April 2020. It seemed like an April Fool’s prank. “Vivo overtook Samsung for the first time in India," declared Canalys. In its quarterly smartphone pecking report released in April 2020, the global technology market analyst firm highlighted something that might have been branded absurd a year ago. Vivo, Canalys underlined, grew its shipments by nearly 50 percent, and emerged as the second biggest player in the first quarter of 2020 (January-March). The Chinese smartphone major notched a market share which was a tad below 20 percent. Contrast it to the pecking order which reigned supreme during the first quarter of 2019. Vivo: 12 percent Samsung: 23 percent. A drastic change in Vivo’s fortune in twelve months baffled the onlookers. “Can the Chinese upstart take on the South Korean giant or is the performance just a flash in the pan," was the larger question that begged for an answer. Industry experts, however, were busy answering another interesting question. “Vivo’s victory is bitter-sweet," Canalys’ analyst Madhumita Chaudhary sounded a word of caution in her post-mortem of the quarterly report that stunned the pundits. The high volume notched by Vivo, she explained, was mainly due to planned stockpiles ahead of the Indian Premier League (IPL). However, with the pandemic playing a spoiler, IPL getting postponed, and a huge inventory in the offline channels getting blocked, Vivo’s blockbuster party was all set to get gate-crashed. “Vivo will struggle to see a quick sell-through when the lockdown lifts," the analyst noted. The prophecy came true. In the second quarter of 2020 (April-June), Samsung boomeranged from 16 percent to 26 percent, according to Counterpoint Research, another global technology market research firm. The Korean darer slipped to its regular standing of third in the pecking order. In January 2022, Vivo pulled out of IPL title sponsorship, and, over the next few quarters, its market share dropped and eyeballs vanished. Though the relentless challenger kept hunting for another coup—there were some close moments such as 17:15 in favour of Samsung in the third quarter of 2021, and 19:17 in the second quarter of 2022—the adamant Korean zealously guarded its ranking. Despite a flurry of feisty onslaughts by the Chinese, nothing changed.
Look at the volume share. From 53 percent in the first quarter of 2023, it has jumped to 63 percent in the corresponding quarter of this year (see box). “Vivo’s diversified portfolio and its spread across price segments—especially the mass and mass-mid segment—have ensured its sustained play," contends Navkendar Singh, associate vice president, (client devices & IPDS) at IDC India. The phone maker’s key focus has been on growing the mass market, and it has lined up more launches in the Rs 10,000 to 20,000 bracket over the next few quarters. “It has the right model mix, and channel strategy to be amongst the leaders in upcoming quarters as well," reckons Singh, who is quick to add that the Chinese brand was able to navigate the regulatory headwinds better than its counterparts. “Though scrutiny by the Indian government did impact the performance of the Chinese brands, Vivo was able to maintain its play," he says.
Streamlining local operations also played a role in pushing sales. Singh explains. Vivo’ s state teams, which acted as independent companies, were rejigged and brought under the parent umbrella, which helped in close monitoring and running a well-oiled and centralised machinery. What also helped in outperforming rivals was keeping a sharp focus on offline (brick and mortar) medium, which has always been a strong point for the Chinese player. A strong offline presence, prioritising the offline retailers and distributors with timely price corrections, schemes and offers, and support to end-of-life models--the ones which are in the final stages of being discontinued—did their bit in ramping up sales.
Pathak points out a lesser-talked-about and underplayed factor that helped Vivo in its furious march. “It has had encouraging success in cracking the premium—entry as well as mid-tier—market," he says. It’s not easy for a company, especially one that has built its foundation and appeal as a mass-budget brand—to graduate to the premium market and give a fight to the likes of Samsung, OnePlus, and others. Vivo’s success in India, he explains, must be seen in the global context as well. In the first quarter of this year, the Chinese phone maker topped the Indonesian smartphone market by cornering a 19.2 percent volume share. Samsung came fourth in the pecking order and trailed Xiaomi and Oppo, which occupied second and third place, respectively. Back home in India, handset experts reckon that Vivo stands a strong chance of unsettling Samsung’s regime. The catch, though, is the resolution of its protracted legal tussle with the government agencies. “We have seen what happened with Xiaomi," says an analyst requesting anonymity. “From a high of 31 percent in the first quarter of 2020, it has slipped to 15.8 percent in the first quarter of last year," he says, adding that the brand did manage to add on to its market share in the corresponding quarter of this year by notching up 18.8 percent. “Vivo’s future depends on how well it plays the game of Chinese Checker with the Indian authorities," he says. The brand has done well in crafting and executing a strategy that revolves around the principle that online is vanity, offline is sanity and the hybrid model is the king. “The question now is can Vivo get its pieces in order," he asks. The jury is still out.