Quantum Brief

How Vivo coming under ED scanner could affect brand, ambassador Virat Kohli & FIFA World Cup sponsorship

The Chinese smartphone maker has temporarily halted ads featuring Indian cricketer and brand ambassador Virat Kohli owing to an ED investigation over money laundering allegations.

By  Kashmeera SambamurthyJul 27, 2022 12:06 PM
How Vivo coming under ED scanner could affect brand, ambassador Virat Kohli & FIFA World Cup sponsorship
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The Chinese smartphone manufacturer Vivo temporarily canceled advertisements—on television and social media platforms—featuring the company's brand ambassador Virat Kohli. The move came after Vivo came under the radar of the Enforcement Directorate (ED) over allegations of money laundering. The ads featuring the popular Indian cricketer have been taken off the air while the brand faces scrutiny by the investigating agencies.

As per Counterpoint, in the first quarter of 2022, Vivo held a market share of 15%. It highlighted that Vivo was readying itself to enter the premium market segment and take on the likes of Apple and Samsung.

Vivo's game plan disrupted again?

It was in 2014 that Vivo began to look into sports marketing as it expanded into markets in South and Southeast Asia. In 2016, Vivo skicked off a strategic partnership with National Basketball Association (NBA) China as its official mobile handset sponsor.

In India, the company had a rollercoaster ride with the Indian Premier League (IPL). It had a deal of approximately Rs2,200 crore for title sponsorship rights from 2018-22, committing to pay around Rs440 crores annually, apart from the spends on advertising, marketing, new launches, etc., around each season of the IPL.

First in 2020, with the Galwan Valley military face-off between the Indian and Chinese Army soldiers, the brand took a break for a year after a nationwide backlash. At that time, Dream11 took over as a title sponsor.

Then the 2021 season of IPL in which Vivo returned as a title sponsor had to be suspended due to the second wave of Covid-19. Vivo had been looking for a partner to work out an exit route but wasn't able to find a replacement. According to reports, the Board of Control for Cricket in India (BCCI) helped both Vivo and Tata come to an agreement to seal the deal and that's how Tata IPL came into being.

In 2017, Vivo signed a six-year deal with FIFA to be its exclusive smartphone sponsor for the 2018 and 2022 football World Cups. In May 2022, Vivo announced that it had partnered with FIFA WorldCup Qatar 2022 as an official sponsor and official smartphone.

How will Vivo’s current woes affect its brand image and sports marketing strategies in a year when it's an official sponsor of the major global quadrennial football tournament that's arguably the world's biggest sporting event?

Vivo, Virat, World Cup: Will it be business as usual?

As per business and brand strategy expert Harish Bijoor, all brands of Chinese origin were suddenly in trouble and turmoil in India, and one could expect more.

Brands that wore the tag of their origin were under a heightened degree of investigation. He says, “As more and more scandals come out, there is going to be image trouble for these brands and their endorsers.”

Angel investor and business strategist, Lloyd Mathias feels that it makes sense for Vivo to pause advertising given the ongoing investigation against the smartphone brand. “Also for Virat Kohli, this move helps protect his personal equity,” he adds.

Vivo’s partnership with FIFA WorldCup Qatar 2022 would not stand to be affected by this recent development, Bijoor feels, adding that “Overseas event endorsements would not suffer as much as domestic fixtures, their images and brand endorsers would.”

But, Mathias is of the opinion that this would be dependent on the outcome of the current investigations. Since the FIFA World Cup is still four months away, what impact the recent episode has on the brand will be clear in days to come.

“If the investigation doesn't throw up anything substantive, then it can go back to business as usual. Public memory is typically short-lived, and the target groups buying phones don’t necessarily look at issues beyond price features,” Mathias concludes.

First Published on Jul 11, 2022 5:18 PM