An interview with the custodian of a hot brand with the quirkiest attitude to media and marketing.
There exists a man who has bought over 100 OnePlus smartphones, for his family. "He messaged me when he bought his 101st one. It's unbelievable," says Vikas Agarwal, the Bengaluru-based general manager of OnePlus India, while looking for this fanatic's text in his WhatsApp inbox, as we settled in for our interview at a café in Mumbai, on a stormy morning.
Why not create a video around this patron? Isn't it great grist for the content mill? The same mill that produces risqué un-boxing videos - (Bunty from Sacred Games, remember?) - and breezy sketches on digital channels like FilterCopy. "We don't want to show off, we don't want to commercialise or exploit our community..." answers Agarwal, who, after starting out as OnePlus' first employee - and only one for six months - is close to completing five years at the smartphone company. And that's exactly how old the brand is in India. Today, the brand's corporate team in this market is less than 100 members strong.
While global executives of the BBK Electronics-owned Chinese brand tout its "killer" positioning, here in India, which is OnePlus' biggest market, marketing catchphrases the team peddles include 'Never Settle' and 'Shot On'. In the premium smartphone segment, the brand competes with Apple and Samsung. OnePlus 6T was the highest selling smartphone in the premium segment in Q1-19, as per the International Data Corporation (IDC).
The Shenzhen-headquartered brand was founded by Pete Lau and Carl Pei 2013 and is present in around 40 countries.
Curiously, most of OnePlus' advertising is done in-house. Agarwal and team have never had an ad agency on retainer. They work with production houses and have media agencies (Starcom, Dentsu, and Amazon's media agencies) but prefer cracking creative ideas internally. Amitabh Bachchan endorsed OnePlus between 2017-18 and 'Iron Man' Robert Downey Jr. was brought in earlier this year.
Agarwal pegs the ratio of online to offline sales in the Indian smartphone market at 40:60 per cent. However, from a sales point of view, his is an online brand: "Offline, OnePlus is present in just three or four chains and those chains account for less than five per cent of the total offline sales of the industry..."
Before joining OnePlus, Agarwal was director of corporate excellence at travel brand Ibibo (part of Naspers, a global internet group), before which he ran a company called Bulb Tiger, a dot com that sold home furnishing products.
You've been with OnePlus for nearly five years. Highlight the milestones...
We're a grounded, humble, simple, one-thing-at-a-time company. We've never really set very ambitious goals for ourselves. Focus for us has always been on - just being there at the end of the year. In our industry, over the last 10 years many companies have come and gone; just surviving is a challenge. Not just for new brands, but existing large brands especially. When we started out in 2014 we didn't know if we'd be able to stand out in this cluttered and competitive environment. So for us, the first layer of success is to just survive. That in itself is an ambitious goal.
The turning point for us was the second year. After the first year, expectations were high. With OnePlus X we entered into a new price segment (lower price point), hoping for a bigger market. That was a small set back, but a big learning. We realised our key users are tech savvy geeks, who're expecting the best from the brand, not a 'compromise solution'. Then on, we decided to focus only on 'flagship'.
The launch of OnePlus 3 was a turning point. Overall, I'll say it's largely luck, but OnePlus 3 really consolidated our position as a genuine brand for the premium segment.
India has always been seen as 'an entry level market for the masses'; it is not really known for the premium segment. It was a landmark for us when OnePlus 5 touched a million units. The market itself is five million units.
How does a smartphone stay premium in India while also playing the volume game? Everyone wants to be 'premium' and 'affordable'...
We don't see ourselves as a volume-focused brand. We don't cater to the masses.
Of India's billion plus population, there are around 400-500 million smartphone users. Typically, every year, a third of them buy a phone again, so the market comprises around 150-160 million people. Of these, only five million people buy a phone that costs more than Rs.30,000; that's the premium market...that's my universe, the 30K to 1 lakh range.
We benchmark ourselves against the best in the industry; and the price differential in that context is where affordability comes in. In a premium segment OnePlus is an affordable, discounted alternative. We make it even more affordable with promotions, cashback, exchange offers, EMI... in India, these additional incentives and sales promotions are important.
On the advertising front, you're big on in-housing - a trend large agencies love to deny. You've never had an advertising agency on retainer - why not?
So far, about 70 of our campaigns have been done internally.
