Retailers in southern India threatened to stop selling OnePlus smartphones starting in May as China-based smartphone brands are facing hurdles in a market they once viewed as lucrative.
According to Hindu Business Line and CNBC-TV18, the Organised Retailers Association (ORA) has issued a strong warning to OnePlus, announcing its intention to halt the sale of OnePlus products starting May 1. This decision stems from several unresolved concerns raised by the association, primarily focusing on the low-profit margins associated with OnePlus products. ORA urged OnePlus to address these issues promptly to prevent disruptions in sales.
According to the reports, at a meeting held on April 10, the association highlighted the financial challenges retailers face due to narrow profit margins on OnePlus devices. Rising operational and financial costs have further exacerbated the situation, making it increasingly difficult for retailers to sustain their businesses while selling OnePlus products.
Furthermore, the association expressed disappointment over the continued delays in claim processing, which have led to customer dissatisfaction and additional burdens for retailers. ORA president Sridhar T S pointed out that mandatory bundling of products or services with OnePlus devices has limited retailers' flexibility, resulting in stagnant inventory and sales losses.
According to the association's official website, ORA was formed in 2021 and covered 20 retail chains with 4,300 outlets in southern India. Its members include Poorvika, Big C Sangeetha, Happi, B New, etc.
In 2023, while smartphone shipments in India saw a modest 1% year-on-year growth, OnePlus stood out with its remarkable shipment surge. IDC reported that OnePlus, a sub-brand of Oppo, experienced a substantial 48.7% growth in shipments, propelling its market share from 4.1% to 6.1%. Meanwhile, Counterpoint suggests that OnePlus' impressive performance can be partly credited to its expansion into offline retail stores.
The ORA's plan against OnePlus came amid continued headwinds faced by China-based smartphone brands in India, with Xiaomi and Vivo accused of tax evasion and money laundering. Reuters reported that Xiaomi had told New Delhi that China-based component suppliers were wary of setting up operations in India amid intensified scrutiny against Chinese companies.
