Oppo And Vivo Scales Down Retail Expansion, Shifts Focus To Generating Revenue In India

Shares 1

Oppo and Vivo, the two Chinese smartphone brands took over the Indian smartphone market with its aggressive spending on marketing in order to reach more people through offline channels.

However, that is no longer the case. As per the reports, both companies are changing their strategy of reaching more places within India. Instead, the companies are now focusing on generating revenue.

Both the companies have even cut their spendings. Recently, Oppo and Vivo slashed margins for the retailers by about 40 percent. The move led to a backlash which resulted in the company losing about 10,000 sales outlets each.

According to various reports, both the companies had about 70,000 outlets each in the country before the margin cuts. And now, the number of stores selling their phones have fallen. Navkendar Singh of International Data Corporation says that Oppo and Vivo have rationalized distribution and are choosing to be available on fewer counters where they have strong visibility and sales.

As a result, Oppo has moved out of the top five rankings in the smartphone segment with a 4 percent share in January from 9 percent a year ago. In the same time, Vivo’s market share halved to 7 percent.

Vivo has already confirmed this change of strategy. The company’s spokesperson said, “regarding Vivo’s trade channel strategy, we have redeployed our distribution strategy with a focus on providing varied choices and experience for consumers.” The spokesperson also added that the company will focus more on online sales following the launch of its own e-store in India.

Some experts believe that Oppo and Vivo are now following the path of Xiaomi, another Chinese smartphone brand, which managed to dethrone Samsung from the pole position in the last two quarters of 2017. Xioami has a strong online presence and sells its devices offline through select retail partners along with its Mi Store.

Vivo has recently launched its official online store in India to sell its phones and accessories, marking the company’s entry in the e-commerce space. For the year 2016-17, Vivo India posted a loss of Rs. 111.66 crore while its sales grew six-fold to Rs. 6,173 crore. On the other hand, Oppo’s sales also surged seven-fold to Rs. 7,974 crore.