In less than four years since its launch in India, a Chinese smartphone brand has overtaken the likes of Apple and Samsung in the country, thanks to what the company calls its word-of-mouth strategy.
Shenzhen-based OnePlus, which debuted in India in December 2014, has been touted as a “flagship killer” since its early days. By this February, it held a 48% share of India’s premium smartphone segment, according to the International Data Corporation.
“I think people probably get confused and assume we do [a] ton of marketing but we don’t,” Kyle Kiang, OnePlus’s global marketing head, told Quartz in an interview in Mumbai on May 17. “Part of our business model is to focus most of our resources on [the] product.”
Although it has Amitabh Bachchan, one of India’s highest-paid actors, as its brand ambassador, the fan base that OnePlus has created in India is the bigger growth-driver.
“The feedback on their products have been really good and they’ve built up brand equity over the last two to three years by not scattering across different price brands and instead focussing on one,” said Tarun Pathak, associate director at Counterpoint Research.
This “community-building” strategy that helps the positive feedback on products get around is not unique to India. The company has successfully used it in other countries. Italy and Germany, for instance, have seen OnePlus pop-ups and monthly events. The OnePlus 6 global launch event in London on May 16 saw over 1,500 OnePlus community members attend. In India, too, the company plans to keep thousands of users engaged with similar tactics.
Apart from large- and small-scale offline meets and giveaways, these community-building efforts work on the back of social media channels – a far more cost-effective strategy than traditional media.
“TV ads and billboards are quite an expensive affair in India. Just prime time ad rates must be really out of budget for a lot of brands looking to be profitable and struggling for margins,” Rushabh Doshi, an analyst at Singapore-based market research firm Canalys, said. “In a world where social media is everything, [community-building] is a different kind of placement marketing.”
However, the OnePlus community might have plateaued in India, so the days of bare-bones marketing spends may well be over. “Not investing heavily in marketing is a good strategy to control cost but difficult to scale up,” Doshi explained. “[Rival] Xiaomi also followed the same strategy but now, to build market share, we’ve seen it go all out with the Katrina [Kaif] campaign.”
So far, this community building has not only helped OnePlus attract newer buyers, it has nudged existing users into upgrading. “If you have a OnePlus 5, there’s a high chance you’ll upgrade to the OnePlus 6,” Pathak of Counterpoint Research said. Apple is perhaps the only other premium brand in India where users display such loyalty.
Timing and strategy
It helped that OnePlus entered India at a time when “there were not many options in the premium segment – just Samsung, LG and Apple,” Pathak said. OnePlus’s premium models are also priced more competitively than those of Apple – at Rs 34,999 [$514], the OnePlus 6 is priced 65% cheaper than Apple’s latest iPhone X, which costs up to Rs 1 lakh in India.
In a country where over half the smartphone sales happen online, OnePlus, too, is largely e-commerce driven. Its long-running partnership with Amazon has especially worked in its favour, according to experts.
However, the firm is exploring the offline option, too. “I think we’re finding users appreciate the offline opportunity to explore the brand, [and] get service and support,” Kiang said. The company opened its first offline experience store in Bengaluru last year and has plans to set up five more.
Concentrating on a singular price bracket can be limiting, though. The size of the market where OnePlus is competing in India is still very small. Phones in the over-Rs 30,000 band comprise just 4% of the total, Pathak said.
Still, OnePlus is not worried. “We have a philosophy: our only real competition is ourselves,” Kiang. “If we continue to make good products, we’ll continue to grow. As long as we do that, we don’t have to worry about anybody else.”
This article first appeared on Quartz.
Respond to this article with a post
Share your perspective on this article with a post on ScrollStack, and send it to your followers.