Lenovo sold 45,000 units of its entry-level-mid-range smartphone Vibe K5 Plus today in an open sale on Flipkart, marking the first time ever that so many phones have been sold via the open route in a single day in India.
While even larger quantities of phones — about 80,000 — have been sold by LeEco in a single day, those were sold under so-called flash sales.
In flash sales, people are urged to buy as soon as possible or risk being faced with the ‘sold out’ board.
In an open sale, that urgency factor is not there and people buy after thinking long and hard.
Though flash sales typically generate a lot of headlines and social media buzz, they are a inefficient means of selling due to the huge amount of cancellations involved.
Unlike in open sales, one can ‘buy’ in flash sales without paying money immediately. This leads a lot of misuse of the facility where rivals or miscreants simply book the phone without paying any money, making the phone ‘sold out’ within a couple of seconds.
This ensures that genuine buyers are not able to get their hands of the devices. Once the genuine buyers leave the website thinking that all the phones have been sold, the ‘fake buyers’ simply cancel the order instead of making the payment.
This has been a rising problem with many flash sales. Even LeEco, which initially started with flash sales, soon moved to open sales due to many reasons including cancellations.
Lenovo said it was proud of selling out 45,000 units without resorting to any gimmicks. “(This) shows great products don’t need flash sales to sell 45,000 units,” the company said.
RELIEF FOR LENOVO
The fact that it was able to sell out 45,000 units is likely to come as a major relief to Lenovo, even though it took a few hours to achieve that milestone.
Many people, including us at RTN, have doubted the saleability of K5 Plus because of its positioning as neither an entry-level phone nor a mid-range phone.
The K5 Plus, which carries model number A6020, is the successor to the enormously successful A6000 and A6010, both of which sold close to or over a million units in India.
However, unlike its predecessors — which were priced in the Rs 6,500-7,500 range, the K5 Plus has been priced at Rs 8,499 — which pushes it out of the ‘entry-level’ category.
However, due to modest specifications such as only 2 GB of RAM, no-fingerprint sensor and a 5-inch screen, the K5 Plus can also not be compared with mid-range competitors like the Xiaomi Redmi Note 3.
In fact, on the basis of specifications, the only major advantages that the K5 Plus has is support for VoLTE 4G voice and full-HD resolution on its display.
On the other hand, models like Coolpad Note 3 Lite offer a fingerprint sensor and 3 GB of RAM for just Rs 6,999.
However, what seems to have worked for Lenovo is the enormous goodwill that it has generated last year with its blockbuster sales.
Lenovo was the only company in 2015 which was offering Indian consumers great hardware at affordable prices in substantial quantities.
Though Coolpad — which used to a major supplier to Indian brands like Spice earlier — and LeEco joined the bandwagon later, consumers still think of Lenovo as the top brand when it comes to offering decent hardware in the entry-level space.
Lenovo, however, has not had that kind of luck this year in the mid-range space, where its K4 Note floundered after an initial spike. The K4 Note has not been able to match up to buyers’ expectations due to the easy availability of the Le 1s from LeEco at Rs 10,990, or Rs 1,000 less than the Note.
CAN THE MOMENTUM SUSTAIN?
Although the first sale of the Vibe K5 Plus has been a success, it remains to be seen how long Lenovo will be able to demand premium pricing for this A6000 series device.
If sales start flagging in coming weeks, the company will have no option but to reduce its price to Rs 7,999 or even Rs 7,499 — which was the launch price of the A6010, the predecessor of A6020 or K5 Plus. At those price levels, the K5 Plus will become a hot-selling commodity just like its father and grandfather was.