Chinese company Gionee to stop making feature phones

Abhishek Law Kolkata | Updated on January 10, 2018

Alok Shrivastava, Director, Business Intelligence and Planning, Gionee India

Aims to up smartphone market share in North and East

Chinese smartphone maker Gionee has decided to discontinue its feature phone segment and focus on the smartphone range. Even in smartphones, the stress will be on the mid to mid-premium categories only.

Typically, Gionee’s offerings are priced at ₹8,500-20,000.

Market sources say that nearly 60-70 per cent of the Indian smartphone sales are in the mid to mid-premium segment where most of the Chinese, Korean and Taiwanese players are jostling for supremacy.

“We do not see much future in the feature phone business. So we decided to discontinue with the same,” Alok Shrivastava, Director – Business Intelligence and Planning, and Regional Director - North and East, Gionee India, told BusinessLine, adding that Gionee will not play in the entry-level category (sub-₹7,500 segment).

The firm is looking to up its ante in strongholds that include the North and East Indian markets. The company has earmarked a marketing spend of over ₹350 crore across these regions for the year.

Out of the earmarked ₹750-crore national marketing budget, nearly 20 per cent (₹150 crore) will be channelised for the East, Shrivastava said. Another 30 per cent (₹225 crore) will be for the Northern region.

For Gionee, the Eastern region includes West Bengal, Odisha, Bihar, Jharkhand and the seven North-East States. The North includes Rajasthan, Delhi-NCR, Punjab, Uttar Pradesh and Haryana.

According to Shrivastava, the company will look to up its market share in smartphones across these regions and be among the top three brands within a year.

For the East and North-East, in particular, it is targeting 2.5x jump in sales and 20-25 per cent of the market share within a year. Against a national market share of 6 per cent, the firm’s market share in the East is a little higher at 10 per cent.

“We intend to be among the top three brands within a year’s time. In most of the markets, we will be more than doubling our sales,” he said.

Samsung continues to be the most dominant player in the Indian smartphone market with Vivo, Oppo, Xiaomi and Lenovo (including Motorola) being the other major brands.

Aggressive marketing

Incidentally, Chinese vendors such as Oppo, Vivo and Xiaomi have for quite some time now been flexing their marketing muscles. Gionee, one among the first Chinese smartphone brands in India, has been aggressively pushing itself through sports sponsorship. For instance, it was the title sponsors for Kolkata Knight Riders and Royal Challengers Bangalore in the Indian Premier League.

Apart from a host of new launches, Gionee will also increase its offline footprint by ramping up distribution, greater presence in multi-brand outlets and also through its own standalone brand stores.

No deep discounting

The brand operates primarily through offline channels as it does not believe deep discounting (as is the case with online players) to be a sustainable model.

“Online is a price game, which we aren’t into. We are looking to invest in retail assets and in the offline channel which still dominates handset sales,” Shrivastava said, adding that deep discounting in the online space affects the brand.

“From a brand point of view, we do not see much benefit in deep discounting in the online space.”

Published on September 25, 2017

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