‘Affordable’ seems to have a new benchmark in India. A few months ago, the American company, Apple, launched its second-generation iPhone SE 2020 and priced at around Rs 42,990 and called it ‘affordable’. Similarly, the Chinese label, OnePlus, has launched its own version of ‘affordable’ smartphone in India, the OnePlus Nord, which sells at Rs 24,999.
The per capita income of India stood at Rs 11,254 in 2019-20 and in such a country companies define affordability by their own methods. It is up to you to decide whether a smartphone at Rs 24,000 or more sounds, looks or feels ‘affordable’ to you.
OnePlus has cleverly placed Nord in the competition and now tries to expand its reach for the below 30K buyers but, does it make sense for a premium brand to look back?
“Generally, if we look at premium brands across product categories that have attempted to enter a relatively affordable segment, the results have not been encouraging. This is primarily because the brands compromise on quality and create a new value proposition on the price-quality continuum. Apple’s C series of iPhones is an example to it,” said Faisal Kawoosa, Founder and Chief Analyst at techARC
Upasana Joshi, Associate Research Manager at IDC India says, “In India, One Plus began operating in late 2014 with an aim to join the league of premium smartphone makers such as Apple or Samsung. They built “a tech fan community” who preferred future-ready phones with the latest specification but not as heavy on the pocket as flagships from other brands. Starting as an invite-only launch on Amazon with its unique referral-based purchase, it really created a unique approach to market and spreader the word of mouth. Over the years, it’s product offerings which are very tech-heavy, superior build quality and designs, brand association through community-based programs, the opening of multiple experience stores, etc., have led to a strong affiliation of loyal customers of OnePlus especially in the uS$400—600 segment.”
The COVID19 has done what trade war, competition, and demand could not do. OnePlus, a brand boasting itself to be the king of premium smartphones, i.e, beyond 30K price barrier, dived complete opposite of what was being expected of it and has defined a new space for itself under 25K with Nord, thus calling it ‘affordable’. This is purely an aftereffect of the Corona pandemic.
The economic situation and the lukewarm response to its last premium flagship smartphone, the OnePlus 8 series, have been the reasons for this reverse gear by OnePlus. The buyers, mainly corporate, did not have cash in hand at that time, salaries were deducted or not being paid at all, thousands lost their jobs in this pandemic, and because of these reasons, the OnePlus 8 series did not see much of buyers.
The ‘Sold Out’ on the e-commerce portal is a different ballgame of marketing. We can never know the exact number of units sold. The same happened with OnePlus TVs as well. The Chinese company brought down the prices of its newly launched TVs, Y, and u series, to Rs 12,999 for the 32- inch model. So you have understood why OnePlus was forced to look back in terms of products and their pricing.
“For the brand, in terms of business, this is a significant move. It has been primarily playing in the premium segment and after 7 Pro launch, it had kissed the Luxe (above 50k) segment. By that journey, it was getting into a less opportunity segment, confining its addressable market. And then in Luxe, we have a dominance of Apple and Samsung. So far the brand’s phones were in a segment that sells not more than 9 million smartphones a year. Now it has widened that to cater to a segment where 12-14 million smartphones are sold annually in India. We estimate OnePlus should be able to increase its sales in terms of unit volumes by 25-30% in the next 6-12 months. This is owing to its strong equity in the premium segment and some level of aspiration in the affordable segment which it has just rung,” feels Faisal.
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