Flipkart works on its core strengths, launches Lenovo’s latest model

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Flipkart might have a million problems right now, but getting exclusive partnerships with popular brands does not seem to be one. Flipkart, which claims to be the largest online platform for mobile phones in India, launched the much awaited Lenovo Vibe K5 Note on Thursday.

Despite the recent acquisition of fashion portal Jabong, the country’s largest online marketplace has had quite a few setbacks this year. But it continues to be the largest platform for mobile phones. In fact, mobile phones make up the largest category in terms of GMV for Flipkart.

The latest launch suggests that Flipkart is building on its strengths – mobile phones in the Rs 7,000-15,000 price band are the strongest for them. The K5 Note’s 3GB version is priced at Rs 11,999, and the 4 GB one comes at Rs 13,499. The K5 Plus 3GB, which costs Rs 8,499, is already available on Flipkart. These models succeed the Vibe K3 Note and A6000 models, both of which have done well. There are high expectations for the K5 Note as well.

India is said to be the world’s second largest market for smartphones, with 45 percent of all mobile phones shipped in Q1 2016 being smartphones. In April 2016, a report by Counterpoint Technology Market Research stated that while Samsung and Micromax ruled the Indian smartphone market with 29 percent and 17 percent shares respectively, Lenovo has an 8 percent market share. In May 2016, the Times of India reported that Lenovo grew the most, with its shipments up by 63 percent on Q1 2015. Surely, brands like Sony and LG have taken a hit. Sony, in fact, is revising its strategy and selling only Xperia smartphones in India from now on.

Long-term relationship

Lenovo has had an exclusive partnership with Flipkart for over two years now. All Lenovo phones are 4G enabled, and Flipkart has sold more than 1.5 million units so far. Although 4G is yet to go beyond Tier 1 cities in India, Ajay Yadav, VP – Mobiles at Flipkart, says that 65 percent of devices in the market are already 4G compliant. He believes that 4G is not just about technology but also about data consumption habits.

In a telephonic conversation, Ajay told YourStory: “Despite the limited penetration, when it comes to buying a new device, the customer would typically want the latest model – the term is ‘future-ready’. Any new device in the market has to be 4G compliant, so that as and when the 4G ecosystem comes in, the customer’s device can be useful.”

Flipkart sells both smartphones and feature phones, and has a single team managing both.

Lenovo was the first mobile brand to move away from the price ratio, Ajay says. “Lenovo’s entire Killer Note series was migrated to Theatremax, providing a Virtual Reality experience. The K5 Note takes VR to a different level; it supports not just theatre viewing but also gaming. It has a new design, metal body, processor and 3-4 GB RAM, and is more seamless than the earlier one,” he adds.

Exclusivity is the key

Flipkart claims that their strong presence as the leading retailer for smartphones in India is primarily due to their various exclusive partnerships. There are 160 mobile brands on Flipkart from manufacturers like Samsung, Lenovo, Motorola, LeEco, Apple, Mi, and Asus. Out of them, about 85 percent are exclusive.

“The basic premise of e-commerce is providing a wide selection. About 85 percent of the total comes from the exclusives’ portfolio, and Lenovo [and Moto] has a sizeable share of that,” Ajay told YourStory. According to him, brands choose to be exclusive on Flipkart since they are the largest platform for mobiles in the country in terms of sales, traffic, and number of units sold. “Also, 1,800 cities and 9,000 pincodes are covered for mobiles. Merchants look at our policies too,” he says.

Flipkart claims to have strict engines to check and prevent sellers from selling fraudulent devices, and also to prevent retailers from buying in bulk from their website. They had launched the Intex Cloud String V2.0 last week, and are also launching the Xiaomi Redmi 3S and 3S Prime next week. Flipkart’s biggest competitor Amazon provides exclusive availability for devices like the TCL 562, Moto G4 plus and Intex Aqua Ring, among others.