HK Air Cargo embargoes Vivo shipments after model catches fire

New Delhi: The Hong Kong Air Cargo has embargoed all shipments of Vivo mobile phones after one consignment of the Vivo Y20 model caught fire at the Hong Kong airport on April 10.

“We regret to inform you that the latest update of embargo with immediate effect, all cargo (from any agent and destination) forbidden to accept the “CargoLink Logistics HK Co Ltd” and “Sky Pacific Logistics HK Co Ltd” and/or co-loader on carriage by RH/HX aircraft until further notice. Also embargo all type of “VIVO” mobile phone,” the Hong Kong Air Cargo Carrier said in an internal communication dated April 11, seen by ET.

If other airlines follow suit by banning Vivo shipments, the incident may hurt the smartphone brand's image, especially when the company is spending top dollars in India for branding in IPL, experts said.

“This is an unfortunate mishap at a time when Vivo is full blown with the IPL which is its title sponsor,” said Faisal Kawoosa, founder and principal analyst at research firm TechArc.

“Though in India, Vivo is manufacturing phones and procures components instead of CBUs, we need to see if those also are impacted by the said embargo. However, it could lower consumer confidence till the root cause is known. I expect Vivo to proactively educate stakeholders about the incidence about the cause and ensure its not something to do with product design, etc,” he said.

Vivo is the third largest smartphone brand in India holding 18% market share, having shipped 26.7 million units in 2020, according to data from IDC India. It is ranked number one in the offline retail channel.

Vivo and Hong Kong Air Cargo did not immediately respond to ET’s query.

In 2017, Samsung had to recall its Note 7 and suffer loss of millions of dollars after several Note 7 handsets were reported to explode due to overheating of batteries.

“This is a major problem for Vivo if not resolved soon because all airports and airlines will take stock of the situation and may have an effect of the ban extending to all Vivo phones on flights across the world,” said N. Chandramouli, CEO, TRA Research, a consumer insights and brand analytics company.

“If you recall the Samsung battery explosion episode, it took them almost 4-5 months for crisis control but sales and consumer trust kept declining for a longer time even after the resolution of the battery problem. Ultimately, consumer is the biggest endorser of any brand. If consumers start believing that Vivo phones are exploding, it could cause a major cascading effect on the brand,” he added.

“Any kind of disaster or accident related to the product can create a negative image for the brand no matter how big it is,” said brand strategy expert Harish Bijoor. “So in any such scenario it is must for the company to give proactive clarifications.”