India’s sporting leagues and the Chinese invasion

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New Delhi | Updated: Jun 20, 2017 2:46 PM

For Chinese smartphone behemoths, tie-ups with Indian sports leagues are perhaps the right move to reach target audiences. But are they going overboard by splurging their ad dollars?

cricket, oppoLaunch of Team India jersey with Oppo as the sponsor .

In 2016, India surpassed the US to become the second-largest global smartphone market in terms of users. According to International Data Corporation’s (IDC) Quarterly Mobile Phone Tracker, the first quarter of 2017 saw a whopping 142.6% year-on-year growth of Chinese handset vendors with a 51.4% share of smartphones in India.

The rate at which Chinese handset brands are wooing Indian consumers is noteworthy. The rules of marketing for these brands to gain attention and desired results are simple: sign on icons like Amitabh Bachchan, Ranveer Singh, Alia Bhatt, etc and invest big bucks in categories like entertainment and sports, where the Indian masses unite. “Chinese handsets are aiming for augmenting their brand position and building credibility with Indian audiences for mass reach with high frequency targeting while still maintaining a premium positioning,” informs Raghav Anand, director — digital media and sports, media and entertainment, EY India. Sporting properties, especially cricket, meet most of these criteria and also help brands to align with Indian sentiments.

Vivo and Oppo, owned by BBK Electronics, lead the pack when it comes to associating with sporting properties/leagues in India. It was in 2015 when Vivo became a household name as it replaced PepsiCo as the title sponsor of the Indian Premier League (IPL). And this year, Oppo won the Indian Cricket Team sponsorship rights for a five-year period, starting April 1. This obviously comes with a high price tag. Oppo is shelling out `1,079 crore for the duration of its contract while Vivo’s deal for two years till 2017 was pegged at `200 crore — a 25% hike from what the previous sponsor PepsiCo paid every year for its association with the tournament.

Sporting ambitions

Consider how Oppo and Vivo were born in 2004 and 2009, respectively, but till 2015, were struggling to make it to China’s top five smartphone makers list. Their success today can be attributed to an unabashed focus on the youth, customising their strategies depending on the market needs, purchasing power, the geographical boundaries of a market,
demography, etc.

Smartphone brands need to be in touch with their TG constantly, especially in a highly-competitive market like India, and therefore, they bank on the most visible planks — cricket and movies.
Targeting the youth, Vivo and Oppo see sports as an ideal platform. “Vivo recovered from the after-effects of demonetisation with a high market share. We owe this to our aggressive offline distribution network spread across India and our association with the Indian Premier League,” says Vivek Zhang, CMO, Vivo India. So impressed was the brand with the results, that it tied up with Pro Kabaddi League (PKL) as the title sponsor for the next five years for Rs 275-300 crore. This makes it one of the biggest sporting deals in a non-cricketing event.

Cricket and now other sports leagues have been an integral platform for product launch commercials for a while. But moving beyond ad spots, brands across categories are increasingly associating as sponsors of sporting events. MEC managing director T Gangadhar believes that today, a brand cannot ignore these platforms if it wants a huge pie of the market. “It is not just Chinese brands, but every category wants to be associated with the IPL or other leagues because it lets them build trust and credibility in a short period of time,” he says.

Oppo sees such associations as experiences that go well beyond the product experience. Oppo India’s brand director Will Yang asserts, “Through associations with ICC and BCCI, we have managed to generate love for the brand.” The brand entered the Indian market with a 360-degree Cheer for India marketing campaign during the ICC T20 World Cup, 2016, which brought fans closer to the on-ground action and helped the brand to connect with several potential consumers.

Sensible move?

“In the past, FMCGs have invested heavily in sporting events but now, they have taken a backseat to smartphones and other B2C categories which can achieve huge volumes through these platforms,” notes Raja Lahiri, partner, Grant Thornton India LLP. But how much is too much? Is there an overkill happening here? Many experts believe that both Vivo and Oppo have gone overboard with their investments. The ratio between market share gains and money spent is far too lopsided. For instance, Chinese brands like Gionee and Huawei sponsored two IPL cricket franchises at a much lower price tag and got the desired visibility throughout the tournament.

Pointing at the controversy surrounding the IPL spot-fixing case and yet-to-be-implemented Lodha Committee recommendations and their implications, media planners say one must not forget why PepsiCo or Star India exited their sponsorship deals from IPL and the Indian cricket team, respectively. Therefore, one needs to keep the volatility of the market in mind before putting all their ad dollars in one kitty. Yes, for the multi-billion dollar investments which include warehouse, logistics and call centres, visibility is critical for a brand’s success but experts put in a word of caution on the speed and volumes invested. “There is no limit to the money one can invest, but how one uses it is important too,” points out Bino Isac, senior VP, Initiative.

Off the field

“In a fragmented media landscape, especially with the clutter in GECs, sports with its mass appeal has proven to be a good brand positioning and reach vehicle,” says Anand. But the focus on sports hasn’t diminished investments in the entertainment genre. “While GECs help us connect with our audience through TV, sports as a platform helps us engage on a very personal and experiential level. Both are equally important for us,” highlights Zhang. Vivo has tied up with various shows like Indian Idol, Yaadon ki Baraat and Dil Hai Hindustani besides award shows like SIIMA and IIFA. It has also partnered shows on Hotstar and Republic TV. Similarly, Oppo has been actively engaging its audience through Bollywood associations.

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Right from signing on Deepika Padukone to tying up with TV shows like Bigg Boss Season 10 and Koffee with Karan, it has tried all the tested tricks in the market. “It has to be a combination of sports and other high eyeball catching shows like reality shows on GECs or movies to maintain a balance,” sums up Isac.


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