Mobile Industry’s Celebrity Brand Ambassadors – do they make sense anymore?

History

Long before Xiaomi and Oneplus, we had brands like Sony, Samsung and Nokia dominating the Mobile tech space around the globe. These brands were like any other brand spending truckloads of cash in marketing and advertisement. 10 years ago, that was the only way for them to reach the masses. Internet penetration was close to nil and they had to rely on TV and print media advertisements to sell their brand. Celebrity endorsements were a killer weapon and both the celebrities and the brands were benefiting out of it. But the cost of the products which they were selling to the consumers was high. The advertisement, endorsements and marketing costs were split into the cost of the mobile devices and consumers had to bear them.

Revolution

Then came along a revolution: Oneplus. This brand spun-off from another Chinese tech giant Oppo to be a different kind of an “Indie” brand. This brand promised flagship specifications at an affordable price and their only way of marketing was by word of mouth. This soon turned into an online community of Oneplus users and prospective users. A major percentage of the community members were geeks and nerds who were tech enthusiasts tired of spending loads of money for peanut specs. The community slowly gained momentum and turned into a revolution. This gave confidence to smaller tech brands and startups. Xiaomi, which was into MIUI Custom ROM development introduced its own hardware and little did we know that startup would take the tech industry by storm.

When Oneplus and Xiaomi came to India, they did not have any budget to spend on marketing. Yet they were successful because of the strong tech community, who were their brand ambassadors. Soon, their success motivated other brands to enter the Indian Sub-continent. Motorola a legendary brand in the mobile Industry was quick to amend its ways. With the launch of Moto G series, they became a trend-setter in the industry to launch affordable mobiles with good specs with online partner channels exclusively.

An expensive lesson learned

LeEco a.k.a LeTV came in with a bang. This brand was over-ambitious. They wanted to take down both OnePlus and Xiaomi. In the parallel track, brands like Samsung, Micromax, LG, HTC, Sony who were spending millions of dollars on celebrity endorsements and marketing were clueless on why they were slowly losing ground. A few brands were unable to mend their ways and started vanishing into the thin air.

Not realizing this, LeEco starting pumping money into marketing. They had devices with top-end specs at affordable price tags like OnePlus and Xiaomi, but they were also spending truckloads on marketing. They burnt the candle from both the ends and soon vanished into the thin air, faster than they came in. This sent a rude shockwave across the industry and everybody slowed down and became conscious.

The present state

OnePlus and Xiaomi also started spending on marketing and celebrity endorsements, but they were very cautious. They did not have long term engagements with such endorsements. They used the popularity of the celebrities in short spurts to give a push to their traction both online and offline.

Of course, it was still an expensive deal. Robert Downey Jr, Amitabh Bachan, Katrina Kaif, Ranveer Singh don’t come cheap. But they helped the brands to reach the masses outside the Online Tech Community. A hoarding with Katrina holding the Redmi Y3 to click a selfie would be much more effective and gain widespread momentum in marketing the product, compared to online reviews and goodwill of the community.

But that does not mean that the Online Tech Community is phased out. The internet penetration is high. Awareness about technology is at its peak across any city in India. A non-techy would look at that same Katrina Kaif hoarding and would come to know about the brand/product, but he or she would want to make an informed decision. The first thing they would do is to turn to YouTube to search for that model’s review. They would search for reviews, read about it. If the online community is not happy about the product, the consumer is not going to purchase it, just because Big B or Ranveer Singh is holding the mobile for a photo op.

Realme, a relatively new entrant, but one of the fastest-growing mobile brand is also adopting this strategy. Just like OnePlus, they spun-off as a separate brand from Oppo. In their initial stages, they recorded over 600% growth, without any big brand ambassadors. The success of their brand is mainly due to a widespread of products across every price bracket with high-end specifications. They have also adopted short term endorsement engagements like Alan Walker, Salman Khan and the latest in the list Shradha Kapoor. There is nothing wrong with this strategy, this has worked well for other brands. This will help Realme spread wide in the offline segment.

But if this strategy results in price hikes, there may not be much of a difference between Oppo and Realme. The very crux of the reason for forming a separate brand, away from Oppo may not stand justified. In the wake of a global economic crisis and fluctuating dollar value, the cost of consumer tech products are uncertain in the near future. OnePlus and Xiaomi are well aware of this risk they are taking. I hope Realme is also aware of the implications of spending on Brand ambassadors. As long as that cost does not affect the price of their mobiles or compromise on the quality of their products, the industry will live through the tough times and see the light at the other end of the tunnel.

I have consciously kept Samsung away from this discussion because they are a different case-study. They don’t fit along with any of the “Indie” brands or any regular mobile brands. They are the giants in the consumer tech world spreading across the entire breadth of the spectrum. They cannot be taken into consideration for comparison of marketing spends vs success in the market. Oppo and Vivo have a major traction offline and they are not known for mobile models in affordable price segments. Their marketing spends could be justified and could be named essentials for their growth and survival. 

A word of caution

Brand ambassadors help the brand gain the reach, but if the online tech community does not endorse the product, the brand will flop in the box-office just just like how celebrity powered movies flop due to lack of story/screenplay. It is crucial to strike a balance and knowing exactly where to draw the line.