BBK Electronics, the holding company of Vivo, Oppo, OnePlus and Realme, has been steadily increasing its market presence in India. According to Counterpoint Research, its share in the Indian market increased from 24 per cent in June 2018 to 30 per cent in June 2019. In fact, for the first time ever, the BBK Group replaced Xiaomi as the leader in the Indian smartphone market during April-June 2019. While the BBK Group held a 30 per cent market share (combined for all its four brands), Xiaomi held 28 per cent. This improvement in the BBK Group’s market position has come on the back of various initiatives, investments and strategies undertaken by its four subsidiaries in India.
A look at how the BBK Group has been growing in India through its four subsidiaries, the market strategies adopted by these brands and their future plans…
The BBK Group-owned premium smartphone manufacturer OnePlus entered the Indian market in 2014 and within a short span of time evolved into a market leader in the premium smartphone category. According to Counterpoint Research, OnePlus secured the top position in the premium smartphone segment (Rs 30,000 and above) with a 43 per cent share in market shipments during the second quarter of 2019.
As a practice, OnePlus has always introduced one model per year; however, this year it adopted a different strategy by launching two new models simultaneously, the OnePlus 7 Pro and OnePlus 7. The year 2019 also marks OnePlus’s entry into the ultra-premium segment (Rs 45,000 and above) with OnePlus 7 Pro. In this segment too, the company has reported impressive performance, capturing 26 per cent market share.
While the sale of OnePlus devices has been driven by online channels, the company plans to expand its offline presence through partnerships with brick-and-mortar stores. At present, OnePlus has tie-ups with the Tata Group’s Croma and Reliance Retail. It plans to open three new experience stores in India during 2019, one of which will be in Hyderabad. This is expected to help the company to forge stronger connections with its customers, better cater to their service requirements, and provide a superior buying experience. At present, OnePlus has experience centres in Bengaluru, Delhi and Chennai. Apart from this, the company is contemplating to strengthen its research and development (R&D) capabilities in India and in the process meet the local market requirements. Given that India accounts for a third of OnePlus’s business in terms of revenues and is its second biggest market in terms of volume, the company plans to introduce India-specific features in its models.
Oppo set its foot in the Indian smartphone market in 2015 and is among the top five players today. Oppo’s growth in India has been primarily driven by its innovative product portfolio. Since the beginning, Oppo has put in a lot of effort and invested considerably in bringing innovation to the market. In fact, this forms the bedrock of Oppo’s product strategy, which is based on a three-pronged focus on design, photography innovation and fast charging technology. Its focus on photography, especially selfie camera technology is what differentiates it from other brands and works as its unique service proposition, attracting more customers.
Of the 40 countries and regions that Oppo is present in, India is the biggest one for the company. Given its strategic importance for the company, Oppo has been investing significantly in enhancing its R&D capabilities. The company recently set up a greenfield electronic manufacturing cluster (EMC) in Greater Noida for manufacturing electronics and accessories locally. This centre is expected to receive an investment of around Rs 35 billion over a period of 5-10 years. Oppo aims to increase its share of revenues from online channels. To this end, the company plans to set up its own e-commerce site. The company has also worked out a strategy to give equal importance to its online distribution channels, leveraging its partnerships with brands such as Flipkart, Amazon, Paytm, Snapdeal and TataCliq.
Vivo forayed into the Indian smartphone market in 2014. Within a short span of four years, the handset manufacturer has become the fastest growing brand. According to a report by Growth from Knowledge, Vivo emerged as the fastest growing brand with 63.2 per cent year-on-year growth in value and 60.9 per cent year-on-year growth in volume in January 2019. According to a report by research firm Canalys, Vivo managed to double its growth from 2.1 million units shipped in the first quarter of 2018 to 4.5 million shipped in the first quarter of 2019. Vivo has attributed this growth to its marketing strategy and elaborate product portfolio. By launching devices in the less than Rs 20,000 segment (Y series) and the Rs 20,000-plus segment (V series), Vivo has been able to increase its market share from 6 per cent to 12 per cent during the period under consideration. It secured the third position in the market during the first quarter of 2019.
In order to support the surge in the volume of shipments, Vivo has been building a wide distribution network across the country, both online and offline. At present, Vivo’s distribution network is spread across 539 cities in 27 states and five union territories, and comprises over 550 service centres.
Going forward, Vivo plans to incur an additional investment of Rs 40 billion over a period of four years for setting up a new manufacturing plant on the Yamuna Expressway in Uttar Pradesh. According to Vivo, this will help the company expand its manufacturing capabilities and support its continued growth in the country. With the new facility, Vivo aims to double the current production capacity to 50 million units per annum. Further, like Oppo, Vivo also plans to launch a new brand.
Realme entered the Indian market in May 2018 and is a subsidiary of Oppo, which has 100 per cent stake in the company. Since its launch, Realme has been growing steadily and has already secured the fifth position among the top smartphone brands in India. During the first quarter of 2019, it had a 4.2 per cent market share. During this time, Realme shipped 1.3 million units. As per industry reports, Realme was the fastest brand in India ever to ship 8 million smartphone units within one year of its launch. Realme C2, which was launched in India in April 2019, crossed 1 million shipments within a couple of months. This growth has largely been driven by the company’s budget-friendly product portfolio and its market strategy, which primarily focuses on Tier 2 and Tier 3 cities. As per reports, Tier 2 and Tier 3 cities account for around 60 per cent of Realme’s total sales. Further, in terms of product mix, 55 per cent of the company’s total sales come from the sub-Rs 10,000 smartphone segment.
Realme aims to increase its market share to 12-15 per cent by end-2019. To achieve this, the handset manufacturer plans to sell 15 million smartphones this year. Realme’s sales have been primarily driven by online channels; however, these do not cater to several locations in the country. Thus, going forward, the company plans to strengthen its offline footprint so as to have a better market coverage. As part of this initiative, Realme will increase its offline presence across 20,000 outlets in the country, and set up six exclusive experience zones across the metros and 50 kiosks in upcountry locations. On the product offering front too, Realme plans to expand its portfolio by introducing newer models. However, it will stick to its earlier price points with Rs 10,000 being the average selling price of its smartphones.
The BBK Group, which entered the Indian handset market four to five years back through its subsidiaries, already holds the majority share in the market. Going forward, as each of these subsidiaries invest in growing their individual market share in the Indian smartphone market, the collective strength of the BBK Group will only improve. s