Inherent strength of offline retail will remain intact in long-run: Vivo

The pandemic may have impacted the offline retail business of mobile phone brands for a few months over the last two waves but the inherent strength of brick-and-mortar retail will remain intact in the long-run, Vivo India Brand strategy Director Nipun Marya said.

Speaking to PTI, Marya said retail stores were closed for two months last year, and about one-and-a-half months this year amid the last two waves of the pandemic.

"...as long as COVID is in our lives, and if we keep seeing waves like we saw a few months back, people will be hesitant of going to shops, and businesses on and off will suffer, including offline retail mobile phone business...from a long term point of view, however, I feel that the inherent strength of offline still remains intact," he added.

Vivo, which has a presence across about 70,000 retail points in the country, sees most of its sales coming from offline retail.

Marya noted that Vivo has delivered one lakh smartphones between May 10 and June 10, through its Vivo Smart Retail (VSR) programme.

The "click-to-mortar" model was introduced by the company last year amid the pandemic. Under this model, Vivo accepts product-related queries from customers, and passes on the leads for sales to retailers that are in the vicinity of the customers, helping customers buy products from the safety of their homes.

"...a programme like VSR is a big boon for both customers as well as retailers, because customers are getting the comfort and security of buying from the nearby retailer, and the retailer is getting business. So it's a win-win," he said.

While there will be customers who are very comfortable buying phones without touch and feel, a bulk of the sales are still expected to happen through offline retail, Marya noted.

Talking about the market, he said the industry is expected to see similar levels of growth in 2021 as last year.

"We clearly lost two months last year. This year also, so far, I think we have lost nearly one-and-a-half months. So, if there is no further wave in that case, at least my sense is, the market and other things will pretty much be at the same level as last year," he said.

Smartphone shipment in India grew a record 23 per cent in the March 2021 quarter to reach over 38 million units. Xiaomi led the market with a 26 per cent share, followed by Samsung (20 per cent share), Vivo (16 per cent share), Realme and Oppo (26 per cent share each).

India's smartphone shipments declined by a modest 4 per cent to over 150 million units in the pandemic-hit year of 2020, with high consumer demand post lockdown and new use cases like work from home arresting a further fall.

Another report pointed out that online channels accounted for about 45 per cent of the mobile phone sales in the country in 2020.

On challenges like shortage of components and higher shipping charges, Marya said there is pricing pressure at a macro industry level.

Vivo is yet to take a decision on price hike and is monitoring the situation closely, he added.

Vivo, which is among the top three smartphone brands in the country, is also looking at bolstering its 5G portfolio in the country.

"We have already announced that any phone that is Rs 20,000-plus, will be 5G and we will continue to do that...so we will continue our focus on 5G because we know now and in the coming times, customers will demand 5G. So if customers' requirement is 5G, then we must supply it," he said.

The company is also looking at bringing 5G devices under the Rs 20,000 band - which comprises more than 80 per cent of the market. Marya, however, did not disclose the timeline for bringing a 5G handset in the under Rs 20,000 range.

The company currently has about 5-6 models that are 5G-enabled.

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