Why Gionee Phones Company Crashed Badly?

Why Gionee Phones Company Crashed Badly?

Gionee steadily won the massive Chinese market due to its premium quality smartphones after the company was founded in September 2002.

Time flew and the company rose to prosperity and Gionee captured a huge chunk of Chinese market and became one of the biggest smartphone manufacturers in China. In 2006, Gionee was selling 4 million smart phones. And in 2012 according to a Global Research and Advisory firm Gartner, Gionee grabbed 4.7 % of the Chinese market share.

The company grew so popular that BLU, an American smartphone company started selling their phones as by rebranding Gionee phones. Gionee expanded to various foreign markets including India, Vietnam, Taiwan, Bangladesh, Nigeria, Myanmar, Nepal, Thailand, Philippines, and Algeria before going bankrupt.

It arrived India in 2011. This proved very good decision since the smartphone market was booming in India. At that time India did not have too many big competitors in this domain. Samsung and LG being the only decent competitors were selling their phones at premium prices on which it capitalised. They started selling phones with more features at a bit lower prices and got great competitive advantage. Gionee was selling one smartphone every 7 seconds!

Gionee’s main focus was the offine market which had the highest customer base at that time. Hence they focused on expanding their presence in this domain. This strategy went very well and their phones became very popular in India. In 2014 it launched the world’s slimmest smartphone ELIFE S5.5 globally. This created a great hype in India.

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One more thing happened in 2014. This was something that proved deadly for the company’s future. It was the entry of Xiomi in India. Xiomi started selling their phones by branding them with a lot of features. They proved that a lot more value can be bought at the same price. Vivo came to India the same year on similar lines with their superior features. Later one more smartphone giant came to India. It was Oppo again on the same lines. The year 2014 proved to be deadly for Gionee. A German Media company reported that Gionee devices have a preinstalled malware in them. This damaged the brand reputation of the company.

The online market was already taken over by Xiomi. The offline market which was the prime focus of Gionee was increasingly being taken over by Vivo and Oppo. Also these brands paid higher commission to the sellers than Gionee which led to decrease in the sales of the company.

To improve their deteriorating situation, it started marketing campaigns similar to Oppo and Vivo. Like the Colour of Oppo was green and Vivo was Blue, Gionee started marketing Orange. They also started improving on their selfie camera. In 2016 Gionee launched a popular Selfiestan campaign. Gionee had now started improving upon their product but was not able to generate enough leads to overcome their high marketing expenses.

Another reason for their downfall was the high delay in the launch of smartphone in India after being launched in China. Since Oppo and Vivo were launching their new smartphones one after another, and the delayed entry of Gionee was offering outdated devices you can guess what happened.

By 2016, Xiomi was getting aggressive in its campaign. Their phones very getting very popular due to the immense number of features offered. Also Xiomi phones were cheaper than Gionee making Xiomi the obvious preference. The company was losing on all fronts. It did not have a good market both online and offline, and its customers did not have a good reason to buy their phones anymore.

In 2018 Gionee shut down all its operations in India and sold its brand name to Karbonn mobiles. Not only in India but it lost its brand even globally. To make the matters worse, in November 2018 a news reported its chairman losing over $144 mn by gambling in a casino. This led to damage of reputation and a huge loss to the few of the operating units left. The company eventually filed Bankruptcy.

Source: paisatheory.wordpress.com