Editor | Su Huai

As vivo attempts to establish itself as a "world brand" and spends heavily to become an official partner of the 2024 European Cup, it has unexpectedly encountered a backlash in India.

Image Source: Weibo @vivo

It is reported that vivo India is currently negotiating with the Tata Group of India to acquire a majority stake and establish a joint venture to comply with the Indian government's requirements for Indian nationals to serve as executives and localize the marketing network.

The Indian government requires the Tata Group to hold at least 51% of the shares of vivo India, and also requires the acquired joint venture to be led by local manufacturers, with the marketing network also being localized.

For vivo, at a critical moment when it is poised to "dominate" the Indian market, it is imperative to reduce operational uncertainty. At this time, the localization plan proposed by India has stabbed a "steady, accurate, and ruthless" blow.

01

The Curse of "India's Number One"

After years of deep cultivation, vivo has come infinitely close to the position of "India's Number One".

According to the latest data released by Counterpoint Research, India's smartphone shipments in 2023 reached 152 million units, which was the same as in 2022. Among them, vivo became the fastest-growing top player, with its market share increasing from 15.8% to 17%, only 1% behind Samsung, which ranked first.

In the first quarter of this year, India's smartphone shipments increased by 8% year-on-year, and the shipment value increased by 18% year-on-year. Among them, vivo accounted for about 19% and took the first place in sales, but in terms of sales revenue, Samsung still ranked first with a share of 25%.

Regarding the winning formula in India, vivo attributes it to "localization".

Image: vivo India Store | Source: Internet

According to local Indian media reports, vivo's "Make in India" plan intends to invest 75 billion rupees, with the first phase of 35 billion rupees to be completed in 2023. After the completion of the second phase of investment, the production scale of smartphones will be close to that in China, and vivo will become one of the mobile phone brands investing the most in India.

At the same time, vivo has also transplanted its successful offline sales model in the Chinese market to India, and currently has about 70,000 stores in India, with 90% of sales completed through these offline channels.

At such a critical moment, news of vivo's forced localization in India spread rapidly, sparking various speculation from the outside world. In fact, for Chinese mobile phone brands, the title of "India's Number One" seems to be a curse.

Before vivo came close to the position of "India's Number One," Xiaomi (01810.HK) had already established a "leading" position in the Indian market.

In June 2014, Xiaomi entered India through an exclusive partnership with local e-commerce giant Flipkart, becoming Xiaomi's first stop in overseas markets. At that time, Samsung was still the dominant player in the Indian mobile phone market. Hugo Barra, then Xiaomi's Global Vice President, said that "India has the potential to become Xiaomi's second-largest global market and make a significant contribution to Xiaomi's global shipments."

In the fourth quarter of 2017, Xiaomi surpassed Samsung for the first time to become the top smartphone brand in India. From 2020 to 2022, Xiaomi's (including its sub-brand POCO)