The first report of a Samsung Galaxy 7 phone exploding came in August 2016. These were not taken seriously. By September 2016 however, everyone knew there was a problem. The U.S. Federal Aviation Administration started issuing warnings on the 8th of September. On October 6th a South West Airlines flight had to be grounded.
This is how the crisis affected Samsung and its market share in India.
They lost 5% market share in absolute terms before winning some of it back over the last quarter or more.
But every crisis has a beneficiary.
In this case, those beneficiaries were Vivo & Oppo. All that money spent on ads seems to be working. The growth trajectory of both companies has been nearly the same. Much of their budgets have gone toward sponsoring the Indian Cricket team and the Indian Premier League. Oppo, for example, spent a whopping Rs. 1079 Crores to buy the rights to sponsor team India for five years (VIVO had bid Rs. 768 Crores for the same deal). VIVO is reportedly paying Rs. 100 Crore a year for the right to sponsor the IPL.
In case you’re wondering, both companies are owned by the same parent — BBK Electronics. (FYI — They also own OnePlus).
What happened to the Desi Boys & everyone else?
Micromax was the first one to disrupt the Indian market. They showed the world that it’s possible to offer a low cost smartphone and build a brand and distribution in this segment. But they’ve lost market share over the last one year. Almost 25% of what they held. Indian customers are notoriously brand sensitive when it comes to smartphones. These are the first status symbols we acquire. Is Micromax a victim of its own success?It’s entirely possible that they became the stepping stone to a XIAOMI or a VIVO.
It’s also worth noting however that since the actual size of the market is increasing — it’s possible for a company to lose market share but grow revenues.
Thanks for your time,
Ashish
- Team KG
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You can reach me on ashish@kalagato.com
