The lull in Chinese domestic market forced them to a situation where the factory shut down was imminent. At that point of time Oppo and Vivo entered Indian Smartphone market without any knowledge of Indian domestic market adoption trend.
Most the management were from head office landed them in tight spot and they failed to gain any traction in the first year of operation.
Post first taste of failure both the companies quickly changed their strategy and inducted seasoned Indian Professionals to represent them in the market place whereas head office kept the key of major decision making process.
Being cash rich company at corporate level, both the organization embarked aggressive advertisement plan with open budget to ensure that the awareness about their brand reaches to masses even though their product line caters mid to high end Smartphone user segment.
The flood of sponsorship of different event worked and at the same time, they successfully placed their device in offline channel which propelled extraordinary growth in volume sale.
Brands which struggled at one point of time are now flooded everywhere at very competitive price point. For that both the organization team member deserve appreciation.
But at the same time, one should also consider the profitability.
In intensely competitive Smartphone segment where net margin ranges between 1.5% to 10 % given the brand and what premium brand can command. Sustained profitability is big question mark. In my point of view both Oppo and Vivo gained market share but don't think they ever made profit in their Indian operation.
At the end of the day Profitability count for the shareholders compared to volume. It's the right time for both the organization to recalibrate their business model to ensure profitability as brand recognition is already in place.
In point of view, human memories are very short when it comes to brand and moves to other brand in no time. We should learn that from brand like Ericsson handset, Nokia, Siemens etc. How many of us remember the innovators of mobility world.
It will be interesting to see how both the brand do when they reduce buying Smartphone user by throwing advertisement $. As conclusion they can't keep throwing advertisement money and will be forced to reduce it at one or another point of time and at that point of time real adoption trend can be analysed. Till then we should not expect them to be profitable.
