The Q3 2023 IDC data shows #OnePlus at the No. 6 position with:
i. a 6.2% market share by volume.
ii. a growth of 50% over Q3 2022. The only other brand which had a similar growth rate in Q3 was POCO.
iii. a 29% market share in the affordable premium segment, making it the leader in this segment. As per reports, the Nord CE3 Lite contributed to 35% of their shipments.
The chart below shows the market share and shipment volumes of OnePlus for Q2 and Q3 for 2022 and 2023. One can observe an increase in QoQ volumes. At the current rate they should easily cross the 10 million figure in 2023.
A snapshot of OnePlus’ journey For a brand which entered the Indian market in 2014, the growth has been indeed good. If ‘flash sales’ online was the unique approach taken by #Xiaomi when they launched their first device, the “exclusive invite only” approach creating a sense of ‘scarcity’ and thus FOMO (Fear of missing out) was a very good initiative taken by OnePlus. The device received rave reviews from critics and users alike, who praised its high-end specifications, sleek design, and the great user experience. Another factor that contributed to OnePlus’ popularity in India was its value proposition and the pricing strategy. The company offered flagship-level features and specifications at a competitive price point, making its devices attractive to both existing and new smartphone users.
OnePlus soon managed to build-up a strong brand image gaining a loyal fan and engaged user base in India, who called themselves the “OnePlus Community”. The community actively participated in online forums, social media platforms, and offline events. Giving the Indian market its due, OnePlus unveiled its largest ever experience store globally in Bengaluru named “OnePlus Boulevard”.
They “Never Settle “ slogan and “Unleash The Speed” tagline encapsulates their commitment to innovation, quality and customer satisfaction.
OnePlus has launched several successful devices in India with social media (tie-up with OTT platforms, actors, models, social media influencers) being their key focus, with a fair share of traditional marketing and above-the-line projects. Just to put things into perspective, OnePlus has a strong following on social media with 2.6 million followers on Twitter and 3.8 million on Instagram. Xiaomi has exactly half the followers even though they have been the No. 1 brand till about a year back.
The company also expanded its product portfolio to include the Nord series to have a presence in the growing mid-price segment in the Indian market. The company listens to customer feedback and incorporates it into its product development and improvement. For instance, OnePlus partnered with Swedish camera maker Hasselblad to enhance the camera performance of its OnePlus 9 series, which was one of the most requested features by its users.
OnePlus has consistently been amongst the top 3 brands in the Indian premium smartphone segment (above Rs. 30,000), which is one of the fastest-growing segments in the country. As per First Post, two of the top 5 best phones under Rs 40,000 in Aug-Sept 2023 would be OnePlus phones.
The Way Forward
The company today has an omnichannel presence be it online or modern trade, its own experience stores, its own online platform oneplus.in, its pop-up stores and traditional offline. However, with offline gaining importance specially in the price segment in which they are playing, they need to up their efforts. Their offline presence is not that strong and I feel they should target the top 20% top counters in India from the pool of 150k which can offer the experience OnePlus expects from the retail.
They are strong contenders to be in the top 5 brands in India if they are able to give the offline channel its due by focusing on presence in the right counters, the right distribution model, availability of stocks and slightly improved channel margins/schemes. If experience is what they want to offer, slightly higher margins should do them well. On the offline distribution front, while some areas complain of stock shortages, some are happy with the supplies. Seems to be either specific distributors linked issues or an issue of incorrect stock allocations which needs to be addressed on priority. The team needs to keep a check on whether the distributor is indeed feeding the market or wholesaling stocks as it seems in some areas in North.
Needless to say, if they do not address these issues fast, they could meet with challenges not only from the existing brands in this segment but also Honor which should be coming in with more devices in Q1 2024, mostly in the same price segment as OnePlus. One must also not discount Nothing from the ex-co-founder of OnePlus which is slowly but steadily gaining ground.
The other thing is getting their priorities right. On devices, first they wanted to go premium, then for volume with Nord series then into televisions & accessories possibly to create an eco-system. One can understand audio products, wearables and chargers in their product portfolio but why monitors and keyboards? Allegedly they now want to move out of TVs. These random additions and subtractions may not be right for them as a brand.
My suggestions
Focus on mobile phones as the primary product. The addition of the OnePlus Open folding phone, considering the growing premium and ultra-premium segment and the rise of folding phones is a good move, but they have to address the green line issue being reported by some users. Lifetime warranty of replacing the screen in case the issue comes up as I have read, may be a temporary solution.
They also need to work on filling the gaps in the offline channel as suggested earlier, improving their stock availability, feeding the right stocks, and letting the offline channel make some reasonable profit % either as direct margin or as scheme.
Last but not the least, offer a ‘WOW’ service experience which a customer for premium phones would expect. Some lapses have been reported on this on social media.
Future Outlook
A recent study conducted by research agency #Techarc shows that 81% of the OnePlus users would like to continue with the brand. For Samsung and Vivo, the figure is lower at 67%. With the brand image, acceptance amongst the large youth population, stickiness, momentum, and the corrections suggested, they may not only be able to ward-off the challenge they will face from the other brands – both old and new – eyeing the mid premium segment, but also move into the top 5. After all India is one of the key markets for OnePlus and as they grow the challenges will also grow.