Every day on my commute to work, I make it a point to take a look around the compartment of the Mumbai local train that I travel in for about five minutes. I observe what my fellow commuters are doing, as they spend their hour or so waiting for the train to pull into their station. While some may enjoy staring out the window and enjoying Mumbai s seaside weather and breeze, the majority of the people in my compartment have their eyes firmly fixed on their smartphones. Once I ve had my fill of daily observation, that s where my eyes go too. Also Read - Phones launching next week: Pixel 6 series, Samsung Galaxy S21 FE, Motorola Edge S, moreAlso Read - Phones launched last week: Realme GT Neo 2, Moto E40, OnePlus 9RT, and more
Observing a bit more closely, I noticed one more thing: the phones that I see in the hands of commuters are dominated by a handful of brands, namely Samsung, Oppo, Vivo and Lenovo. Sure, the odd iPhone, OnePlus, Xiaomi and Motorola do make appearances often enough, but the trend is largely in favor of smartphones that you can walk into your neighborhood mobile dealership and buy over the counter. Also Read - Best laptops to buy under Rs 35,000 in October 2021: Asus VivoBook 15, Avita PURA, more
If there s one key take-away from this, it s that despite the fact that online conversations tend to focus on swashbuckling online-only brands that offer competitive pricing, India remains a market that is dominated by offline sales. And while readers like you may consider what reviewers like me have to say about the latest Xiaomi or OnePlus smartphone, a huge chunk of buyers take their advice from the shopkeeper standing behind the counter.
And it s here that brands such as Oppo and Vivo are succeeding. Varun Singh, Market Analyst, IDC India says In the offline channel, while the Indian vendors were struggling, the Chinese vendors like Oppo and Vivo pulled in strong demand largely due to their strong hold on distribution and better partner incentive schemes and promotional activities during the slowdown (post demonetization). By offering attractive incentives such as higher commissions or rewards to mobile dealers, Oppo and Vivo have made these dealers ambassadors of their brands, who will often suggest those smartphones to buyers. It also helps that a lot of those stores have prominent Oppo and Vivo branding outside and inside, which puts the brand name firmly in the mind and vision of the customer.
Indeed, according to IDC s latest data, the top five smartphone vendors in India include four brands that have a strong presence in the offline segment, with Samsung, Vivo, Lenovo and Oppo maintaining a stronghold on the market. The single online-only brand in the segment Xiaomi finds its place in the top five thanks to strong sales of the excellent Redmi Note 4, which is the top-selling smartphone model in India in the last quarter. Indeed, this speaks volumes of Xiaomi s ability and dominance in the growing online segment, but the recent launch of Mi Home and a renewed focus on building offline presence shows that even online-first brands recognize the importance of having an offline presence in India.
There is of course another key argument here, one that continues to bother smartphone enthusiasts and reviewers like me. This was something explained perfectly in the form of a chart by Xiaomi Vice President and Managing Director for India Manu Kumar Jain at a recent event in Bengaluru.
The chart shows how the traditional distribution model drives up the pricing of the phone, as there are so many more players in the channel that must earn their share of the profit. Xiaomi states that its direct-to-consumer distribution system for online sales and Mi Home allow it to sell smartphones to buyers at prices that are much lower than what an offline brand may ask for. This explains how Xiaomi and Motorola are able to sell well-built, well-specified smartphones at competitive prices in India, that offer buyers serious value-for-money, while a similarly priced device available offline offers much less in the form of hardware, build and specifications.
A direct comparison can be made between the OnePlus 3T and the Oppo F3 Plus. While both phones cost about the same price, the OnePlus 3T offers a better SoC, more RAM, better build quality and software that receives development support. OnePlus online-only sales model is the reason for this, while Oppo must sell a lower-end device at the same price in order to make a profit thanks to the distribution channel that makes it easily available to buyers in stores everywhere. This is the key reason for me to recommend an online-only brand s device over that of an offline-present brand, as the benefits of the distribution savings are passed on directly to the consumer.
Having said that though, it s important to remember that India is a big country with a consumer base that isn t quite as developed as it needs to be to function purely on the online-only model. A lot of buyers are uncomfortable with paying by credit and debit cards. While cash-on-delivery is offered by most big e-commerce retailers, many buyers also prefer to touch and feel the product before committing to buy it. And while more and more people have access to the Internet where they can read on the latest smartphones, many still prefer to take their advice from those that they view as the true experts: the mobile dealers who work with smartphones all day, every day.
This means that buyers will continue to walk into the store, try before they buy, pay with cash and walk out with their new smartphone in their hand, because of the inherent trust they have on this traditional way of buying things. Even if they aren t getting quite as good a smartphone as the one they could have bought online, it matters very little to them in the long run. Because even in a country where the Internet and literacy are growing rapidly, more people are finding the ability to afford smartphones and online-first brands continue to dominate the conversations, the reality remains that offline is king.