Do you know how much Vivo spent last year on advertising in India? The Chinese phone brand shelled out around Rs 700 crore and jumped two ranks to number seven in 2019 from rank nine in 2018.
In 2018 too, the company was among the top 10 advertisers and had spent as much as Rs 650 crore.
In 2019, there was a new entrant on the top 10 advertisers list, and that was Oppo, another Chinese brand, which spent as much as Rs 600 crore on advertising in India.
Xiaomi was the new kid on the block in the top 50 advertisers’ list in 2018. The company had spent around Rs 200 crore.
In 2018, there was only one Chinese brand on the
top 10 advertisers' list and this number jumped to two when Oppo made its entry in the top 10 list.
So, the question is can India afford to boycott Chinese products when the brands from the neighbouring nation are making big investments, especially in the ad market?
The advertising market is already under pressure. First, due to economic slowdown and now because of coronavirus.
In such a scenario, if big ad spenders shy away, it will further create a dent in the advertising market which grew by nine percent in 2019 as against the expected growth of 12 percent.
Last year, the top 50 advertisers accounted for 33 percent of the total Adex (advertising expenditure). They accounted for as much as 14 percent of Adex and contributed to 43 percent of the top 50 list.
The top 50 advertisers spent 78 percent of their budgets on television and digital combined.
“Almost 80 percent of the top 10 spenders in mobiles are the Chinese brands…. Oppo, Vivo, OnePlus, Xiaomi. They have displaced others such as Micromax and Karbonn. The Chinese have invested heavily in marketing especially in cricket for great visibility,” said Sandeep Goyal, Chairman, Mogae Media.
TV, IPL and the Chinese connection
Talking about TV, last year the strong growth witnessed by the advertising sector can be attributed to events like Indian Premier League (IPL), ICC Cricket World Cup and Lok Sabha elections.
On TV, in terms of genre contribution, on account of success of IPL and non-cricket leagues, revenue contribution of sports genre has seen a major shift from only three percent in 2009 to 10 percent in 2018.
And for IPL, the top ad spenders are telecom and handset companies, which spent Rs 127 crore last year. As for 2018, the smartphone companies spent Rs 109 crore.
The biggest advertiser in the first week of IPL in 2019 was Oppo and in 2018 during the same period, it was Vivo.
Last year, Vivo retained IPL’s title sponsorship with a deal size of Rs 2,199 crore which the company has to pay to Board of Control for Cricket in India (BCCI) over five years.
For the title sponsorship bid, as many as five companies had applied and all were handset makers including Oppo, Xiaomi, Motorola and Intex.
Also, Vivo paid a huge markup to retain the rights of title sponsorship, a 455 percent jump from Pepsi’s deal for which the beverage brand had to pay Rs 396 crore over five years.
Pepsi had pulled out of its five-year deal in 2016 and that’s when Vivo picked up the title sponsorship for Rs 200 crore for two years.
So, an annual breakup shows that Vivo paid Rs 100 crore in 2016 and 2017 each whereas now the annual payment by Vivo to BCCI is Rs 440 crore.
Brand expert Harish Bijoor points out an interesting aspect. “As we think out the #MadeInChina story for the brands we use, there seems to be a little bit of China in every product and service around. There are brands owned by Chinese companies and then there are brands that outsource from China,” he noted.
Goyal echoes this view. "Border tensions could change consumer behaviour; but where is the choice?" he asked.