All of us buy smartphones, or at least chances are high that you have bought a smartphone at some point if you're reading this article. Earlier people would visit stores such as Radio Shack or Carphone warehouse or a carrier store to buy a smartphone. With the rise of e-commerce, the trend of buying smartphones shifted to e-commerce websites and parts of Radio Shack being bought by Sprint and and Standard General makes it all the more clear (if it wasn't already) that most future sales of smartphones would occur online. In fact sales of most stuffs to be frank.
Now slowly this trend is even coming to India. The meteoric growth of Flipkart and Snapdeal are enough proof that e-commerce websites are here to stay and just like the west even in India a lot of stuffs are being bought online, particularly smartphones. Although convenience has its part to play, the major reason why most Indians buy smartphones online is because of the deep discounts provided by e-commerce websites.
Along with growing sales of smartphones online, a new trend started emerging. This was the trend of "online exclusive smartphones". What this trend basically meant was that the particular smartphone model would only be available online and have no presence at physical retail stores. Most times the smartphone would also be available only with a particular e-commerce website. This trend was started by India's largest online e-commerce website Flipkart and Motorola with the launch of Motorola Moto G.
Motorola Moto G would be available only online and only on Flipkart(e-commerce website). Leaving a few rare cases, Motorola's Moto G was the first phone to be an online exclusive model and exclusive to a particular e-commerce website i.e Flipkart.
A)For Motorola the benefits of going online exclusive were obvious -
1. No logistics hassle -
All shipments and deliveries were handled by Flipkart themselves. Motorola never had to indulge into distribution and the related costs. Plus Motorola Moto G was Motorola's come back in India after a period of around 4-5 years which meant most distribution channels and retail partnerships the company had in India were now dead and needed to be built from scratch which would take a lot of time and resources.
2. Wider reach -
Internet is the fastest medium to reach an audience. Take my article for example. The moment I hit the publish button, you can read this irrespective of whether you're in the house next to mine or in a totally different continent. Same applies for smartphones sold online. The moment a smartphone is listed online, its easy for someone to hit the buy button on it irrespective of where they were living in India. On the other hand this kind of pan-India reach at the same time wasn't possible with the traditional retail system. It would take weeks for a smartphone to be available all over India in the normal physical store/retail system.
3. Savings on retailer cuts/incentives provided by e-commerce websites -
When Motorola Moto G was listed on Flipkart, obviously Motorola had saved itself the cuts which go to retailers since the sole retailer selling Motorola Moto G on Flipkart was Flipkart's own retail arm WS retail. Also since Motorola had struck an exclusive deal with Flipkart, its entirely possible that Flipkart might have even subsidized Moto G or done some marketing for Moto G with its own pocket. Although this is just speculation on my part.
B)Motorola's Moto G had everything in place to become a hit. I would list them down
1. When Motorola Moto G had launched, e-commerce in India had already gained a lot of traction and people were increasingly buying smartphones online.
2. By being priced at around $200, Moto G's price was among one of the most preferred price brackets.
3. Despite being priced $200, Moto G had reasonable specs such as a quad core Snapdragon 400 processor from Qualcomm, 1GB of RAM, HD display, 2000 mah battery. It presented one of the best value for money proportion in its price segment
4. Motorola was already a well know brand to Indians.
5. Motorola promised prompt updates and a stock like Android UI. When Motorola Moto G was launched, stock Android and rapid updates were only provided by Nexus which costed around $450-500 (Nexus devices and even Chromebooks are more expensive in India compared to Western countries)
All the five points mentioned above led to Motorola Moto G being a huge success in the Indian market. The response Motorola got was mind blowing. The starting day stock got over within seconds. Although this left certain customers frustrated, Motorola was able to get the supply to meet the demand within a week or so. The phone sold very well and the optimizations Motorola made with the smartphone's software fetched it very good reviews from not only consumer but reviewers world wide.
