According to a Counterpoint Research report, OnePlus led the premium smartphone market in India with a 40% share in Q2 FY19, leaving behind Samsung and Apple. Vikas Agarwal of OnePlus India speaks to Shinmin Bali on the company’s offline expansion plan, experiences in international markets, the value versus volume play, and more. Edited excerpts:
What has been your biggest learning from the Indian market?
Customer experience is one of the biggest insights. When we started, an area we lagged behind in was service. It took us two years to identify the gaps and another two to address them. Today, we promise a turnaround time of one hour. Also, we recently introduced coffee as a concept in our service centres with the idea that you can feel at home. Going offline is another aspect. There is no right way to decide when to enter the offline space. In other markets, we are still an online-only brand. So we are looking to reach a certain level of volume in a city to use as a benchmark for the right time for offline expansion. As of now, the offline expansion is centred around India, but in the future we could look at opening experience stores in other global markets.
This year, we are looking at offline expansion in 10 to 12 cities. We started our Experience Zone in Bengaluru last year, and realised that it did not cannibalise our online sales but actually accelerated it. To give you an idea, we sold more than 250 units a day for over a month when the OnePlus 6 was launched.
What are the challenges in the Indian market?
The only challenge we see is affordability. Right now, there is decent awareness and demand, but affordability is a limiting factor. This is not the case in global markets where awareness is a bigger challenge.
Is television the next frontier for OnePlus?
We see an opportunity in this space where there aren’t enough meaningful innovations happening, with the category having stagnated in the last couple of years. Smart TV is seeing innovation and interest which is what we are targeting. We do not plan to enter any other category in the next few years. TV alone would take a couple of years to stabilise.
What opportunities do you see outside India?
Around 75% of our business comes from outside China. We have already expanded to a couple of markets with newer e-commerce and telecom players. Amazon has recently launched OnePlus in Germany and the UK. Likewise, we also had O2 and Elisa as our carrier partners in Europe. This year, we are looking to onboard three to four telecom partners in these markets.
What is your strategy for tier II and III markets given the premium pricing?
Our data suggests that almost 70% of our business comes from the top six to eight cities, which means the long tail is there. But categories such as premium luxury and automobiles have consumers in tier II and III markets. We are trying a kiosk format in these cities. This year, the stores are largely planned for the top 10 cities; next year, we may look at stores in tier II and III cities depending on the performance of the kiosks.
Is OnePlus moving from a volume play to a value play?
We have always focussed only on value; volume is a long-term aim for us. We are not looking at accelerating volume by expanding quickly. We are focussing on online as a growth channel and offline as an experimental channel. Our approach is unique: we are not going for distribution reach, which is the quickest way to expand offline. In the long run, it has to be an omni-channel approach. What is important is to do it in a sustainable manner. A lot of brands have quickly expanded and, in the process, have lost their advantage.
How does OnePlus plan to avoid falling into the same trap?
Our goal is to survive every year. We are not in the business of going faster than others. At the end of each year, we want to be stronger than how we started the year. We will never take extraordinary risks. In our industry, companies die not because they don’t sell enough, but because they have excess inventory. That is something we will never try; we will always be very conservative.