Over 4,500 major retail stores across Bengaluru, Hyderabad, Mumbai, Gujarat, Andhra Pradesh, Chennai, Coimbatore, Vellore, Visakhapatnam, among other regions, are expected to discontinue sales of OnePlus devices starting May 1, people in the know said.
This is because of reasons such as OnePlus’ unprofessional approach towards offline retailers, pricing disparity between online and offline, weak margin structure, and significant delay in claim settlement.
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Notably, these retailers namely Poorvika Mobiles, Big C Mobiles, Pai International Electronics, Sangeetha Mobiles, Cell Point, The Chennai Mobiles, King Mobiles, among others, represented by South India Organised Retailers Association (ORA) account for over 40% of the mobile phone business across South India, and have presence in other regions as well.
“Throughout the past year, we have encountered significant obstacles associated with selling OnePlus products, which remain unresolved,” said Sridhar TS, president ORA, in a letter to Ranjeet Singh, sales director at OnePlus. A copy of the letter was seen by FE.
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This comes at a time when OnePlus is looking to increase its offline presence in the country. It is looking to add over 200 experience stores across India, with a focus on increasing the consumer base in tier 2 and tier 3 markets.
“Consistently low profit margins on OnePlus products have made it challenging for us to sustain our businesses, particularly amid rising operational and financial costs,” Sridhar added. Currently, OnePlus offers about 5% margins to retailers, for selling its smartphones, compared to other brands such as Samsung offering up to 17% margins as well.
Further, retailers have also expressed concern over continued delays and complications in processing warranty and service claims by the company. “This has led to customer dissatisfaction and added burdens on our end, despite repeated attempts to escalate and resolve these issues,” Sridhar said.
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This is not the first time offline mobile phone retailers have experienced difficulty in doing business with OnePlus. Earlier, the All India Mobile Retailers Association (AIMRA) flagged concern over ample stocks of OnePlus products available in the grey market being sold at lower prices. Retailers also accused OnePlus of prioritising its exclusive stores, large format retail outlets and online channels which created supply shortages in offline retail channels.
Besides, mandatory bundling of products or services with OnePlus devices, is also one of the areas of concern for the retailers, they said.
“Regrettably, the ongoing issues have left us with no alternative but to discontinue the sale of your products in our stores. We urge OnePlus to proactively address these concerns before April end,” Sridhar said.
According to IDC, OnePlus had a 6.1% market share in the smartphone market in 2023. The company continued to lead the mid-premium segment (Rs 30,000-50,000) with 35% share.