The effects of Motorola and Flipkart partnership
1. Impact on competition
2.Other manufacturers entering the online only market
3. Rivalry between e-commerce websites
4.Traditional manufacturers changing their strategy
1. Impact on competition -
Motorola Moto G had started eating into the sales of smartphones from its peers such as Samsung and Micromax. The phone was a super hit and shook the entire Indian smartphone market.
Although Motorola Moto G was a super hit, competitors did not pay much attention to it, maybe a few price cuts here and there but no direct attack at Motorola Moto G.
After the launch of Moto G, Motorola launched the Moto X( a $500-600 smartphone) in India which did not sell as well and for reasons stated below
1. The Indian market for smartphones costing more than $500 is much smaller compared to the same for smartphones costing $100-250.
2. Specs of Moto X weren't all that "eye-popping". It must be noted that the Moto X did provide some really fantastic user experience buy its specs " on paper" were disappointing.
3. When it comes to the high end market, brand and marketing matters a lot, Samsung and Apple had a huge lead over Motorola in these departments.
Brisk with the success of Moto G, Motorola followed the same strategy, although this time attacking the most hotly competed segment which was the $100 smartphone market. This time around Motorola launched the Moto E, a $100 smartphone which just like the $200 Moto G, was one of the best smartphones in its class. It sported a dual core Qualcomm Snapdragon 200 processor, 1 GB of RAM, qHD screen, 1980 mah battery. Motorola once again maintained the same promise of a stock UI and regular updates.
As expected the smartphone sold very well. For the first week demand was as usual higher than supply and customers were a little annoyed but within a week Motorola got its act together and the Moto E started being available on a 24x7 basis.
This time though the competition responded. The $100 price segment was essentially the bread and butter for Micromax, Lava, Karbonn and a lot of other Indian vendors. In order to stop Moto E from eating away their lunch, local manufacturers launched their own Moto E competitors.
Following the launch of Moto E,
Micromax launched Micromax Unite 2 which had specs highly similar to Moto E and launched during May 2014, the same time as Moto E. Pricing of Micromax Unite 2 was highly similar to Moto E.
Lava launched the Lava Iris X1 in response to Moto E which again had specs highly similar to the Moto E, launched during May 2014 and was highly similar in pricing.
Karbonn had launched the Karbonn Titanium S1 Plus which again had specs highly similar to the Moto E, same pricing and launched during May 2014.
The success of Moto G and the consequent launch of Moto E had made local rivals churn out some really well specced smartphones in the $100 category. This in turn lead to better choice for end users and after a long time had the $100 smartphone category seen such excitement.
2. Other manufacturers entering the online only market -
Amazing growth for Motorla -
Q3 2013
Q3 2014
Motorola's first smartphone which was the Moto G launched in Novemeber 2013 and Moto E launched during May 2014 - The two smartphones that contributed the most to Motorola's sales. The above chart from Counterpoint shows the smartphone market share details of India during Q3 2013 and Q3 2014. Between Q3 2013 to Q3 2014, Motorola gained 4.2% market share of the Indian market from 0%. This was highly impressive for the following reasons -
1. Motorola's smartphone were sold exclusively online which limited their reach to Tier 2 and Tier 3 towns where internet access is less prominent.
2. Motorola had one of the slimmest portfolio in the entire Indian smartphone market.
Motorola had clearly proved that their is a place for a new player in the Indian market despite not having any retail presence. Motorola's success in the Indian market prompted many more manufacturers to enter. A lot of these manufacturers were new manufacturers who did not have the capital to invest in distribution and retail. Motorola's success was what prompted these new players to come in India.
Most notable of the new entries was Xiaomi. The Chinese manufacturer came to India with the block buster Mi3 which sold for just $200-250 and literally provided the same specs as something like the LG G2.
