Vivo without cricket and IPL: Will its equity falter?

Dream11 has bagged title sponsorship for IPL 2020 for Rs. 222 crore. Will this hiccough in Vivo’s 5-year association with the tournament hurt its brand value?

Vivo has taken a step back from being Indian Premier League’s title sponsor for the 2020 version of the tournament. BCCI will take a fresh call on sponsorships in January 2021, post which the smartphone brand might resume its position as IPL’s title sponsor in 2021.

This year, IPL’s title sponsor will be Dream11, a fantasy gaming app which placed a Rs 222 crore bid. This upgrades Dream11's status in the IPL from official partner to title sponsor.

A Times of India report mentions that Dream11 has shown interest in continuing as title sponsor for the remaining two years, subject to Vivo returning. The tournament will be held in United Arab Emirates (UAE) from September 19 to November 10, 2020.

Vivo had won the rights to be IPL’s title sponsor in 2015. At that time, PepsiCo had decided to terminate its title sponsorship contract, two years before its expiry.

In 2013, PepsiCo had paid Rs 396 crore for IPL’s title sponsorship rights for five years. It, however, opted out early because of the negative publicity that came with the IPL spot-fixing scandal of 2015 (in which the Supreme Court banned Chennai Super Kings and Rajasthan Royals for two seasons.)

In 2015, the title sponsorship rights were transferred to Vivo as stipulated by PepsiCo’s contract. News reports stated that Vivo bagged the title sponsorship right of the T20 League for a two-year period (2016 and 2017), at a cost of Rs. 100 crore per year.

In 2017, Vivo further announced that it would be the title sponsor for the tournament for the next five years (till 2022), with a bid worth a whopping Rs 2,199 crore.

Taking note of the border skirmish that resulted in the martyrdom of our brave jawans, the IPL Governing Council has convened a meeting next week to review IPL’s various sponsorship deals 🇮🇳

— IndianPremierLeague (@IPL) June 19, 2020

In June 2020, IPL’s official handle tweeted that it would be reviewing its various sponsorship deals. In early August, there were speculations Vivo would back out of the title sponsorship, given the strong anti-China sentiment in India.

On August 10, the Board of Control for Cricket in India (BCCI) issued a press release, inviting third parties to express their interest in acquiring title sponsorship rights for IPL 2020. This is when Dream11 stepped in as the official title sponsor.

Vivo entered India’s smartphone market in 2014, and at the time of winning the title sponsorship (in 2015), afaqs! reported, Alex Feng, CEO, Vivo Mobile India, as saying, "When we make business decisions, value instead of price is taken into consideration. This association will bring us what we expect, and we believe that Vivo-IPL is a good deal for us."

Also Read: Know the new IPL sponsor Vivo

"Cricket is a religion in India, and IPL is the first league of this kind in the country which has changed the meaning of entertainment among sports fans. IPL is the most awaited tournament around the year and this can easily be attributed to the entire packaging, which attracts fans across the country, as well as internationally," added Feng.

Also Read: "Bagging IPL title sponsorship was our first step towards growth in this market": Vivek Zhang, CMO, Vivo India

At that time, Vivo’s IPL association was an essential part of its global expansion plans and Indian localisation strategy. What does the latest development mean for brand Vivo in 2021? Will its equity falter? We spoke to four experts to find out.

Suraja Kishore, CEO – BBDO India

Sentiment drives stock market, and so it is (the case) for brands too. Considering the current context, pressing the pause button on being there in the spotlight is a good step by Vivo. Monitoring the mood of the market is crucial in shaping brands and deploying marketing communication.

The smartphone business is all about building strong ecosystem. And Vivo’s success lies in its strong product portfolio across price segments, extensive distribution network, and impactful marketing and promotion it has invested in.

Top of the mind (TOM) recall might see a minor dip. But overall equity won’t get impacted majorly, since pulling out of the IPL can provide the financial muscle to push substantial trade support on e-commerce and retail to make Vivo the most visible and considered brand.

People are widely informed that Vivo has not terminated the sponsorship. It has just suspended it till next year. Second, public sentiment about the economic scenario during COVID is that we are going through a collective crisis. And in this light, people are less judgemental about companies pulling out their advertising and media spends.

Having sponsored the IPL earlier, Vivo today enjoys trust and equity among consumers seeking the latest at best price, and this will see it through.

Dheeraj Sinha, chief strategy officer, Leo Burnett, South Asia

Vivo has already got a lot of visibility for its association with IPL over the last few years. I don’t think that awareness is going to die too soon.

Overall, the brand has managed to build significant awareness through its retail presence and media tie-ups. If it does wish, there are various other media combinations available to maintain a similar presence. To that extent, I don’t think there’s a damage to the brand with this breakup.

What’s critical to watch, though, is the impact of the anti-China narrative on brand preference. Would this narrative impact people’s decision making process while buying a smartphone? To my mind, it’s more the overall narrative, rather than the IPL breakup, that the brand needs to watch out for.

Navonil Chatterjee, joint president and CSO – Rediffusion

By pulling out of the IPL, Vivo has ensured one thing definitely - those who did not know that it is a Chinese brand, now know that. The brouhaha and negative PR that followed underlined the taboo Chinese connection even more.

Having said that, I don't think it needs the IPL to boost its brand salience anymore. IPL has already done its job of converting an unknown brand into a familiar household name.

Finally, on the subject of sponsoring next year's IPL, my view is that public memory is very short. And unless there is further provocation or deterioration in Indo-China relationship, nobody will be too bothered about Vivo sponsoring IPL next year.

Govind Pandey - chief executive officer - TBWA\India

I think given the strong negative sentiment, it works for both the BCCI and Vivo. BCCI is seen as not supporting a Chinese brand, and Vivo needs to keep a low profile to not evoke a stronger negative reaction from fans. So in my view, a temporary measure to stay out of the limelight in the current climate works for Vivo.