Smartphone maker Vivo is looking to tap pent-up consumer demand as India opts for a staggered exit from the lockdown. Among its plans for the year are new business models across its offline retail partners — which include SMS/Facebook generated orders — while focussing on mid-premium and premium phone launches.

The second largest handset-maker in India (after Xiaomi) does not have a presence in the premium handset segment priced above ₹30,000. Vivo’s offerings range between ₹7,000 and ₹30,000.

According to Nipun Marya, Director, Brand Strategy, Vivo India, entering the premium segment remains its focus this year even as it consolidates its position in the entry, mid and mid-premium segments with new launches.

“There are some plans in the ₹30,000 segment. As the situation becomes normal, we will take a call on it. We are going ahead with our R&D in the other categories like wearables. But the focus is on entering the premium segment in mobile phones,” he told BusinessLine during an interview.

Premium handset sales account for 3-4 per cent of smartphone sales in India.

Sources indicate that there can be an upwards of 10 per cent decline in smartphone shipments this year.

Entry-level smartphones are expected to decline in the near term, while demand is likely to shift to the second part of the year. Even if the situation stabilises by mid-year, people may hold off purchasing until the festival season, research firm Counterpoint said in a report.

Production resumption

Vivo’s plant at Greater Noida restarted production on May 8 at 30 per cent of its capacity, with 3000-odd people. Market sources maintain channels already have 10-15 days of inventory spreading across distributors and retailers. The inventories have already started moving in green and orange zones.

“The immediate focus is also to get back on track,” Marya said.

However, according to analysts, handset makers will face workers’ issues as reverse migration has happened. Migrant workers will take time to return to work, especially across North India, which houses some of the major manufacturing facilities.

Channel continuity

Analysts further say offline channels (shops), that account for nearly 65 per cent of smartphone sales in India, continue to be affected. In the red zones, delivery of non-essentials is suspended.

Incidentally, Vivo has a strong presence in the offline channels. And the brand is already working on new business models to ensure continuity.

Under the ‘Vivo Smart Retail’ model, the handset maker will accept product-related queries from customers, and pass on the leads for sales to retailers in the vicinity of the customer. Right now queries are generated through SMS. In future these will be extended to social media platforms and website-based ones.

E-commerce sales will continue, but mobile buying will continue to be driven by the ‘touch-and-feel’ factors, Marya said, adding that Vivo will maintain price parity between channels (online and offline).

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