Xiaomi conducted certain flash sales for Mi 3 and then discontinued the model. Xiaomi also selected Flipkart as its sole online partner ""initially"". After discontinuing Mi3, Xiaomi launched the much awaited Xiaomi Redmi 1S. The Xiaomi Redmi 1S was sold in flash sales. During every flash sale 40-60k handsets were put up on sale which got sold out within seconds.
This was also the time when Asus launched its Zenfone line of smartphones with prices ranging from $100 to $200 and all of them were again exclusively sold on Flipkart.
Meanwhile Google also wanted a piece of this action. So local manufacturers and Google teamed up together to launch Android One. Micromax, Karbonn and Spice all three launched their Android One handsets namely Micromax Canvas A1, Karbonn Sparkle V and Spice Dream Uno. Initially all three handsets launched exclusively on three e-commerce websites. Amazon got Micromax Canvas A1. Flipkart got Spice Dream Uno and Snapdeal got Karbonn Sparkle V. There were plans to bring Android One handsets to the retail market but they got cancelled because of opposition from retailers.
3. Rivalry between e-commerce websites -
Now while all this was happening, only company was getting a clear advantage and that was Flipkart. Flipkart had manged to bag exclusivity for Xiaomi, Motorola and Asus. The public was going bananas on these smartphones and Flipkart was slowly being the go-to destination for smartphones.
The Indian e-commerce market was nascent and every e-commerce website was fighting for consumer mindshare. Of course then its no doubt that rival e-commerce websites were taking full note of Flipkart's strategy.
Consequently Amazon had also started courting vendors for exclusive devices. This led to Amazon gaining exclusive rights to sell the products of local vendor Micromax's Yu brand. Amazon was also able to be the exclusive vendor of the highly coveted One Plus One. Amazon was also able to obtain the exclusive rights of selling the Nexus 9 tablet just as Flipkart had grabbed the Nexus 6 as an exclusive. As of now Amazon would even be entitled as the sole seller of ZTE's Nubia line of devices.
4. Traditional manufacturers changing their strategy -
Another interesting phenomenon to arise out of all this has been the way in which traditional manufacturers have adapted themselves to counter the rise of online only brands such as Motorola, Xiaomi and One Plus.
Micromax, the second largest smartphone brand in India launched a sister company called Yu which was a direct competitio to Xiaomi's Mi. Just like Xiaomi, even Yu would sell smartphones online only, just that Yu had selected Amazon as its exclusive online partner while Xiaomi had initially selected Flipkart. Huawei launched it Honor series of online only devices in India exclusively on Flipkart and ZTE is about to launch its Nubia line of online only devices in India. exclusively with Amazon. Huawei, ZTE and Micromax were all traditional manufacturers in India which have adjusted their sales strategy to compete in the ongoing online only craze in India.
Conclusion -
Both Flipkart and Motorola changed the dynamics of the Indian smartphone market by a vast extent. Before the launch of Moto G, the Indian smartphone market was vastly dominated by Samsung and Micromax. Both Samsung and Micromax provided mediocre specs at best when it came to $100-$250 smartphones. Motorola changed that with the launch of Moto G for the $200 smartphone segment and repeated the same for the $100 smartphone segment with the launch of Moto E. Apart from this the successful partnership of Motorola and Flipkart prompted many more manufacturers to enter India. Flipkart's success also prompted Amazon to make such exclusive deals. It forced traditional manufacturers to change the way they sold smartphones.
As of today there are more online exclusive smartphones in India than I can count with my fingers. Yu Yureka, Xiaomi Redmi Note 4G, Xiaomi Mi4, Xiaomi Mi4i, Xiaomi Redmi 2, Moto G 2nd gen, Moto E 2nd gen, Moto X 2nd gen, Moto Turbo, Nexus 6, Nexus 9, Huawei Honory Holly, Huawei Honor 4C... I can go on. So many smartphones have launched every since Moto G's debut.
Most importantly the launch of Motorola's Moto G and Moto E on flipkat gave rise to so many other models and ultimately at the end of the day, the consumer has been the biggest beneficiary. So many models to choose from at such low prices and such awesome specs.
