Chinese smartphone makers Oppo and Vivo are currently in the top five in the Indian market, accounting for 17% of the total market share. As more than 40% of its profit share paid to Indian handset retailers has recently been reduced, sparking strong opposition from many cellphone retailers and chain stores.
According to a report in the Economic Times of India, Oppo and Vivo have each lost about 10,000 retailers. Indian handset industry executives said Oppo and Vivo each have about 70,000 retailer partners in India before cutting their profits. Affected by the lower profit share, the number of retailer partners in both companies in India will also be further reduced.
India's mobile phone chains, including Sangeetha Mobile, Big C, Lot Mobile, Poorvika, Mobiliti World and Hotspot, have reportedly stopped or even reduced their focus on Oppo and Vivo smartphones. Oppo and Vivo originally offered 23% to 25% profit sharing to Indian mobile phone chains and 15% to 16% profit sharing to independent mobile handsets. After declining profits, Oppo and Vivo's profit sharing for mobile handsets in India dropped from 14% to 15% and the share of retail outlets offered to independent handsets dropped to 5% to 6%.
Mobile phone chain Sangeetha Mobile has stopped selling Oppo and Vivo smartphones in Tamil Nadu due to profit issues. Subhash Chandra, the company's general manager, said: "Oppo and Vivo offer different profit sharing to handset distributors in different Indian states, which is a headache for cross-border retailers The problem. & rdquo;
Oppo India spokesmen confirmed reports of a change in the profit sharing of handset dealers and a decline in the number of co-distributors. The spokesman said some retailers have been unable to sell the company's smartphones after the introduction of the country's commodity tax and service tax. He also said that Oppo's strategy in India has shifted to mid- to high-end equipment as the cooperation with some retail stores has been discontinued due to disappointing sales.
"Each market has a different policy, profit sharing depends on the dynamics of the market. All smart phone manufacturers in the Indian market are adjusting for profit sharing, all of which are based on the company's health. We think the company will become healthier and more efficient, "said Oppo India spokesman.
Vivo India spokesman said the company's retail network has not diminished, and the company plans to add a new retail network in India this year. "Last year, we both saw revenue growth and market share growth. According to statistics provided by market research firm Counterpoint Research, Vivo V7 + accounted for 40% of the smartphone market with a retail price of Rs 20,000 to Rs 25,000 in November last year. We plan to further build this year's growth momentum, "he said.
The chief executive of an Indian handset retailer said Oppo and Vivo were forced to cut retail profits in India because of the pressure to make money. "After gaining a certain share of the market, they moderated the high investment modeled on their strategy in China. But the Indian market is different from the Chinese market, where the market share of both companies has started to decline, "he said.
Over the past three months, Oppo and Vivo have substantially reduced their marketing efforts for outdoor, television and print media advertising in India. According to data provided by Counterpoint Research, Vivo accounted for 9% of the Indian smartphone market in Q3 last year, up from 5% in the same period of last year; Oppo's share in India increased from 4% in the same period of last year to 8% .