India is one of the fastest growing smartphone market in the world, but most Indians are first time users, preferring affordable alternatives to iPhones or higher-end Samsung devices
India is one of the fastest growing smartphone market in the world, but most Indians are first time users, preferring affordable alternatives to iPhones or higher-end Samsung devices. No wonder, a lot of Chinese smartphone brands have launched here. Notably, new players such as Le Eco, Gionee, Vivo are getting extremely aggressive. However, Vikas Agarwal, general manager, India of Chinese phone maker OnePlus says that his company’s products outclass most others in the category in terms of build quality, performance and design. “We are our own biggest competition right now as we are yet to scale our supply infrastructure to meet the existing demand,” he tells Sudhir Chowdhary in a recent interaction. Excerpts:
Tell us about your journey in India so far?
Within the first 4 months of the global launch of the OnePlus One— our first flagship—the company noted an important trend that India ranked among top 7 countries in terms of traffic to its global website despite its products not even available for sale in India. Given the nature of the core team, which has been lean since it came together, online data and analytics played a vital role in crafting strategy. And the numbers pointed towards one direction—India was the place to be. People from India were among the most active on the OnePlus forum, an online platform created by OnePlus where it could engage with its fans across markets. And a significant amount of interest from India made it difficult to ignore. That was when OnePlus roped me in to lead their operations in India in October 2014.
There began OnePlus’ India story. The initial plan was to work towards a Diwali 2014 launch in India. But considering the complicated nature of e-commerce operations in India, we decided to partner with Amazon India, a first for OnePlus as we sell directly through our website across all markets outside India. The initial few months were like a roller coaster ride as we battled a legal case and worked towards building a small team while working from a friend’s office. However, the early challenges didn’t really impact OnePlus growth in the country as the brand quickly grew through word of mouth. Infact, India contributed 7% of the first year’s overall sale within just 1 month of operations without any marketing or promotional activities. As per a recent CMR report, OnePlus captured almost 7% market share in the premium smartphone segment during 2015, ahead of several well established brands.
What is the response you have received from the Indian market?
Within a short span of one year, India became a key market and we are committed to long term growth here and are investing significant resources into the country. Unlike other regions, India is the first country where we built a local team to serve our customers better. India is already among the top 3 markets and is growing faster than any other country.
Seeing the response from our customers and fans we decided to set up exclusive service centres across all major cities in India. The idea of starting the exclusive service centres was to provide convenience and invent a new dimension to how people look at and experience customer service in India. All the centres are located at prime and premium localities within each city. Along with this, we also promise to resolve customer issues within a ‘guaranteed 1-hour turnaround time’ plus facilitate pickup-drop service for users residing in remote locations. In addition, OnePlus users have access to over 50 multi-branded centres in 38 cities (up from 32 last year), some of which are shared exclusively with Apple.
OnePlus3 is your third phone launch; what are your expectations from the market?
The OnePlus 3 offers top-of-the-line performance and inspired design, while keeping the customer at the centre. It features ‘Dash Charge’ a revolutionary charging technology, which adds a day’s power (more than 60% battery charge) in half an hour.
We have engaged deeply with our fans across all markets including in India over a period of 7 months to understand what they expect from the OnePlus 3. The phone is a result of that effort as it combines what our customers already love about our products with what they want and expect next. The early response to our latest offering is extremely positive.
A lot of Chinese phone brands have launched here. How did you manage to keep up your game?
There are certain comparisons that can be drawn, but we are not yet at a stage where we worry about the competition. We believe that our products outclass most others in the category in terms of build quality, performance and design. We are our own biggest competition right now as we are yet to scale our supply infrastructure to meet the existing demand. We are going to continue focusing on our top priorities: our product and our user.
OnePlus was known for being exclusive given the invites, but now you have done away with invites. Will that affect the brand?
We created the invite system with the OnePlus One because we were brand new on the mobile scene, and we had no idea if or how quickly our devices would take off. Three devices later, we have scaled up our logistics and operations and are better equipped to handle demand.
Are you looking at offline distribution network in India?
Looking at the current market scenario, we believe that the online-only route will continue to grow on account of better value proposition in terms of convenience, selection and trust.
Offline-only players will also eventually start selling online through marketplace models as the price differential between online and offline channel will reduce once GST comes into the play.
In the long run, online and offline channel sale will converge and a new omni-channel sales strategy may emerge wherein customers can book a device at an offline store and have it delivered at his doorsteps through an online store or vice-versa. We are already at the cusp of that change. This strategy would allow customers to benefit from touch and feel factor possible only in offline channels while benefiting from competitive pricing offered by online retailers.
Manufacturing plans for India. Any time soon?
Local manufacturing was on our minds since early 2015. We announced partnership with contract manufacturers Foxconn at the Sri City factory in Andhra Pradesh in October last year. OnePlus X was the first phone model manufactured in India.
Total peak capacity of the plant is 500,000 phones per month. The facility generates direct employment of over 1,000 full time workers, thereby giving further support to the government’s Make in India initiative. We are extremely particular about the quality of production and it is important for us to match global standards. We have already started local production for the OnePlus X in small batches to ensure that the high product quality is maintained. Mass production will start soon as we expect to meet almost all of the demand for current and upcoming OnePlus phones locally.