It wouldn't be wrong to term Motorola and Flipkart as revolutionists that changed the way smartphones were sold and bought in India. They changed the dynamics of the India smartphone market which was otherwise still stuck in the past.
Now slowly this trend is even coming to India. The meteoric growth of Flipkart and Snapdeal are enough proof that e-commerce websites are here to stay and just like the west even in India a lot of stuffs are being bought online, particularly smartphones. Although convenience has its part to play, the major reason why most Indians buy smartphones online is because of the deep discounts provided by e-commerce websites.
Along with growing sales of smartphones online, a new trend started emerging. This was the trend of "online exclusive smartphones". What this trend basically meant was that the particular smartphone model would only be available online and have no presence at physical retail stores. Most times the smartphone would also be available only with a particular e-commerce website. This trend was started by India's largest online e-commerce website Flipkart and Motorola with the launch of Motorola Moto G.
Motorola Moto G would be available only online and only on Flipkart(e-commerce website). Leaving a few rare cases, Motorola's Moto G was the first phone to be an online exclusive model and exclusive to a particular e-commerce website i.e Flipkart.
A)For Motorola the benefits of going online exclusive were obvious -
1. No logistics hassle -
All shipments and deliveries were handled by Flipkart themselves. Motorola never had to indulge into distribution and the related costs. Plus Motorola Moto G was Motorola's come back in India after a period of around 4-5 years which meant most distribution channels and retail partnerships the company had in India were now dead and needed to be built from scratch which would take a lot of time and resources.
2. Wider reach -
Internet is the fastest medium to reach an audience. Take my article for example. The moment I hit the publish button, you can read this irrespective of whether you're in the house next to mine or in a totally different continent. Same applies for smartphones sold online. The moment a smartphone is listed online, its easy for someone to hit the buy button on it irrespective of where they were living in India. On the other hand this kind of pan-India reach at the same time wasn't possible with the traditional retail system. It would take weeks for a smartphone to be available all over India in the normal physical store/retail system.
3. Savings on retailer cuts/incentives provided by e-commerce websites -
When Motorola Moto G was listed on Flipkart, obviously Motorola had saved itself the cuts which go to retailers since the sole retailer selling Motorola Moto G on Flipkart was Flipkart's own retail arm WS retail. Also since Motorola had struck an exclusive deal with Flipkart, its entirely possible that Flipkart might have even subsidized Moto G or done some marketing for Moto G with its own pocket. Although this is just speculation on my part.
B)Motorola's Moto G had everything in place to become a hit. I would list them down
1. When Motorola Moto G had launched, e-commerce in India had already gained a lot of traction and people were increasingly buying smartphones online.
2. By being priced at around $200, Moto G's price was among one of the most preferred price brackets.
3. Despite being priced $200, Moto G had reasonable specs such as a quad core Snapdragon 400 processor from Qualcomm, 1GB of RAM, HD display, 2000 mah battery. It presented one of the best value for money proportion in its price segment
4. Motorola was already a well know brand to Indians.
5. Motorola promised prompt updates and a stock like Android UI. When Motorola Moto G was launched, stock Android and rapid updates were only provided by Nexus which costed around $450-500 (Nexus devices and even Chromebooks are more expensive in India compared to Western countries)
All the five points mentioned above led to Motorola Moto G being a huge success in the Indian market. The response Motorola got was mind blowing. The starting day stock got over within seconds. Although this left certain customers frustrated, Motorola was able to get the supply to meet the demand within a week or so. The phone sold very well and the optimizations Motorola made with the smartphone's software fetched it very good reviews from not only consumer but reviewers world wide.
The effects of Motorola and Flipkart partnership
1. Impact on competition
2.Other manufacturers entering the online only market
3. Rivalry between e-commerce websites
4.Traditional manufacturers changing their strategy
1. Impact on competition -
Motorola Moto G had started eating into the sales of smartphones from its peers such as Samsung and Micromax. The phone was a super hit and shook the entire Indian smartphone market.
