Mobiles & Tablets

Gionee wants to double distribution network by this year-end

| | Updated on: Apr 15, 2015
BL16_IT_GIONEE_ARVIND

BL16_IT_GIONEE_ARVIND

gionee 1

gionee 1

Chinese smartphone-maker Gionee was among the first Chinese brands to enter the Indian market, followed by the rest of the clan.

According to Arvind Rajnish Vohra, Country Chief Executive Officer and Managing Director of Gionee India, the company’s revenues for this fiscal grew by nearly 550 per cent to ₹2,750 crore, up from ₹500 crore in FY-14. Gionee sold 4 million devices in the fiscal 2014-15 compared with one million devices in the year-ago period.

In an interview to BusinessLine , Vohra, who was recently in Kolkata, speaks on the market strategy, pricing, ramping up the offline presence and marketing. Edited excerpts:

What sort of market share is Gionee targeting in India?

We have a market share of 4-5 per cent right now. And we are targeting a 7- 8 per cent market share by this year-end.

You are operating in a market cluttered with brands. Why would someone go for Gionee?

Smartphone is all about consumer experience. And this means going deep down in product designing and working on the software. It is also ideal that you be a manufacturer (an original equipment maker). We have all these three qualities.

Moving ahead, we see that the market will have a lot of vacuum. And we are ready to fill up these vacated spaces.

So, what is the market segment you are targeting – replacement sales, first time users or those looking for an upgrade?

Today, people are looking to or want to upgrade from a feature phone to a smartphone. And, the requirement for this section is very limited. As a result, you see a clutter of brands here.

But when they upgrade to their second smartphone that is when they’ll start demanding from manufacturers. These demands will be phenomenal. And there you will see the number of players reducing.

So, it’s the second upgrade market which will give us our true place. Right now there is a lot of fight.

What is the sweet spot, in terms of pricing, that you are targeting?

Anything between $150-200 (₹9,000-12,000) is a sweet spot as of now. But going forward, when the second upgrades happen, then price points will move up to $250-300 (₹15,000–18,000).

People are right now happy with the offerings unless they look for brand value. So the moment the usage becomes a necessity, sales will pick up.

We expect things to change in another two years.

While most of your competitors have been gung ho about online sales, you have restricted presence. How is the strategy shaping up? Are you looking to change that in the future?

China is almost three years ahead of India in terms of online sales. But even then the online sales account for just 20 per cent (of total sales). However, the logistics and delivery mechanisms are much better than what they are in India. We will still continue to focus on offline sales here in India.

Can you elaborate about the offline distribution network and how you’ll ramp it up?

We currently have around 25,000 point-of-sales that include 2,000 shop-in-shop formats. This apart there are 5,500-odd in-shop promoters. We intend to double this network by this year. That is why you will see acceleration on the brand.

And how much are you spending on branding?

Compared to last year, we are ramping up our branding. From ₹132 crore last year, we will spend around ₹225 crore this year on marketing (a 70 per cent increase) along with big ticket sponsorships.

What about service centre issues?

At Gionee, we look to control our pass rate at 99.7 per cent. So the chance of failure is there to about 0.3 per cent. This apart, we have 750-odd service centres across the country. And, on our own, we have over-the-air (OTA) services through which we carry out bug fixing of the software. This helps us take care of software issues to a large extent.

Published on April 15, 2015

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