Chinese smartphone makers are raking in money on brand presence and this is giving Indian counterparts solid competition

Chinese smartphone makers are advertising and marketing their brands in India like never before, giving Indian counterparts new goals for re-strategising and re-branding.

Brands such as Vivo, Gionee, Oppo and LeEco have increased their brand presence, majorly in offline medium than online and are even doubling the commission by 10 per cent.

"Indian players, which usually operate on 2-3 per cent margins, are facing tough competition from Chinese players. Further, online-only Chinese players are willing to sacrifice margins, even go into negative margins," Counterpoint Research senior analyst Tarun Pathak, told ET.

Not only this, the smartphone makers also paying charges between Rs 30,000 and Rs 31 lakh to mom-n-pop stores for redesigning their shop fronts and carrying the brand's name, which was done for free earlier.

"Tapping the retailers for a branding opportunity is a great idea which is proving to be effective for us," Vivek Zhang, chief marketing officer at Vivo India, told ET.

The Chinese presence has made Indian smartphone makers increase their budget for marketing and advertising as they have to match to survive the competition.

Indian players such as Micromax, Intex, Lava and Karbonn Mobiles have to compete aggressively.

"We've always maintained that significantly high advertising spends and trade margins to gain short-term market share is unsustainable - especially true in the current scenario where overall industry margins are under pressure," Shubhajit Sen, chief marketing officer at Micromax Informatics, told ET.

As of the quarter ended March 31, Chinese players had a 22 per cent share of smartphone sales, which is expected to increase to 25 per cent, said analyst Pathak.

"We have spent about $10 million (about Rs 67 crore) on marketing online and print in the first quarter this year, and we will spend similar amounts for quarters to come," LeEco's COO Atul Jain told ET.

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