Although Motorola Moto G was a super hit, competitors did not pay much attention to it, maybe a few price cuts here and there but no direct attack at Motorola Moto G.
After the launch of Moto G, Motorola launched the Moto X( a $500-600 smartphone) in India which did not sell as well and for reasons stated below
1. The Indian market for smartphones costing more than $500 is much smaller compared to the same for smartphones costing $100-250.
2. Specs of Moto X weren't all that "eye-popping". It must be noted that the Moto X did provide some really fantastic user experience buy its specs " on paper" were disappointing.
3. When it comes to the high end market, brand and marketing matters a lot, Samsung and Apple had a huge lead over Motorola in these departments.
Brisk with the success of Moto G, Motorola followed the same strategy, although this time attacking the most hotly competed segment which was the $100 smartphone market. This time around Motorola launched the Moto E, a $100 smartphone which just like the $200 Moto G, was one of the best smartphones in its class. It sported a dual core Qualcomm Snapdragon 200 processor, 1 GB of RAM, qHD screen, 1980 mah battery. Motorola once again maintained the same promise of a stock UI and regular updates.
As expected the smartphone sold very well. For the first week demand was as usual higher than supply and customers were a little annoyed but within a week Motorola got its act together and the Moto E started being available on a 24x7 basis.
This time though the competition responded. The $100 price segment was essentially the bread and butter for Micromax, Lava, Karbonn and a lot of other Indian vendors. In order to stop Moto E from eating away their lunch, local manufacturers launched their own Moto E competitors.
Following the launch of Moto E,
Micromax launched Micromax Unite 2 which had specs highly similar to Moto E and launched during May 2014, the same time as Moto E. Pricing of Micromax Unite 2 was highly similar to Moto E.
Lava launched the Lava Iris X1 in response to Moto E which again had specs highly similar to the Moto E, launched during May 2014 and was highly similar in pricing.
Karbonn had launched the Karbonn Titanium S1 Plus which again had specs highly similar to the Moto E, same pricing and launched during May 2014.
The success of Moto G and the consequent launch of Moto E had made local rivals churn out some really well specced smartphones in the $100 category. This in turn lead to better choice for end users and after a long time had the $100 smartphone category seen such excitement.
2. Other manufacturers entering the online only market -
Amazing growth for Motorla -
Motorola's first smartphone which was the Moto G launched in Novemeber 2013 and Moto E launched during May 2014 - The two smartphones that contributed the most to Motorola's sales. The above chart from Counterpoint shows the smartphone market share details of India during Q3 2013 and Q3 2014. Between Q3 2013 to Q3 2014, Motorola gained 4.2% market share of the Indian market from 0%. This was highly impressive for the following reasons -
1. Motorola's smartphone were sold exclusively online which limited their reach to Tier 2 and Tier 3 towns where internet access is less prominent.
2. Motorola had one of the slimmest portfolio in the entire Indian smartphone market.
Motorola had clearly proved that their is a place for a new player in the Indian market despite not having any retail presence. Motorola's success in the Indian market prompted many more manufacturers to enter. A lot of these manufacturers were new manufacturers who did not have the capital to invest in distribution and retail. Motorola's success was what prompted these new players to come in India.
Most notable of the new entries was Xiaomi. The Chinese manufacturer came to India with the block buster Mi3 which sold for just $200-250 and literally provided the same specs as something like the LG G2.
Xiaomi conducted certain flash sales for Mi 3 and then discontinued the model. Xiaomi also selected Flipkart as its sole online partner ""initially"". After discontinuing Mi3, Xiaomi launched the much awaited Xiaomi Redmi 1S. The Xiaomi Redmi 1S was sold in flash sales. During every flash sale 40-60k handsets were put up on sale which got sold out within seconds.