We are not averse to agencies. For every campaign, we do try to go through these agencies, but see... the brand team understands the campaign objectives better than anyone else. Agencies have some sort of an inherent tendency to think from an industry prism, not from a brand prism. They don't prioritise the campaign objectives; for them it is more about being different for the sake of being different. Most of the campaigns we've done are very basic and direct in nature. Agencies don't find such campaigns innovative enough.
Whenever we brief agencies, we also ask all our internal teams to come up with ideas. When we compare the two, in most cases our internal ideas have always stood out more. We have no reason, then, to go with agencies. Most of our scripts are also written internally, by our social media team.
We'd like to have a good agency for the long-term, if we can find one... just that I haven't come across any. They need to understand the brand better.
That's bad news for full-service advertising agencies...
Full service agencies are relevant for bigger corporates. I don't blame them... See, we're a young company in a difficult industry; we're still learning. So maybe it's our fault. Maybe once we figure out the right way of doing it, we'll get them.
Also, we're not big on TV advertising. We don't really see TV as an effective medium at all. It doesn't help with brand building or conversions. TV is good for reach but our primary audience comprises youngsters in metros - they're an OTT audience.
Another reason is time. We try to plan early and give agencies enough time to come back with something, but we always lose time. We started with a two month lead time, then three, then six, but it's still not enough. The problem could be at our end; maybe we're just not able to get those iconic campaigns. Till we get something unique, I'd rather not risk it... let's keep it simple and focus on the bare minimum objectives.
Interesting how you concede the problem could be at your end...
We started advertising very recently; we don't really know how it works. We're entrepreneurial... we don't know the right approach to go about advertising. We've been experimenting and are trying to improve our processes. Think of whatever media we're doing right now as one big experiment. It has not been proven right so far... it's very difficult to correlate ROI on campaign spends, but in the absence of an alternative one does it as hygiene in the hope that it'll deliver. To see ROI, maybe we need to do a bigger campaign. We'll do it when we have the right creative.
Media outshouting is rife in your segment. Yet, OnePlus seems to have a somewhat 'haughty' attitude towards it... how do you define marketing?
Marketing is word of mouth. The first campaign we did with Amitabh Bachchan (2016, for OnePlus 3), in KBC format, was a contest with OnePlus community members, based on Amazon product ratings. The winner got a crore; that guy quit his job, went back to his village and put the money into his agri-tourism resort that gives an authentic Indian experience to foreigners. We want to put all our marketing spend back in the hands of our community and invest in their welfare.
Last year, for our 'Lucky Star' campaign, that celebrated the fourth anniversary of our partnership with Amazon, we let one of our community members buy 1,000 products on Amazon. When OnePlus One was launched, we used the 'invite' model to get users to spread the word. Even today, we've created proxy ways to keep this format going.
Interesting. And what's your media mix like?
Online works best. We are a digital brand; we sell online, we do marketing online.
We do some offline events for our community. For example, the first edition of the Open Ears Forum (a three year old global concept) was held in Goa last year. 30 of our most active users, who are also into tech, came over for a weekend and shared their views on our products... good and bad. The brand team then made an action plan. Techies really enjoy this geekiness; they are more knowledgeable and dig deeper than our own product managers.
TV, OOH and print are becoming footnotes; I don't know how one can make creative better on these channels... there isn't much you can do. But on digital, you can optimise on size, format. We have separate campaigns for YouYube, for Instagram, Twitter.
Airport ads are a good investment; we target lot of business travelers.
Many people ask us why we're not big on TV. It's highly cluttered. We do 10-seconders during cricket matches. It gives us a 'concentrated' audience. It's expensive, but cost per reach is lesser than advertising on all GECs.
There's a big audience that's still not buying OnePlus for different reasons - they may not be aware of OnePlus yet. We're trying to optimise our messaging, promotions and big media spends to acquire these new audiences. Of the 300 million people watching cricket, I'm targeting the five to ten million I need to reach, but it's my best shot at getting them.
What did you mean when you said you're a one-thing-at-a-time company?
We do only one smartphone a year. I don't have backups. Companies easily discontinue a current product line, move to new products and re-boot. That either means you aren't confident enough or haven't put all your resources into a product... I don't have to do all those optimisations.
But I am investing heavily in our after-sales experience.
We've discontinued all external service partners. Over the last two years we've struggled with it.
Now we're creating our own service centres, managed and operated by us - well trained staff, centres are at polished locations like retail malls and not in some corner of the city that's not easily accessible. We want our service centers to be used as lounges, with free internet and coffee. In some of the bigger centres, we have game rooms with Play Station. It can be a family outing.
