Despite 20 Per cent Rise in Sales, Oppo and Vivo Post 1,225 Crore Loss

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Vivo holds a Rs 2,199 crore five year contract for IPL. Oppo, on the other hand paid Rs 1,079 crore for team India’s cricket jersey rights contract for same period

Oppo and Vivo have filed a combined loss figure of Rs 1,225 crore during the first six months of the current financial year. The combined loss figures have been sourced from the regulatory filings done by the brands. Interestingly, these loss figures are despite a 20 per cent increase in overall sales figures in the country. Both Oppo and Vivo operate under the BBK umbrella.

The two smartphone brands had made a Rs 125 crore profit during the first six months of financial year 2017-18. This profit was largely attributed to Vivo, as Oppo had posted loss during the same period.

Absorbing impact of Rupee’s depreciation

Vivo and Oppo, unlike many other smart phone brands have not raised prices of their products in India. The move may have helped the duo in driving sales but it seems as if it has costed them in the overall profit figures during the first six months of the ongoing financial year.

OnePlus, a brand famous for value flagship smartphones in India had also hinted towards increasing prices in the long run. OnePlus is the third brand after Vivo and Oppo to operate under the BBK umbrella.

Realme, another smartphone brand in India had also increased the prices of its products post Diwali sales, citing rupee’s depreciating value in the international market.

Madhav Sheth, CEO, Realme mobiles had tweeted, “Such a hard decision to make. We’ve always believed in offering the power & style with a very low margin, due to currency rate factor which is beyond our control, we will have to slightly increase the price of Realme 2 & Realme C1 so that we deliver you the best in the long run.”

High stakes on marketing and advertising

Oppo and Vivo have both taken aggressive marketing and advertising routes in India. While Vivo is a sponsor of the India Pro Kabaddi League and IPL, Oppo is the official sponsor of the Indian Cricket team.

Vivo had won a five year contract for IPL rights at a cost of Rs 2,199 crores. It is to be noted here that this cost is approximately 265 per cent over the base price of Rs 120 crore set by the Board of Control for Cricket in India (BCCI). Calculated in terms of cost per year, Vivo is paying around Rs 440 crores every year to retain IPL rights.

Oppo, on the other hand, has a five year contract for team India’s cricket jersey rights. The contract had cost Oppo a staggering Rs 1,079 crores. This boils down the cost to Rs 215 crores per year, that the smartphone brand is paying to retain jersey rights of the Indian cricket team.

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