Whalesbook
Streamlining Operations Amid Market Challenges
OnePlus is closing its Bengaluru office and consolidating operations in Gurugram, marking a significant shift in its Indian market strategy. The restructuring includes offering employees relocation packages, aiming for greater efficiency and cost management. The company is also accelerating its shift to an online-first, direct-to-consumer (D2C) sales model, leading to the closure of many partner stores. Only three company-owned stores in Hyderabad, Chennai, and Bengaluru will remain open, marking a near-total exit from its traditional physical retail presence. This consolidation comes as the Indian smartphone market faces declining sales volumes, with a 2% year-on-year drop in Q1 2026. While overall market volumes are down, the premium segment remains strong and drives value growth, an area where OnePlus aims to compete.
Adapting to a Competitive Market
This strategic pivot by OnePlus is a direct response to changing market conditions and fierce competition. Reports show OnePlus's market share dropped to 2.4% in 2025, down from 3.9% the previous year. Vivo and Samsung lead in overall sales volume, while Apple dominates the premium segment's value. Samsung, for instance, strongly appeals to premium buyers with aggressive marketing and its product offerings. By moving online and using Oppo's service network, OnePlus aims to cut retail overheads and focus resources on product development and competitive pricing. This strategy capitalizes on the growing consumer preference for online channels and aims to counter rising component costs that pushed device prices higher in 2026. The brand aims for 'sharper pricing and more India-focused innovation,' returning to its roots of offering high-performance devices at competitive prices.
Risks of an Offline Exit
Despite its stated commitment to India and aims for sharper pricing, this aggressive move away from physical retail carries significant risks. Closing partner stores and reducing its offline presence could alienate Indian consumers who prefer evaluating and buying products in physical stores. Losing ground offline could also allow competitors, including its parent company's other brands like Oppo and Vivo, to strengthen their market positions. While OnePlus aims for competitive pricing, broader market price hikes due to component costs could reduce its value advantage. Relying on Oppo's service network, while efficient, might also dilute the distinct brand experience OnePlus customers expect. OnePlus's market share has been falling, with reports of a 30% year-on-year drop by late 2025, suggesting past strategies struggled against rivals like Samsung and Apple in the premium segment. How well OnePlus can execute this online-first model without losing customer engagement and satisfaction is a key concern.
The Path Forward: Online-First Strategy
OnePlus's shift to an online-first model in India is a calculated move to streamline operations and adapt to changing consumer behavior. By reducing its physical stores, the company aims to cut costs and focus resources on digital engagement and product innovation. Expanding its after-sales service through Oppo's infrastructure is meant to address customer support concerns. Success now depends on connecting directly with its digital-first customers, offering competitive prices, and delivering innovative products that stand out in the premium smartphone market.