How Poco hopes to beat the biggies in the value smartphone segment
While Poco gained from its exclusive partnership with Flipkart initially, it may not be a viable retail strategy.
Launched as a sub-brand of smartphone giant Xiaomi in 2018, Poco — armed with a new logo and mascot — is attempting to create a distinct identity for itself of late. While its flagship device Poco F1 managed to create a flutter in the market, the brand has not been able to sustain the buzz. After almost two years of no activity, Xiaomi spun off its sub-brand into an independent company last year. In the later part of 2020, Poco got back in the game with new devices, slowly making some headway into the online smartphone market.
According to Counterpoint India’s Smartphone Monthly Model Tracker, Poco emerged as the third-largest online smartphone brand in India in November 2020, after Xiaomi and Samsung. The data from the research firm also shows that while Poco sold only 375,000 units in 2019, the sales of its devices skyrocketed to over 4.5 million in 2020.
Although Poco operated in the mid-premium (above Rs 20,000) segment initially, after separating from the parent company, its focus has now shifted to the value segment (below Rs 20,000), which constitutes 90% of the smartphone market in the country in volume terms. Biggies Xiaomi, Samsung and Realme have a tight grip on it.
To get a foothold in this segment that sees at least a dozen smartphones launches in a year, Poco has devised a “different” approach. It plans to have a lean portfolio and focus on the performance of the products. Last year, the brand launched the C, M and X series, and has nine devices in the market in total. Anuj Sharma, country director, Poco India, says the strategy is to “launch high-performance phones, unique designs, and sell them to the right set of people.”
Lately, the value segment has seen saturation in terms of specifications, experts say. Even though brands such as Xiaomi and Realme have made inroads into this market with their feature-heavy phones, their offerings are almost homogenous today. Poco hopes to leverage this opportunity by doubling down on features while maintaining competitive pricing. For instance, Poco C3 priced at Rs 7,499 offers 3GB RAM and a triple camera, whereas Realme C11, at the same price, offers 2GB RAM and a dual camera set-up.
In a bid to create distinction, Poco has opted for a mascot instead of “roping in a brand ambassador like every other smartphone brand”. Sharma says the company has also decided to stay away from premium properties like IPL, and instead continue investing in digital marketing.
While Poco gained from its exclusive partnership with Flipkart initially, it may not be a viable retail strategy. Industry watchers say, the company will have to expand to offline in order to gain scale. “A large group of consumers wants to see the product and experience it before making a purchase decision; therefore, an offline presence is vital,” says Prachir Singh, senior research analyst at Counterpoint Research.
The online channel gained ground last year, and now contributes about 45% to smartphone sales; however, the offline market still contributes the majority share.
Another challenge for Poco could be shaking off the ‘Xiaomi sub-brand’ identity, especially since it still offers after-sales service through Xiaomi’s over 1,500 centres. “It could be limiting for Poco as customers then assume both the brands to be the same,” says Navkender Singh, research director, IDC.
To gain higher brand salience, Poco, like other smartphone brands, may need to launch products in related categories like earphones and wearables. Apart from expanding its smartphone range in 2021, the company does plan to enter the truly wireless (TWS) segment, going ahead.