India’s number one premium smartphone brand OnePlus is betting big on the Indian market to drive revenue and plans to significantly boost its offline sales channels apart from setting up a research and development centre. For the Chinese company, which sells smartphones only through online channels in other key markets such as North America and Europe, the offline push for India comes on the back of a huge potential user base that currently does not shop online.
“Different markets have different futures," Pete Lau, OnePlus’s founder and chief executive officer, said in an interview. “In Europe and America, we only have the e-commerce market to sell our product but in India we also have offline experience stores. The price of our device is about ₹ 40,000. Comparatively speaking, it is a huge sum of expense for a family. So the user may like to experience first and then purchase," he said.
OnePlus opened its first experience store in Bengaluru in January. By the end of the year, it plans to set up 14 offline sales points which would include large-format experience stores as well as stores in tie-up with its authorised partners. At present, it has seven authorised stores and two experience stores in the country. It also plans to set up 24 exclusive after-sales service centres. This way, OnePlus aims to cover the top 10 cities of India where, it believes, 70% of its users reside.
“This action is based on the market future of India and this strategy is different from that in other geographies," Lau said. OnePlus’s optimism for India, which it entered in 2014 and now accounts for one-third of its global revenue, also comes after the brand secured the top slot in the premium smartphone market.
According to Counterpoint Research, which defines the premium segment as one where devices cost ₹ 30,000 or more, in the April-June quarter, OnePlus led this category for the first time ever in India, capturing 40% of the market driven by record shipments of its OnePlus 6, beating Samsung (34%) and Apple (14%).
The premium smartphone market in India is very small but growing fast thanks to the rising income and aspirations of the average middle class Indian. OnePlus does not even feature in the top five brands in India’s overall smartphone market, which is led by Samsung, followed by Xiaomi, Vivo, Oppo and Huawei. Lau, however, is unfazed by rankings and has his eyes set on the big prize—the long-term potential of the Indian market where users, he believes, will upgrade to premium phones.
“Being number one is not our goal. We are focussing on producing the best product possible," he said. “The consumers of India will want to buy the better Android smartphone. The economy of India is growing. The purchasing power is becoming bigger. We want to seize this opportunity," he said.
OnePlus, which launches one premium flagship device at a time, has no plan to launch phones in the sub-₹30,000 category either, where a large chunk of the Indian market lies and where other players such as Xiaomi and Samsung have tasted success. “We are not focussing on how to reduce the cost of the product but on making the best device possible. It is difficult for one company to embrace these two cultures. If we try to produce a cheaper device apart from a flagship, at the end of the day, we will compromise," he said.
At the end of the one-hour interview, the 43-year old tech entrepreneur leaves for the gym to train for ‘Xuanzang’s Road Experience Tour’ where he, along with his leadership team, will walk 80 kilometres for four days and camp for three nights in a desert in Gansu province in China.
“It is to challenge my limits," Lau said.
While OnePlus plans to be patient with the Indian market to move to premium smartphones, Lau, however, has one short-term target. “I haven’t had a holiday in India. I want to pay a visit to the Taj Mahal."
(The writer was in Shenzen at the invitation of OnePlus.)