It was a bumper Diwali in India for Chinese smartphone manufacturer OnePlus. The festive season saw the company register approximately Rs 1,500 crore in sales, said OnePlus’ general manager for India, Vikas Agarwal, in an interview, with CNBC-TV18. What has made the festivities sweeter for the brand is that it comes amid a consumption slowdown that has plagued the festive season.

“The first two days (of the festive season) saw us have sales of Rs 500 crore, which was 100 percent higher than what we did last year,” said Agarwal, “This helped us gain a majority share of the Diwali season sales.” According to market analysts, Counterpoint Research, this has resulted in OnePlus sitting pretty on a market share of 35 percent in the Indian premium smartphone market.

How OnePlus bucked the trend

OnePlus adopted an interesting launch and sales strategy for the festive season. “We did a couple of things differently,” said Agarwal, “For the first time in five years, we did a product launch just before Diwali. So, we had the advantage of selling a new product for Diwali while we continued to have the older generation product, which we would have normally phased out before a new product launch. So, we had the OnePlus 7 series as well as the OnePlus 7T series, which in turn targeted customers who were looking for a bargain as well as those were looking for the latest products.”

Another left-field approach that OnePlus adopted during the festive season, Agarwal said, was to focus more on offline sales. “So far, we have largely been an online brand. But for the Diwali season this year, we also experimented with offline sales for the first time.”

Is the future offline?

The learning from the experiment for OnePlus was simple: the majority of online-driven sales come during the festive season, while the offline market is more or less stable for the remainder of the year. This finding has validated OnePlus’ strategy to expand its offline footprint in the Indian market. “In India, we have reached a stage where we want the brand to reach smaller cities since the body of customers who are not buying OnePlus phones is largely offline,” said Agarwal.

In a scenario where 60 percent of overall smartphone sales are from offline channels, this strategy seems to make sense even for a brand like OnePlus, which had a near-zero online presence until recently. “In the long run, the industry breakup between online and offline sales would be 50-50,” said Agarwal, “While we want to conform to this ratio, OnePlus will still continue to dominate online. We see our long-term online-offline ratio to be 60:40, while in the short run it will probably be 75:25.”

This strategy means the smartphone maker’s top focus is to tap into 20 major Indian cities and set up 100 new stores. By the end of 2020, OnePlus hopes to have a total of 5,000 stores across the country. At present, that number is 2,500 stores through partner retailing channels. “By the end of this year, we are looking to have 500 offline stores through, and by the end of next year, we would have expanded our business to 250 cities,” said Agarwal.

‘Market expansion and not market share, a priority’

Given that the premium smartphone segment accounts for less than four percent of the Indian smartphone market, OnePlus’ priority for the moment is to grow and nurture the market for ultra-premium smartphones and only then focus on individual market share. “Today, the market for premium smartphones is between 4 and 5 million units, and will eventually touch 12-15 million units,” said Agarwal, “So, when that happens we would like to be a significant player. Our share in this is 35 percent now, and if we continue to maintain the same share in the expanded market, I think it will be a significant achievement for us.”

As it heads into the New Year, OnePlus’ attention will be focused on the performance of its first television offering, the OnePlus TV, and maintaining the sales momentum around the OnePlus 7T. The company is also looking at a launch timeline of about four products per year.

First Published:Nov 18, 2019 7:17 PM IST