May, 26 2016

Gionee targets Rs 8,000 cr revenue this fiscal

The company has doubled its marketing budget to Rs 500 crore this year from a year back, which includes Rs 200 crore for a rebranding exercise.

By Franchise India Bureau
Gionee targets Rs 8,000 cr revenue this fiscal

Gionee, Chinese handset is shifting its strategy by building a portfolio of phones to cater to local consumers and will spend aggressively on marketing in a bid to grow its revenue to Rs 8000 crore in revenue for this fiscal year than the Rs3,000 crore last year.

On the same note, Arvind Vohra, Gionee's Head of India operations said that over a period of time the brand has realized that the Indian market is different and can't just replicate the China market strategy and bring handsets that are designed for the latter. Thereby, they are now bringing devices that are designed just for the Indian consumers.

The company has doubled its marketing budget to Rs 500 crore this year from a year back, which includes Rs 200 crore for a rebranding exercise.

Vohra also said that in the last three years they have earned around Rs 6,500 crore revenues and are now looking to do more in this fiscal year (ending March 2017).

Gionee cited Gfk data to show that it had around 3.8 per cent value market share in the last fiscal year, which had increased to 4.5 per cent in the first quarter. In comparison, Samsung has a 48.6 per cent share, according to Gfk.

The brand has changed it strategy to take a segment-centric approach. The handset maker, which was earlier focusing on mid-to-high range handset device, is now aggressively tapping the entry-level - Rs 5,000-Rs 8,000 - and the mid-level - Rs 8,000-Rs 15,000 - smart phone segments.

Vohra said that while the entry-level segment will drive volume for them, the mid-level category will drive profitability, given it's a high value segment in the market, adding that smartphones priced above Rs 7,000 will be 4G VoLTE enabled.

The brand is planning to launch around 16 new smart phones, including 5-6 flagship models, is aiming to sell around 8-10 million mobile handsets by this fiscal end.

Earlier, Gionee was planning to apply for a single-brand retail license, following the easing of rules, has now scrapped the plan, and it will expand its offline business through franchise route. Vohra also confirmed the same.

The company's products are sold through multiband stores and 50 Gionee-branded franchises. It plans to increase the number of franchisee outlets to 250 by December. The Shenzen-based mobile phone maker will also open 300 new exclusive service centers in India, taking the total count to 500 centers.

Gionee's strategy is quite successful. They started with tier3 and 4 markets initially, and invested heavily in offline. However, due to focus on certain price segments, they were unable to drive the volumes. The new strategy may help them drive volumes, said the senior analyst Tarun Pathak.

Related: Why Loofre is investing millions in expansions?

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