Dual branding: Chinese companies bet on smartphone sub-brands

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NEW DELHI: Chinese smartphone players in India have initiated a second wave of sub brand launches betting on dual branding to accelerate growth by differentiating across price segments and distribution channels, industry executives and analysts said.

Poco, RealMe, Innelo are the new sub-brands of established ones such as Xiaomi, Oppo, and new player iVoomi, respectively. Huawei has been operating with its sub-brand, Honor, for some time in India. A similar attempt by homebred handset makers a few years back had failed but the latest wave of sub-brand launches is being led by Chinese companies who have already cornered a bulk of the smartphone market in the country. Aclearer distinction between the parent and the sub-brand, a more evolved ecommerce market and the required financial muscle to make investments into marketing and R&D at a time consumers are spending more on devices could make the strategy tick this time around, analysts said.

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Ashwin Bhandari, CEO, iVoomi India, told ET that the handset market is getting very focused, with each price category demanding different requirements on both channel and the product front.

IDC India associate research director (client devices) Navkendar Singh said that more companies are launching subbrands in India to find a different positioning in the market, without letting it impact the parent brand.

“Poco by Xiaomi is for ‘affordable flagship’ in the mid premium, RealMe in the budget segment by Oppo. This allows for a different marketing and go-to-market strategy without any overlaps or confusions with the marketing strategy of the parent brand, both internally and externally (customers, channel etc),” Singh said. In the past, domestic players like Lava and Micromax had tried their hand at sub-brands through Xolo and Yu, respectively, but failed. China’s Lenovo too couldn’t keep up with the market pace with its dualbrand strategy with Motorola.

iVoomi’s Bhandari said those brands were very early in the market with an underdeveloped ecommerce space. Now, the market has serious players in ecommerce that are helping handset companies succeed with their dual-brand strategy. Chinese brands Huawei and Oppo have already seen success with their sub-brands Honor and RealMe, respectively, with their online-first focus. Their growth has prompted China’s Xiaomi and Hong Kong-based iVoomi to launch their own respective sub-brands – Poco and Innelo – in India ahead of any other market.

And Vivo too is open to launching a sub-brand, Nipun Marya, head of the smartphone company’s marketing strategy, told ET.

“We will always look at various things in the market. We see what other brands are doing…,” he said.

What’s more, Micromax is also trying to revive its defunct Yu brand and planning to launch new handsets. Counterpoint associate director Tarun Pathak said one reason for the sub-brand strategy is to enter new price segments or alternative distribution channels the parent brand has found challenging to penetrate.





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