‘We intend to have a leaner marketing model’

Realme, which recently emerged as an independent company, will opt for a “leaner marketing model” as it forays into the offline space.

Having begun its India journey as an ‘online-only’ sub-brand of Oppo, the company has now been spun off into an independent entity. In fact, Realme has sold over four million devices since the India launch in May last year, with an average selling price of ₹10,000.

While the online presence will continue, the company plans to expand offline and be present in 150 cities by the end of 2019. The offerings will range between entry, mid-range and the mid-premium segment (priced between ₹5000 and ₹ 20,000).

According to Madhav Sheth, CEO, Realme India, the plan is to keep a tight leash on marketing costs, despite the fact that the company intends to operate through the offline channel too.

Sources say Realme operates with a tight margin of around three per cent.

Distribution costs and dealer commissions (in case of an offline channel) account for around 10 per cent of a mobile phone-maker’s cost. This apart, companies spend on advertising and brand ambassadors. Standalone stores are another major cost.

Obviously then, for Realme, multi-brand outlets will be preferred over standalone ones, while the products and users would be the brand ambassadors.

“We intend to be a small organisation with a leaner marketing model. The idea is to spend a fraction of costs (on marketing), as compared to competition,” Sheth told BusinessLine. “The focus is on having customer touch-points for users to experience the product,” he said, adding that standalone stores can come when the company has numbers.

Winning trust offline

Market sources say offline players need to win distributors’ and dealers’ trust, who have been jittery with the recent shake-ups in the channel. According to Faisal Kawoosa, Founder and Key Panelist at Techarc – a technical analysis, research and consulting firm – there could be a scenario with Realme opting for an offline-online mix wherein the demand is generated online through the flash sales model . Subsequently, the devices are released offline. “It is interesting to see as to what model they go for since marketing costs will be low,” he said.

Realme’s Sheth says the offerings will be stocked primarily because “customers would ask for a Realme” at shop counters. The brand is “already” generating “a good number of queries” offline, he claims.

Nearly 10 per cent of the company’s sales have come from offline channels since the launch in January 2019, across 8 cities and 4500 shops.

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