OnePlus, the Chinese smartphone maker, will maintain the prices of its current lot of devices in the market, although new stock coming in after three months will cost more due to the rupee’s depreciation against the dollar.
The company, which has the largest share of India’s premium smartphones, is expanding in the country, which is its second global base after China. It is entering the offline space to target higher volumes, starting a local R&D centre and switching over to its own network of service centres to keep a tighter control over operations.
“Now, what we are selling is all locked in for three months. As of now cost pressures have not hit, but going forward, all future supply will come at a higher price,” Vikas Agarwal, general manager at OnePlus India, told ET.
The rupee fell to Rs 72.56 against the dollar on Thursday from Rs 65.03 on March 30. New supply contracts are being signed at higher rates than earlier to reflect the currency movements.
“We’re highly dependent on China for sourcing of mobile components... handset makers will have to shell out more money for new contracts that are signed,” said Hanish Bhatia, a senior analyst at Counterpoint Technology Market Research. “In the long term, it will create pressure on Indian handset OEMs to either absorb the cost or pass on the same to consumers.”
OnePlus, which competes with Samsung and Xiaomi, among others, in the premium segment, is targeting 25 self-owned service centres this year, of which 14 are operational. It is bringing its global contact service operations to India to support markets in the US and Europe.
Agarwal said OnePlus is experimenting with initiatives in India, which, if successful, can be replicated in other markets. The company will set up a dedicated research and development centre for the Indian market by December-end.
“The centre will initially be focusing on India-specific product feature developments, but in the long term will support global product development,” Agarwal said.
The company is expanding its offline presence, adding to the almost 120 touch points, including 100 Croma stores. In addition, it is opening six large experience centres that will also accept devices for servicing. It is set to open eight authorised stores through a franchise partner.
“The idea is to have one experience story in every big city, and authorised store can be opened as long as it can be self-sustainable. We don’t want to lose money while running offline stores. We want these stores to be profitable,” the executive said.
Agarwal emphasised, however, that OnePlus will primarily be an online brand. Entering the offline channel was to enable people to experience the product since many potential customers are not comfortable buying phones online.
“…to expedite the growth, we also want to be more proactive in creating an offline destination that can lead to the online sales conversion,” he added.