Oppo begins assembling PCBs in India, plans to launch sub-brand

NEW DELHI: Chinese smartphone maker Oppo has begun assembling printed circuit boards (PCBs) at its new second plant in India and plans to launch a sub-brand, both moves aimed taking on rival Xiaomi, which has become the top player in the world’s second-largest market.

Part of the new Oppo plant’s 50 million phone production capacity and PCB assembly — revealed a few weeks after Xiaomi announced its own new manufacturing facilities including a PCB assembly unit — will be used for the company’s new sub-brand, expected to be launched next month, people aware of the matter said.

The sub-brand will take Xiaomi head on, with the devices priced between Rs 10,000 and Rs 15,000, the growing mid-segment that generates good volumes and revenue. Oppo, which has set up a separate management team for the sub-brand, confirmed the move.


“In the past six months, we have conducted research among online young consumers and found some interesting market insights that consumers actually prefer phones with better appearance, differentiated design with an affordable price, solid build quality and unsacrificed performance,” said Levi Lee, chief product officer of the new brand.

He was asked why the company was taking this route when some others have not had successful stints with the strategy. Micromax had launched its Yu brand of smartphones for the online market — and later offline as well — but they did not made a mark. Local rival Lava too launched Xolo, which has since been merged back into the company.

Oppo’s new brand will also be limited to the online market, where Xiaomi has more than 47% share. Chinese brands have taken their highest share ever — of 57% — in the Indian smartphone market, led by Xiaomi, which has a 31% share, as per data from Counterpoint Technology Market Research.

Oppo, which used to spend aggressively on promotions and marketing over the past couple of years, unlike Xiaomi, has cut margins and channel commissions and even let go off in-shop staff to control costs. Xiaomi, on the other hand, is expanding its offline presence with its Mi Home stores and preferred partner programme.

According to Cyber-Media Research, 38% of the phones sold in 2017 were in the range of Rs 10,000 and Rs 20,000, compared with 24% in 2016, underlining how consumers are buying more higher-priced phones than before. Oppo, the No. 4 player in the Indian smartphone market with a share of 5.6% as of March, as per Counterpoint Research, said that using its own factories and production lines locally to make phones under its new brand will help it control quality and provide better designed products for its target audience, which is mostly the youth.