were smartphones. In 2016, it is expected that there will be an increase of 3 million handsets to 252 million, out of which 52% will be smartphones. 

Increase in marketing spends & association with big-ticket events

As per Counterpoint Research report, top 10 Chinese brands capture 33% of the global smart phone market in Q1 2016. Rise of Chinese brands (e.g. Oppo, Vivo) at global scale outside of domestic markets could help in stimulating demand with beautiful designs at aggressive price points. The Chinese players are seen aggressively marketing on all the mediums with a high budget being allocated for it.

This year, Vivo, which was the title sponsor for Indian Premier League (IPL), has doubled their marketing spends from Rs 100 crore in 2015 to Rs 200 crore. For the first time, it also roped in Bollywood celebrity Ranveer Singh as the face of the brand. The market share of Vivo in the Indian smart phone market at the moment is 3.1%.

According to media reports, Gionee has a marketing budget of Rs 225 crore allocated for this year. Last year, it had replaced Nokia as the principal sponsor for IPL cricket team Kolkata Knight Riders (KKR) for a contract worth Rs 60 crore. This year, the brand also revealed its new identity under the 'Make Smiles' initiative and will be spending more than Rs 150 crore in the new branding identity. The brand currently has a 5% market share in the country.

Oppo’s aggressive marketing strategy in India has been spot on with its investments on cricket – it was one of the biggest spenders in IPL -- and television entertainment which includes sponsorship on Color’s prime properties like ‘Bigg Boss’, ‘Comedy Nights’ and ‘24’. It has a marketing spend of Rs 140 crore, according to media reports, which even mentions its association with the International Cricket Council (ICC) as its new global partner for four years, from 2016 until 2020. Oppo has committed to pay $34 million over the next four years to ICC. The brand has gained a market share to reach 4% of total smart phone share in 1Q 2016.

As per June CMR 2016 report, this year there has been seven new smartphones brands that have been launched so far, out of which LeEco is the only prominent among them. The brand aggressively spent on online and print in the first quarter of this year, around Rs 67 crore was used in the initial few months of its marketing.  

Handset manufacturers bank on celebrity power

Earlier this year, Oppo had roped in Bollywood actors Hrithik Roshan and Sonam Kapoor as its brand ambassadors. The brand had also signed on Yuvraj Singh, an ace cricketer and youth influencer, as our first sports ambassador for this cricket season. The brand believes that by leveraging partnership with these influencers, they have been able to get closer to the Indian customers and spread the love of taking selfies.

During the IPL season this year, Vivo launched their television advertising campaign, for which it got on board Ranveer Singh with the belief that it will enhance the communication between the brand and the target audience.

Gionee, which is the principal sponsor for team KKR during IPL, had released an advertising campaign during the tournament, talking about their new logo and the entire revamp.

Indigenous phone manufacturers, like Micromax and LYF have been quite prominent with their advertising campaigns. The brand which had roped in actor Hugh Jackman as its ambassador in 2013 went for a major rebranding exercise, including a new logo and a tagline this year. Recently, the brand has got comedian Kapil Sharma for a digital campaign ‘AngrezipantiKoAngootha’ to promote their Canvas Unite 4 series.

Mukesh Ambani owned Reliance Retail’s smart phone brand LYF, which has signed up sponsorship deals with three teams including Mumbai Indians, Rising Pune Supergiants and Royal Challengers Bangalore, released its first TVC during IPL. Featuring actress, Kangana Ranaut and players like MS Dhoni, Virat Kohli and Ravichandran Ashwin, the ad spoke about the unique features of the phone. The brand has recently got on board actress Priyanka Chopra to promote their Earth2 Smartphone series. A number of research reports state that LYF is India’s fifth-largest smart phone provider. With regard to the sale of LTE-enabled phones operating on 4G networks, LYF owns a market share of 12.6%.

Exclusive launches across e-commerce platforms

Moto G4 Plus was exclusively launched on the Amazon platform on May 17-18. It was the first exclusive Moto launch on the platform, player has never given up its gateway or homepage for any launch until now in India; and the co-marketing of the launch on digital in partnership with Ogilvy One was one of the most high-decibel campaigns ever.

The Indian handset manufacturers are facing a tough time from their Chinese counterparts, even their marketing spends are not as high as the Chinese players, who are gradually trying to enter the market with their low price points and multi-feature enabled phones. According to the CMR data, infact, at the entry level smartphone market, (comprising of phones below Rs 10,000), it is expected to grow at 44% as upgrade from feature phone to Smartphone is bound to grow this year. While the mid-tier (Rs 10,000-20,000) will stay flat and at the high-end price point (Above Rs 20,000), it is expected that there will be a growth of 19%. So there is a market for more low-end priced phones.

According to reports, a year ago, Micromax vaulted past Samsung Electronics to become India's leading Smartphone brand. Today, its market share has nearly halved, several top executives have resigned, and the company is looking for growth outside India. The company has recently undergone a major revamp, including a new logo and has been aggressively trying to market it. In terms of the total market (smartphones and feature phones), Samsung is leading the tally with 23.6% share, followed by Micromax (13.7%), Intex (13%), and Lava (12.6%) currently.

A Counterpoint Research report states that, in 2015, Chinese brands doubled their market share to 18%, taking away business from Indian budget phone makers such as Micromax, Intex, Lava and Karbonn. As a result of which, Indian brand’s market share fell from 48 to 43% last year. In order to tackle this, the Indian players have increased their marketing spends on digital ads to target the e-commerce savvy consumers, who come online first before purchasing a smartphone.

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