Counting India as one of its top three markets OnePlus has, in a relatively short span of time, gone from depending on word of mouth publicity to an ad campaign starring actor Amitabh Bachchan. Vikas Agarwal of OnePlus India speaks to BrandWagon’s Shinmin Bali about sticking to the digital-first strategy, how important the Indian market is to the brand and more. Edited excerpts:
OnePlus brought out its first TV campaign recently. How did the campaign help the brand?
The whole idea behind the campaign was to communicate OnePlus being the best rated smartphone. This is something as a brand we are very proud of. Sales has never been an issue for us. The kind of following and exposure that Amitabh Bachchan’s association brought to OnePlus was very encouraging. It helped us greatly as the aim was to create awareness beyond our core audience. Our aim now is to reach consumers who have not yet shopped online or have not considered purchasing a smartphone from an online environment.
Given that OnePlus has forayed into advertising, what are the spends earmarked for the brand’s advertising and promotional activities?
As a digital-first and community-focussed brand, we are extremely conservative with our promotional expenses. The core of our marketing strategy is word of mouth support from our fans and it has remained the same over the years. As the brand has grown to become the third biggest brand in the premium segment ($400 or above) in India, we wanted to create awareness about the positive feedback shared by actual end users. The Best Smartphone Contest communicated this core message in a very direct yet engaging manner.
India is a focus market for OnePlus and we will continue to make necessary investments to increase brand awareness in the region. However, our overall spends remain far below other smartphone brands due to our focus on digital channels and strong organic engagement on social channels.
How is OnePlus planning to cater to its offline customers?
We are not looking to have an offline presence. Instead we choose to partner with telecom network providers and give our consumers access to interact with OnePlus products at these outlets. For example, in our partnership with Idea, the customer can go to the Idea store, get to know our product and then purchase it through Amazon.
We opened our first Experience Store recently in Bengaluru in January, 2017. We are currently concentrating on making the Experience Store a community hub and a popular technology landmark. Based on how well it benefits our users and fans, we will decide on the next city to open another such store. However, we have already initiated a pilot experiment through mini experience zones across premium malls in the Delhi-NCR region.
In India, which are the best performing markets/cities for OnePlus?
Being a digital-only brand, top metro cities account for maximum sales due to their large population with high internet penetration. At an overall level, South India accounts for a disproportionate share due to higher awareness and presence of tech clusters. In terms of specific cities, Bengaluru, Pune and Hyderabad have higher penetration due to the strong network effect owing to the core tech audience.
How much does India contribute to the brand’s overall revenues?
India is already among the top three countries in terms of revenue and is likely to grow faster as the market is still underserved and offers huge untapped potential in the near future. We are thrilled by the consumer response to our products and the potential market opportunity. What makes India special for us is the unparalleled community engagement, perhaps due to young and tech savvy demographics.
Does an offline presence seem like an eventuality for Chinese smartphone players to cater to the Indian market?
At OnePlus, we will continue to be a digital-first brand as the channel is more cost efficient, transparent and user friendly. It also offers strong network benefits where customers can share their positive experiences to assist future prospective buyers. Recently, we also launched our own e-commerce store to provide our users better customer experiences, and an alternate sales channel to buy all genuine OnePlus products and fan merchandise across the country. We have selectively built an offline presence in key markets through Experience Stores in Bengaluru, exclusive service centres and mall kiosks to complement our online-only presence to offer users a chance to physically experience our devices.
Eventually, the retail industry is expected to converge to an omni-channel commerce model where both channels seamlessly integrate to offer a superior experience to end-users. Currently, online channels account for 30-35%, which indicates significant opportunity to grow further before it stabilises at 50% in the next few years. The premium market share is likely to be slightly higher as the audience is more evolved and selective.The current demand in offline channels is driven by entry and mid-level brands who have adopted aggressive promotion strategies to compensate for their late entry and achieve their growth goals or protect market share from competition. In an online channel, the risk of losing out to competition is far lesser as the demand is largely driven by brand/product pull and not promoter push or on-the-spot negotiation tactics that are the primary sales drivers in offline channels.
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As a brand with a digital-first model, what are the hindrances in operating in the Indian market which still has a long way to go in adopting digital retail?
Digital penetration and last mile delivery infrastructure in India is still limited to major cities that makes several key cities inaccessible for online exclusive brands. However, increasing stickiness of digital content (versus conventional media) driven by growing 4G adoption, favourable demographics and rising affordability is likely to provide an exponential boost to online commerce.
From a smartphones industry perspective, reform initiatives like GST, Make in India and Digital India are likely to help us smooth over regional challenges and provide a level playing field for online players.
The other popular misconception is the inherent mistrust with online purchases and concerns about the after-sales service support to over 10,000 pin codes covered by e-commerce platforms. At OnePlus, we have introduced several India-specific unique initiatives to address these challenges like organising pop-up events during new device launches and setting offline experience zones including India’s first smartphone experience store to enable users to physically experience devices before making a purchase. In addition, we have established a network of exclusive service centres with the guarantee of one-hour turnaround time, and pan India home pick-up and drop service in remote cities.