OnePlus, one of the market leaders in premium smartphones in India, recently launched its premium TVs. Vikas Agarwal, General Manager, India, OnePlus, spoke to BusinessLine on its expansion in India, going offline, competition and issues with government policies.
How do you plan to win in the highly competitive TV segment?
It is a new market for us. However, so far, we have got a great response. When we launched everyone said it’s premium, it’s expensive and it’s India, but so far, if you look at only online, people have loved our TV products on Amazon. We have already set a new record with our premium TV segment, almost 42 per cent of the premium TV segment on Amazon today is OnePlus. It shows that OnePlus is doing much better than other established brands.
On a platform where discounts are a driving force, and OnePlus is not, it’s encouraging. For us, the customers and their satisfaction are always important. Some customers prefer seeing the product off-hand. Hence, we tied up exclusively with Reliance Digital stores.
You also recently announced the opening of a OnePlus store, offline. What are your expectations from it?
Offline is a big focus area for us at OnePlus because we want our customers to come and experience our products. It’s (experience) a common theme for us across channels. Hence, we have partnered with eight new offline retail chains.
Then, we have our own stores as well. The Hyderabad store is going to be the biggest. It’s schedule to be inaugurated by the end of this year. This will take the number of our stores to 35. We are targeting 100 stores by 2020, 75 of which will be owned by us and 25 will be through franchise partners.
Geographically, in India, how is your customer-base spread out?
Currently, most of our customers are from the top eight cities. We are gradually expanding in other cities as well because of online. In smaller cities, where we practically cannot open physical stores, we are going to be driven by Amazon and other online channels because customer awareness is very important, and it’s viable online. Whereas in tier 1 cities, where we have strong brand awareness, and 50 per cent penetration, we plan to expand offline as well.
In tier 2 cities, our sales are not significant. So, we want to look at cities where the share of sales are coming from and then expand there. Currently, in India, our market share is over 43 per cent, but it metro cities like Bangalore and Mumbai our market penetration is over 55 per cent. However, most of this is through online; offline remains virgin territory and we are working on expanding it. Overall, our business strategy is simple, expand offline in tier 1 cities complemented by online experience and expand the offline share.
How soon can you be market leader in the offline segment?
It’s too early to comment. Offline is very difficult. Our current share is 10-15 per cent. However, we have so far only partnered with modern retail formats. There our penetration in the premium segment is approximately 50 per cent. The only challenge is that the bulk of the offline trade is the general trade, mom and pop stores. At some stage we may target that.
With the new tax announced, do you see local manufacturing on the cards?
For phones, with a partner, we have local manufacturing. For TVs, we will be manufacturing in India by the end of this year because producing abroad is an added cost for customers. We want to support the Indian economy in whatever capacity we can. The R&D centre in Hyderabad — which is the biggest in India — we are planning to make it big and export from India. We’ve already done pilots. Once we have sufficient scale, we will look at opening another facility. We will invest in service infrastructure, and talent. Even from the 5G perspective, the only bottleneck is when can the commercial roll-out happen because our technologies are in place.
Any challenges that OnePlus faces from policy perspective?
There are no severe challenges as such but the only hiccup is the consistency — we don’t know when the new regulations come, how frequently can it come, will there be a change, and if yes, how soon. This is from the perspective of 5G, manufacturing, import, export and other incentives. If there can be a defined timeline on when to expect new announcements, and if there is predictability on what are the options being considered it will be much better. Of course, they ask for our suggestions but currently, it happens behind the scenes.
Source: The Hindu