OnePlus wants India to drive global R&D with Rs 1,000 Cr spend: India GM Vikas Agarwal
As India goes digital, Chinese smartphone maker OnePlus has conquered the premium segment of the industry with a 40-percent market share, according to Counterpoint Market Monitor. It has taken it five years to get there. The company has a lean business model: it has optimised marketing spends by focusing on its community and has kept distribution costs low.
In 2015, the smartphone manufacturer wanted to enter India with a focus on youth, experience, and remaining digital. Now the company is all set for its music fest in Mumbai on November 16, bringing in international artistes like Katy Perry and Dua Lipa to celebrate its community. OnePlus is also pumping Rs 1,000 crore into its India R&D centre, as the country figures big on the company’s global growth plans.
YourStory caught up with Vikas Agarwal, General Manager, India, OnePlus, to understand OnePlus’ journey in the country so far. Vikas explains how the company focused on community for feedback and upheld it as a golden rule not to treat the community as part of marketing.
Edited excerpts of the interview:
YourStory: Can you tell us about the phenomenal growth that OnePlus has seen over the last year or so?
Vikas Agarwal: Globally, we had two good moments. We launched our 5G handset and figured in the top four in the premium segment globally. However, the real star this year has been India. We are the biggest in India and we are number one in the premium segment with a 40 percent market share.
For the last 10 years, only two brands dominated the segment and for the last two years we have grown to the top. We have also grown multiple counts in India. We have started exports from India, have an R&D centre being set up out of India, and we have a global contact centre running. The last quarter has been the quarter for us globally. And our core fundamentals remain the same: we are a product-driven company and our success has been because of our community.
We have built the brand through our community. The OnePlus One was on an invite-only basis, but we built the product based on the community. Product and community are the reason why we were successful. The community is in the age group of 18 to 35 and are digital-savvy customers. We used Amazon in the beginning to sell and the community created a great story for us on various forums.
India is a unique and must-win opportunity for us. India is the least-tapped market for brands, and everyone has an equal opportunity to capture this market. The fundamentals are strong here because 65 percent of the population are youth and we have a very stable government.
We now have our biggest community event coming up to celebrate our five-year anniversary. This year we are celebrating it in Mumbai on November 16. Mumbai and Pune are a big market for us. Music is the way to work with our community and there will be a lot of benefits for the community. These events create brand awareness.
YS: What are the opportunities in India when it comes to technology?
VA: The real opportunity for India is to lead in modern and cutting-edge technologies. As I mentioned earlier, we are manufacturing here for exports, but the bigger opportunity is in R&D. We are developing new technologies out of India and we are building 5G and IoT in Hyderabad. We are building new technologies for the smartphone and the TV.
Artificial intelligence is a revolutionary technology, but only a few AI use cases have been developed. It is a few years away. We have used machine learning in our devices, but we focus on developments that are bigger. To that end, 5G and IoT make sense for us today. Playbook for us is word of mouth and engagement with the community. We do not want to dilute the power of community by leveraging it as marketing.
YS: What advice would you give startups regarding product and marketing?
VA: One should never spend on marketing in the beginning. A startup should win the market by word of mouth and with the community. In the early days you would not have a lot of money to spend on marketing. So let the product make money and then spend money on marketing.
At OnePlus, we do not spend on advertising; we focus on the community. The music festival is our way of telling them that we are giving back to them. Product always comes first and identifies your core users. Once you have that then you can start profiling better and diversifying to a larger user group.
We are always going to be focused on youth and those we can reach out to with limited resources. Our audience does not spend on platforms like print. Our audience spends time on online games and music. If you know your audience it is easier to latch on to them.
YS: Can you tell us why India is important to your global strategy?
VA: India is a soundboard for all experimentation. I think through India we understand the pulse of the customer. Globally, we are offline first and have partnership with telecom operators. In India the next wave of growth comes from offline customers. This new audience wants to experience OnePlus. Take the OnePlus TV, for example. The audience would like a touch-and-feel experience before buying.
Many Indians still hesitate to buy online so we need to create experience stores. We are setting up a franchise model and offline stores. We will have large format experience stores and bring international standard retail to India. The next store in Hyderabad is a 16,000sqft experience zone.
Even after 12 years of great growth in the smartphone industry, the premium segment is only four percent. We need to make it easier for the next set of audience to experience the product. The premium segment is a sizeable market. It is not as crowded as the entire industry. It is difficult for any new product to enter the market because you need to have experience, product, and great customer service. It has a high entry barrier and it has taken us five years in India.
We always knew who the OnePlus customer would be from the beginning and we always wanted to go to the online user first. It is important to create a forum for our community to engage with us. Our TV is premium because we wanted to create the best experience for the family.
We will have tie-ups with modern retailers where there will be a dedicated person from OnePlus to showcase the product in an experience zone.
We are also scaling up our exports. We will increase our R&D team to 500 next year from 250 this year. We are investing Rs 1,000 crore and we want to have a large R&D centre. We love freshers and young graduates. We will groom them to grow with the company.
(Edited by Evelyn Ratnakumar)