The Indian Premier League or the IPL may be an expensive platform to ride for brands but when it comes to the ambition of building a pan-India reach or recall among a targetted set of audience, there is no better alternative to it on TV yet. That is precisely the reason why handset maker Gionee, which now wants to build a larger presence against the non-metro strategy it followed so far, has taken bets on IPL as a sponsor and an advertiser. Gionee has inked a three-year sponsorship deal worth R55 crore with Shah Rukk Khan owned Kolkata Knight Riders.
With this, Gionee is the principal partner of the franchise and replaces Nokia, one of the first sponsors of this team. Additionally, the Chinese handset manufacturer will be spending R10-15 crore on advertising on television during the tourney. In total, Gionee is all set to spend R 60-65 crore in the IPL.
“We followed a non-metro strategy so far and it has worked in our favour. Now we want to take Gionee as brand to the next level and the IPL is the best platform,” says William Lu, president, Gionee Communication Equipment.
“Our association with Kolkata Knight Riders will not only allow us to converse with consumers residing in Eastern and North-Eastern parts of the country, we will get access to consumers living across the country,” he says.
In all the company plans to spend R225 crore on advertising and marketing this year. Last year, the company’s spend stood at R132 crore. And that gives an indication about the company’s expansion plans this year.
Gionee, which originally started as a supplier of mobile phones to home-grown companies like Micromax, started operations in India in 2013.
“One of the reasons behind our success is that we insisted on selling quality products unlike many other Chinese companies. While it took us about one and a half years to break the perception that Chinese means cheap products, today we sell 800 units a day,” said Arvind Rajnish Vohra, country head and managing director of the company.
Gionee says 2015 is a crucial year for it in India. After selling 40 lakh devices last year on a turnover of of R2,750 crore, the company is looking to double its turnover to about R5000 crore.
As part of the process, Gionee is putting up a plan for local assembling of products. The company, which plans to invest R300 crore in the exercise, has mandated Ernst & Young for the job. “To begin with, we will opt for contract manufacturing. Eventually, we would like to set up a manufacturing unit,” added Vohra.
In addition to assembling the units locally, the company is planning to expand its retail presence. Gionee which sells through mom and pop stores plans to increase the number of stores from 22608 to 40,000 by the end of FY 2015-16. Moreover, the company will be selling its phones in large format retail stores.
Refusing to divulge the names of the retail chain that the company has signed the deal with Vohra said that its handsets will be sold in 2000 retails chains across the country soon.
Gionee presently has 750 service centres across the country.
Interestingly, the company says it has no plan to sell its products online as of now. “I believe it is a short-cut that everyone wants to take now after Motorola. But people forget that Motorola could not afford to take the traditional distribution route, because of its legacy. People still remember the company’s failure to reinvent itself after the success of Moto Razr,” added Lu.
With a 4% market share presently, the company is looking at double digit growth this year.
Lu believes that the mobile handset market is expected to go through a change and when the time arrives Gionee will be ready to take on competition. “Currently India has Apple, Samsung, other Android phones and Chinese brands. But soon in terms of consumer preference India will follow the international trend that is, ‘Apple plus one’. So after an Apple handset, we want to be next preferred handset brand for Indian consumers,” said Lu.