 "Pete Lau, Founder & CEO, OnePlus")
As it is looking at rapidly expanding into the Indian market, smartphone manufacturer OnePlus has partnered with contract manufacturer Foxconn to build its devices locally.
The Chinese company is experimenting with its new OnePlus X smartphones before manufacturing its entire product range out of India.
“We have a partnership with Foxconn for local manufacturing. We are going to have a deeper integration with them,” Pete Lau, founder and chief executive of the Shenzen-headquartered company told this newspaper. “Our goal is to have 90 per cent of the (OnePlus) devices sold in India be manufactured out of India by the end of 2017.”
Unlike most other Chinese brands, OnePlus was incorporated in December 2014 with prime focus on global markets such as the US, Europe and India. The phones made a debut in India about 14 months earlier, through e-commerce major Amazon, its exclusive partner for the region.
The company does not give sales data but the phones, mostly around Rs 20,000, have seen good acceptance among Indians who look at premium products at a mid-range price.
“We are taking a step-by-step approach. Right now, we are taking our OnePlus X phones and doing testing for local manufacturing at the Foxconn facility. We have to ensure the quality of the product manufactured here remains intact,” said Lau.
OnePlus has entered into a partnership with Foxconn wherein the latter would manufacture the former's phones at its facility in Sri City Integrated Business City, in Andhra. The facility would have a cumulative peak production capacity of 500,000 units a month, which could mean direct employment for at least 1,000 full-time workers, the company had earlier said.
Lau said the company was also looking at introducing features unique to Indian users, whether content or integrated apps for online payment and e-commerce, to provide better user experience. OnePlus is looking at hiring a team of product managers in India who understand users’ habits.
“We need to localise the products with the growing user base," he said.
India, said Lau, had far exceeded the company’s expectations, despite the OnePlus phones addressing a premium segment. “When we first entered this market, people used to tell us ‘you can perhaps sell a couple of thousand devices, as the size of the market for Rs 20,000-plus products is very small. We far exceeded those numbers and expectations,” he said. “We are looking at long-term growth. We are looking at 10-plus years down the line, when the market for such phones would be much bigger than today.”
According to various estimates, the mobile phone market in India is estimated to be around 100 million units a year. The segment OnePlus addresses is said to be around six per cent of the overall market or six mn units.
Among its three major focused marketsy, India is the only region where the company sells its products in partnership with an e-commerce company. In America and Europe, it sells through its own e-commerce portal.
"As a company, we have always strived to improve our operations by making us more efficient, so that we can pass on the savings to the consumers. For example, we save our margins because we don't sell offline. We also save on marketing because we don't do traditional way of marketing," Lau said.
