Gionee India: Hard focus

By Satrajit Sen , afaqs!, New Delhi | In Advertising | November 12, 2013
Chinese handset maker Gionee seeks a strong foothold in the Indian market as part of its goal to fortify its presence in Asia. The company had unveiled a TV campaign for its flagship product, ELIFE E6, in October and plans to spend Rs 40 crore on brand positioning and product promotion in this fiscal.

This might just look like yet another Chinese handset launching in India, but a close look guarantees that it is not one of the many. Chinese handset maker Gionee, which entered the Indian mobile market in March, has launched a campaign for its ELIFE E6 smartphone, conceptualised by Brand Curry Communications.


The Gionee ELIFE E6 smartphone

Arvind R Vohra

Subrata Chakraborty

Gionee seeks to gain a strong foothold in the Indian market as part of its goal to fortify its presence in Asia. The company had unveiled its flagship product, ELIFE E6, in October.

The TV commercial encapsulates various unique hardware features like the Glass Solution, DTS Sound, 1.5 GHz Quad Core Processor and Unibody design in a visual story. Speaking to afaqs! about the idea behind the campaign, Arvind R Vohra, managing director, Syntech Technology India, says, "The whole idea behind this launch is to go and talk about the hardware supremacy of the product. Our objective for Gionee was clearly to reach to the consumers at the national level so strategically we decided to push the phone through the hardware route. Because to enjoy the software features we need to have the right hardware to blend and give a world class experience."

Vohra further adds that after the company's launch in March 2013, it was a logical step for Gionee to push up its marketing efforts. "And, what better time to advertise a smartphone in India than the festive season? Besides we had to emphasise that we are not 'yet another Chinese brand' and thus we had given more focus on the hardware part on the TVC. We believe that the USP of a good phone lies in its hardware and that is the differentiator, while the software part is taken care of by the provider," he says.

According to Subrata Chakraborty, managing director, Brand Curry, the mandate from Gionee was to create the perception of a pedigree for brand Gionee at par with the global leaders in the handset category.

"This brand has a potential to redefine the concept of premium in the handset market. In the unlikely situation of any new software breakthrough in coming years, consumers are increasingly going to look for value proposition in the premium segment. Focus will be on hardware. Therefore marketers without any manufacturing base will find it hard to sustain premium positions. Also, Indian premium segment consumers are 'closet consumers'- looking for value even in the luxury segment. That will put pressure on existing premium brands to change the game and that creates a new segment for brands like Gionee, which is naturally equipped to play premium at a non-premium price band," he says.

The journey so far

Established in 2002, Gionee operates its overseas business through Syntech Technology Limited. Syntech Technology currently sells over 23 million handsets per year in China mainland and claims that it has been ranked second in the GSM market. Gionee has a special focus on research and development and has invested more than $160 million on it. It has an annual production capacity of 40 million units.

Vohra informs that since Gionee's launch in India, the smartphone market in the country has been growing at 20 per cent month on month and Gionee as a company has been growing three times that rate.

So far, 60 per cent of Gionee's sales in India comprise smartphones, while the rest is feature phones. Industry numbers indicate that among all phones sold in India, only 20 per cent are smartphones.

The company also has research and development centres in a number of areas including Shenzhen, Shanghai and Hangzhou. It embarked on its international expansion effort in 2011. Gionee products are currently sold in India, Bangladesh, Pakistan, Indonesia, Vietnam, Thailand, Malaysia, Russia, the Middle East and Africa.

The unique market

The emerging market - China, India and Brazil - have seen a tremendous growth of smartphones in the past two years. But market shares (in volume) of giants like Apple, Samsung and the erstwhile leader, Nokia, are falling rapidly in these markets.

A recent report by International Data Corporation (IDC) says Micromax has moved to the second spot with 22 per cent of the Indian smartphone market share and Karbonn is at third with 13 per cent. Global market giant Samsung is at 26 per cent, while Nokia has 5 per cent of the smartphone market in the country.

Experts believe that the bigger players are targeting only the tip of the iceberg, whereas the real market lies at the lower segment where people are still switching from feature phones to smartphones. The major chunk, thus, lies in the mid to lower segment of the market - the bottom part of the iceberg.

Well aware of the trend, Indian brands are keeping a foot in each market - the feature phone and the smartphone - so that their devices become a natural successor for those who switch.

Vohra says that the primary challenge for a new entrant in the smartphone market in India is to establish the brand. "There are so many products being launched in the market that it becomes imperative for a serious growth-oriented company to focus on branding right from the word go. Making a connect with the consumer right at the launch of the product is very important," he adds.

Vohra further informs that now onwards, there will be flagship product launches from Gionee every quarter and the company will invest a substantial portion of its marketing budget on this. "We will be launching other products meanwhile as well but every quarter we will come out with a big flagship product and our marketing efforts will be focused towards promoting those products," he adds.

Gionee is currently targeting a 10 to 15 per cent share of India's handset market in the next two years. The company will spend Rs 40 crore on brand positioning and product promotion in this fiscal year and also plans to establish 250 outlets across India that will be rolled out from January, 2014.

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