What do Indians care about most when selecting a smartphone?
Battery, speed (RAM, processor)... and they feel their devices are getting outdated, so they want regular software updates.
User requirements are always basic. I met with Jio, when they were rolling out their 4G network, they wanted to know how to differentiate. Their surveys revealed that people were asking for things like: 'Will I be able to download WhatsApp?', 'Will I be able to play YouTube?', 'Will I be able to move forward and backward on my video screen navigation?'... all so basic.
Let's talk about the soon-to-be-launched OnePlus TV. What's the hard sell - extending equity from the smartphone to the TV segment? Or phone-TV connectivity?
Initially, everything looks incoherent, but over time, there will be natural synergies. The whole experience on TV is broken; although flat screens have been around for long, the 'smart TV experience' hasn't arrived yet. The device ecosystem has not yet evolved.
People use smartphones primarily for content consumption. When you enter the home, you'd want to continue consuming it, and switch from the phone to the TV screen. So we see it as a strong screen continuity experience. IoT is emerging, and a smart TV can be part of 'smart home automation'.
Today, though the smart TV is at the centre of your living room, it doesn't unite a family, like TVs used to. Smartphones have divided us. A smart TV can bring us together again.
Xiaomi entered this space before you...
The way we saw the smartphone industry in 2014 is the way we see the TV industry today. It was a mature market, there were enough brands, we were one of the last brands to come. It'll be similar with TV.
We do everything from a premium experience perspective. We're not in the market share game. I can get market share by doing 10 other things, but TV is difficult. It's not an easy sell at all, especially in the premium segment. It won't be a volume product, we're not making a mass TV.
Speaking of rivals, the smartphone segment has so many similar brands. Do you worry about growth?
We're not going to grow because we'll take market share from others. We don't believe in under-cutting the price, launching a new model just to enter a new price segment, getting more promoters to push the product, or by doing TV and print ads on a daily basis - technically, I can do that whenever I want; it's just a matter of spending money. Those are easy ways to grow the business.
We've not done any title sponsorships of TV shows, cricket shows... the big things smartphone companies do. We just don't find them attractive enough. These are low hanging fruits; you just need to bid and pay money. We don't want to waste resources on this, like our competition.
We're in the business of expanding the premium pie. And it's an under-penetrated market. So we don't worry about competition.
What's your core TG? How is the profile changing?
We're expanding our circle from tech lovers and geeks to everybody who is educated. Geographically, we're expanding from the top six to the top 20 cities. But we're primarily a tier I brand.
With OnePlus 7 and OnePlus 7 Pro we have entered the 50K plus segment - the ultra-premium segment. Of the five million units in the premium segment, two million are in this space. We're targeting CXOs, industrialists, people with purchasing power and a bias towards buying expensive products. That's a new audience for us.
(This interview was first published in our fortnightly print magazine afaqs!Reporter on July 15, 2019).
In a category that's flattened out by technology, prudent marketing is the only way for brands to differentiate themselves. But smartphone brand OnePlus, that operates in the premium sub-segment, has a different, almost elitist, attitude towards marketing, mass media outshouting, and conventional advertising models. And that comes through in almost every answer Vikas Agarwal, general manager of the brand in India, gave me during the course of an hour-long interview.
For one, he is pretty much the poster boy of in-housing, a model that global marketing companies, especially in the FMCG space, are embracing... and that large advertising agencies closer to home either blatantly deny or secretly fear. Maybe I'm biased because I've cut my teeth on the advertising beat at this publication, but when a brand custodian says his internal teams come up with way better campaign ideas than any agency out there, I sit up and take notice. To me, that was the highlight of our conversation.
In good time, Vikas would like to get an agency on board for the long-term, but says he hasn't met his match as yet. "We're still looking; it's been a focus area for the last three years. We do want to streamline things ultimately, but it's not our topmost priority," he says.
Over cups of tea on a rainy morning in Mumbai, Vikas, a Bengalurian, also chatted with me about his media choices and patiently explained what modern day marketing means to him. He deconstructed what it means to be "premium" in a segment where "units shipped" and "units sold" are the primary barometers of success.
Price brackets and lofty intangibles aside, 'premiumness', to him, extends to the physical product too - a screen that's not glaring, smooth, curved edges, and such.
"Why an iPhone... why not OnePlus? One of my friends recently exchanged an iPhone XR for a new OnePlus..." These are the real life anecdotes Vikas lives for.