Economics of OnePlus

This case is about the pricing strategy of OnePlus, a Shenzen-based technology startup that made a mark globally in very little time with its high-end devices, killer price tags, and by-invite exclusivity. OnePlus positioned itself between low-cost smartphone companies like Xiaomi and high-end makers like Apple and Samsung and significantly undercut the latter on price, despite closely matching them on features. The business model of OnePlus was built around razor-thin margins and giving as much value back to its users as it could in the form of lower prices. The company sold its phones at cost through an invite-only system which allowed it to gauge and fulfill demand accurately and avoid the risk of keeping unsold inventory. OnePlus shunned conventional marketing, sold devices exclusively online, maintained razor-thin margins, and had a limited product portfolio. Going forward, the challenge before its founders, Pete Lau and Carl Pei, was to sustain lower prices and turn profitable as the company increased in scale. .