When Motorola came to India with the first generation Moto G in late 2013, almost a year after exiting the country, not a single distributor wanted to take a bet on the brand. A team that was being managed from the Motorola London office had reached out to all the big offline channel partners, only to be rejected. Even Google, which had acquired Motorola in 2012, could not lend the estranged smartphone brand some credibility.
Fortunately, for Motorola, Flipkart took a chance on it.
“The offline distributors generally go for portfolio players, meaning the companies, which sell a range of products, to cover themselves. Nobody wanted to take a risk on a fairly unknown brand, with just one product offering. Had there been one distributor, which agreed, the company wouldn’t have gone to Flipkart,” says a person who was involved in putting together Motorola’s go-to-market strategy. Being an industry insider, he requested to remain unnamed. “Even we thought, online was a far-fetched deal.”
In February 2014, Motorola launched Moto G exclusively on Flipkart. Soon followed Moto X and Moto E. The results were beyond expectations. Over the next five months, Motorola sold over one million units, combined.
“Nobody was expecting the success it was,” says the person quoted above.
The rest is history. Started out as an experiment by Flipkart, exclusive deals now constitute about two-thirds of the total smartphone sales for the top two e-commerce firms, Flipkart and Amazon. As per sources within the e-commerce industry, for Flipkart, exclusive smartphone deals bring about 75-80% of the overall smartphone revenues, while for Amazon, the figure stands at about 65-75%. For Snapdeal, it is about 45-55%. And smartphones as a category, on an average, make up 50-60% of their Gross Merchandise Value (GMV), according to Jayanth Kolla, founder and partner at market research firm Convergence Catalyst.
Overall, for the third quarter of 2016, online channels accounted for 31% of the total smartphone sales in the country, according to the data collated by Counterpoint Research. Cumulatively, exclusive deals generated about half of the smartphone revenues for e-commerce firms.
Earlier this week, loaded with exclusive smartphone deals, Flipkart, Amazon and Snapdeal began their first big sales for 2017. To reach these seemingly innocuous deals, a lot of push and pull happens between smartphone brands and e-commerce platforms. Smartphone makers get the marketing and distribution muscle of e-commerce firms when they go exclusively with one of them. To be fair, they do shell out some money, which anyway they would spend on marketing if they chose to go any other way.
