Online vs Offline Sales: Do Smartphone Brands Know Their Buyers?

Brands like Vivo and Gionee have proved that in order to make money in the long term, you need to have a shop.

When Pankaj Awasthi, 28, working professional from Delhi decided to gift his dad a Xiaomi Redmi Note 3, luck deserted him. So, he was left with no option but to buy him another phone from a mobile shop. He bought a mid-range phone from Gionee for all his efforts.

The scenario facing Pankaj has become a common story for a lot of buyers, who still can’t bear the agony of online flash sales, and are forced into buying from physical store, especially when the requirement is immediate.

And that’s exactly where most of the so-called Chinese brands like Vivo, Oppo and even Gionee to some extent are making the moolah at the cost of a Micromax or Lava.

Over last year, these brands have become a solid contender in the entry-level to mid-range segment, priced up to Rs 30,000.

Your best case in example would be the OnePlus, which manages to offer phones at affordable price point with flagship-level hardware, like the 3T.

Also Read: Review: OnePlus 3T Makes for a Worthy Mid-Cycle Smartphone Refresh

However, it’ll be interesting to see if the same brand could replicate its online sales model, by switching to the more dynamic and challenging offline market. More on that later.

But for now, let’s take a look at some of the numbers, which show a marked improvement in the scalability of brand with the buyers.

Chinese Hurrah

Chinese smartphone brands enjoy a market share of 27% in the Indian mobile space, which used to be 21% in 2015.

All this has been made possible by their strength and focus to offer the best to customers, at its most affordable level, with its share of smart marketing tricks.

Over 40% of the smartphones sold during Diwali in 2016 comprised of Vivo and Oppo among others

IDC Q3 2016 tracker

It also helps that most Indian brands have failed to match up to the product quality level of a Xiaomi or Lenovo, something which they can improve upon at a domestic level. And there’s no harm in accepting the gulf in India and China’s manufacturing ability, after all, Apple’s been making its iPhone there since the beginning.

Online or Offline?

I remember this question being put to a senior Motorola executive when they announced the first Moto phone in India few years back.

He was asked if Motorola would co-exist with its products online and offline, to which the spokesperson instantly said, we’ll be online exclusive, and after Xiaomi’s similar approach, everyone thought that’s the future.

But with brands like Vivo and Oppo, it is easy to see that in order to sustain in a hyper-competitive market like India, they could learn a few things by going old-school. And learn they have. Most analysts have said in recent times that switching to a 50-50 selling model would work in everyone’s favour. Just so that, we’re done with flash sales for good.

We’re seeing the change in trend now. Lenovo launched its offline variant for the K6 Power, Xiaomi has a Redmi 3S Plus too, and others like Asus are expected to follow suit.

There has been a rapid growth in terms of smartphones sold in Tier II and III cities, including online shopping. 

IDC Q3 2016 report

What this means is, you can’t limit yourself to a single platform. You can co-exist in both; online and offline. Buyers in India are fickle-minded, they won’t make a fuss for long, and move to the next available option.

So, a Xiaomi or Lenovo will lose out on every buyer that couldn’t wait for the sale to happen, and went for a Vivo or Gionee instead. It is time to get back to the basics of selling a product.

(With inputs from Economic Times)