This was also the time when Asus launched its Zenfone line of smartphones with prices ranging from $100 to $200 and all of them were again exclusively sold on Flipkart.
Meanwhile Google also wanted a piece of this action. So local manufacturers and Google teamed up together to launch Android One. Micromax, Karbonn and Spice all three launched their Android One handsets namely Micromax Canvas A1, Karbonn Sparkle V and Spice Dream Uno. Initially all three handsets launched exclusively on three e-commerce websites. Amazon got Micromax Canvas A1. Flipkart got Spice Dream Uno and Snapdeal got Karbonn Sparkle V. There were plans to bring Android One handsets to the retail market but they got cancelled because of opposition from retailers.
3. Rivalry between e-commerce websites -
Now while all this was happening, only company was getting a clear advantage and that was Flipkart. Flipkart had manged to bag exclusivity for Xiaomi, Motorola and Asus. The public was going bananas on these smartphones and Flipkart was slowly being the go-to destination for smartphones.
The Indian e-commerce market was nascent and every e-commerce website was fighting for consumer mindshare. Of course then its no doubt that rival e-commerce websites were taking full note of Flipkart's strategy.
Consequently Amazon had also started courting vendors for exclusive devices. This led to Amazon gaining exclusive rights to sell the products of local vendor Micromax's Yu brand. Amazon was also able to be the exclusive vendor of the highly coveted One Plus One. Amazon was also able to obtain the exclusive rights of selling the Nexus 9 tablet just as Flipkart had grabbed the Nexus 6 as an exclusive. As of now Amazon would even be entitled as the sole seller of ZTE's Nubia line of devices.
4. Traditional manufacturers changing their strategy -
Another interesting phenomenon to arise out of all this has been the way in which traditional manufacturers have adapted themselves to counter the rise of online only brands such as Motorola, Xiaomi and One Plus.
Micromax, the second largest smartphone brand in India launched a sister company called Yu which was a direct competitio to Xiaomi's Mi. Just like Xiaomi, even Yu would sell smartphones online only, just that Yu had selected Amazon as its exclusive online partner while Xiaomi had initially selected Flipkart. Huawei launched it Honor series of online only devices in India exclusively on Flipkart and ZTE is about to launch its Nubia line of online only devices in India. exclusively with Amazon. Huawei, ZTE and Micromax were all traditional manufacturers in India which have adjusted their sales strategy to compete in the ongoing online only craze in India.
Conclusion -
Both Flipkart and Motorola changed the dynamics of the Indian smartphone market by a vast extent. Before the launch of Moto G, the Indian smartphone market was vastly dominated by Samsung and Micromax. Both Samsung and Micromax provided mediocre specs at best when it came to $100-$250 smartphones. Motorola changed that with the launch of Moto G for the $200 smartphone segment and repeated the same for the $100 smartphone segment with the launch of Moto E. Apart from this the successful partnership of Motorola and Flipkart prompted many more manufacturers to enter India. Flipkart's success also prompted Amazon to make such exclusive deals. It forced traditional manufacturers to change the way they sold smartphones.
As of today there are more online exclusive smartphones in India than I can count with my fingers. Yu Yureka, Xiaomi Redmi Note 4G, Xiaomi Mi4, Xiaomi Mi4i, Xiaomi Redmi 2, Moto G 2nd gen, Moto E 2nd gen, Moto X 2nd gen, Moto Turbo, Nexus 6, Nexus 9, Huawei Honory Holly, Huawei Honor 4C... I can go on. So many smartphones have launched every since Moto G's debut.
Most importantly the launch of Motorola's Moto G and Moto E on flipkat gave rise to so many other models and ultimately at the end of the day, the consumer has been the biggest beneficiary. So many models to choose from at such low prices and such awesome specs.
It wouldn't be wrong to term Motorola and Flipkart as revolutionists that changed the way smartphones were sold and bought in India. They changed the dynamics of the India smartphone market which was otherwise still stuck in the past.
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