OnePlus: A Chinese Success Story in India
| Case Code: MKTG419 Case Length: 16 Pages Period: 2014-2020 Pub Date: 2020 Teaching Note: Available |
Price: Rs.500 Organization : OnePlus Industry :Smartphone Manufacturer Countries : India Themes: International Marketing/ Business Strategy/ International Management/Globalization Strategy |
Abstract Case Intro 1 Case Intro 2 Excerpts
Excerpts
Global Strategy
Aiming to build a global brand, Lau and Pei positioned OnePlus as a global company with a global mindset. Unlike other Chinese smartphone makers that focused on the domestic market before going global, OnePlus began focusing on foreign markets from the outset. Despite its roots being in Shenzen, OnePlus began its journey as a global company, originally launching its flagship product OnePlus One in 16 countries across North America, Western Europe, and East Asia. Ever since then, the company had been selling its products in various global markets. Lau said, “From the day we launched, we began as a global company. Ours is not a Chinese company mindset.” ..
Entering India
India, with its population of 1.2 billion as of 2014, was the world’s fastest-growing smartphone market. A growing middle class with increased disposable incomes and a surge in the population using the internet had turned India into a lucrative market for Chinese players who offered cheaper alternatives to high-end iPhones or Samsung devices. Initially, OnePlus did not intend to enter the Indian market. However, it noticed that thousands of OnePlus devices were being shipped from China and the US to India. ..
Teething Troubles
OnePlus initially faced some operational challenges in India. On December 16, 2014, the Delhi High Court, acting on a complaint from Micromax Informatics Ltd (Micromax), ordered OnePlus to stop the shipping and sales of OnePlus One smartphones in India. In its complaint, Micromax claimed that OnePlus had infringed on its exclusive right to use the Cyanogen OS software and trademark in the country. It stated that OnePlus was selling devices embedded with Cyanogen OS in India despite knowing that Micromax had an exclusive partnership with Cyanogen that prevented any other company from selling Cyanogen-powered devices in India, including OnePlus. ..
OnePlus’s Strategies in India
In India, OnePlus focussed on delivering the best flagship smartphones with high-end specs at affordable prices to customers. Each and every model since the OnePlus One delivered unmatched value, giving users phones that were similar to or better than what competitors were selling at double the price. For instance, OnePlus 6T came with a price tag of less than Rs 50,000 while its competitor Apple’s smartphone products were priced close to Rs.90,000 per unit. “OnePlus’s strategy of packing the best specs into their phones and offering the most competitive price seems to have helped. Its pricing strategy has appealed to the cost-conscious and flagship-aspiring consumers in India who want to own the ‘best’ smartphone in the market but at a competitive cost,” said Rushabh Doshi, a research manager at Canalys...
Challenges
OnePlus had a history of releasing a new phone model every six months or so with a standard release in the spring, followed by a T series release in the fall. The company generally phased out the older model from the market once a new model was released. For instance, a user who bought OnePlus 6 would find his/her phone obsolete in roughly six months...
The Road Ahead
According to analysts, India would continue to be a critical market for OnePlus’s growth as the number of smartphone users in India would reach almost 500 million by 2022 from 337 million in 2018 (See Exhibit VII). Though the premium smartphone segment in India accounted for merely 5% of the overall industry,..
Exhibits
Exhibit I: Indian Premium Smartphone Shipment Market Share (Q2 2019)
Exhibit II: Global Premium Smart phone Market share
Exhibit III: OnePlus India: Product Portfolio
Exhibit IV: Indian Premium Smartphone Shipment Share
Exhibit V:Countrywise Smartphone User Growth (2013-2018)
Exhibit VI: India Smart Phone Market Top Five Companies Shipment in Millions, Market Share Year on Year Growth – 2019 Q2
Exhibit VII: Number of Smartphone Users in India from 2015 to 2022 (in millions)
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