Chinese smartphone vendor Vivo wants to be listed among the top three smartphone brands in South Africa, targeting a sweet spot position in an extremely competitive market.
Tony Shi, general manager of vivo South Africa, spoke to ITWeb recently to discuss the local business strategy and how the brand has repositioned itself to keep up with competition.
Globally, Vivo falls in the top five, in terms of smartphone market share split. The company has an 8% global market share, based on Omdia’s preliminary research for the third quarter.
The other top global vendors − Samsung, Apple and Xiaomi − maintain the top three positions, while Oppo is at number four.
Tony Shi, general manager of Vivo South Africa.
In the second quarter, the International Data Corporation’s (IDC’s) Worldwide Quarterly Mobile Phone Tracker showed that Vivo shipped 21.2 million smartphones globally.
South Africa’s smartphone market has historically been dominated by Samsung, Apple and Huawei, with the likes of Honor, Xiaomi and Oppo joining the ranks in recent years.
However, the market seemed to open for a new number three after Huawei was banned from using Android’s Google Mobile Services, with some players jostling for the top three spot.
In 2019, Shenzhen-based Huawei was placed on a trade blacklist that restricted American companies from doing business with the major provider of network equipment and smartphones. The sanctions hit Huawei hard, since it relied on Google services and other essential technologies for its handsets.
According to Shi, in 2023, Vivo decided to diversify its local product strategy by including the medium and flagship range, selling on contract via the network operators.
“After that, our share has increased year-on-year. Based on business growth, we are now in the top four brands running on the Android [operating] system. With these achievements, we’ve increased our investment in the market, doing lots of marketing and working with our partners.”
After entering the local market, Shi said Vivo always considered how to learn from other brands. “With growth across all the networks, we want to be among the top three smartphone brands.
“Currently, we already have all our products on sale across the networks, and we’re launching flagships, mid-segment and entry-level products for the massive market.
“With our product strategy, we’re covering all the price points, from R2 000 to over R40 000. We’re providing consumers with a wide-ranging selection of devices and believe we can achieve top three Android brands very soon.”
Vivo’s product line-up inside the Global Corporate Exhibition Centre in Shenzhen, China. (Photograph by Simnikiwe Mzekandaba)
BBK, Vivo’s predecessor, was founded in 1995 in Dongguan. The Vivo brand was officially launched in 2011, marking the release of its first mass-produced smartphone, the Vivo V1, which featured an in-display fingerprint sensor.
Since then, the smartphone brand has amassed a global footprint of over 500 million users across 60 countries and regions, including South Africa. The brand first entered the local market in December 2019.
In South Africa, Vivo has partnered with all four major networks – Vodacom, MTN, Cell C and Telkom – alongside retail channels like TFG, Ackermans, MRP, PEP and Game, to sell its devices.
ITWeb was invited to attend Vivo’s product experience and the launch event of the X500 series in Shanghai, China last month. The X500 series – the X500, X500 Pro and X500 Pro Max – is Vivo’s latest flagship line-up that will be rolled out locally in November.
The smartphone maker also unveiled some smart devices, like the Vivo Watch 6 with a built-in eSIM and the Buds Clip.
For South Africa specifically, Vivo plans to bring the standard X500 and X500 Pro Max.
The new handsets come with features such as Zeiss high motion photography, 8k Native Live, Zeiss APO super telephoto and large sensor with gimbal-level stabilisation, including add-ons like the telephoto extender kit and instant shooting screen.
Speaking at the launch event, Huang Tao, Vivo vice-president and vice-president of product, said the X500 series signals the company’s next imaging decade, adding that the new devices “capture cinematic footage at the touch of a button”.
Shi concurred that Vivo’s flagship X range targets to improve camera experience generation by generation.
The standard Vivo X500 handset. (Photograph by Simnikiwe Mzekandaba)
Much like its competitors, Vivo has a broad product portfolio that includes internet of things devices, wearables and earbuds.
In China, the company has also rolled out a foldable smartphone range, competing with the likes of Samsung, Huawei, Honor and now Apple.
However, the company has, for now, ruled out launching foldables in the local market, Shi told ITWeb.
The key reason, he said, has to do with the increase in memory costs, particularly witnessed this year. “The memory costs make the pricing of products high. I think this year is not the right time to launch these products locally.
“With our growth in this market…and when the price drops and we can give South African consumers a better offer, we will launch these products also.”
According to the IDC, foldables and trifolds are becoming critical for an industry that has plateaued and needs meaningful innovation to motivate upgrades and drive value.
However, rising memory costs are putting pressure on profitability across price segments, with the impact particularly pronounced in more price-sensitive categories.
Nabila Popal, senior research director for worldwide consumer devices at IDC, states that memory costs are up nearly 300% from a year ago, accounting for over 65% of BOM at the low-end.
“Q2 confirms exactly what we predicted: this is not a uniform downturn; the memory crisis is favouring premium players and punishing vendors exposed to the low end.”
The Vivo X Fold 6. (Photograph by Simnikiwe Mzekandaba)