The emergence of China cool

OnePlus set out to make the best Android Phone and set a reasonable sales target of 50,000 units for their debut device – the OnePlus One. That device sold over 1.5 million units yielding the company over $300 million. Last week within 3 days of its debut, 1 million people requested an invite to buy the OnePlus Two, confirming that the success of the OnePlus One was no fluke. The company envisioned the OnePlus One as a flagship killer and it did create a huge impact but the success of OnePlus’ underlines another trend that is redefining the smartphone space – the strong emergence of brands from China.

The engine room:

China’s tryst with mobile devices began way before the smartphone era, the country became the manufacturing hub for mobile devices. In the year 2000 about 52 million handsets were manufactured in China (Source: Statista). In 2014 1.2 billion smartphones were shipped representing two thirds of all mobile devices (the other one third is still feature phones) and more than 90% of all these phones were made in China. This staggering growth has virtually made China the engine room of the mobile phone industry with almost every global brand sourcing from the country.

The value for money paradigm:

Manufacturing was clearly China’s forte but it took a while for the first Chinese brands to arrive. Huawei one of China’s largest conglomerates and a major player in the country’s telecom space was one of them. It rode heavily on a strong value for money positioning and not surprisingly that became the credo for most Chinese brands. Brands like Lenovo followed suit with a slight price advantage over devices with similar features but Chinese devices still lacked the key ingredient – the cool quotient.

The cool quotient:

Ultimately we all want to proudly display our devices at a meeting or when we’re out with our buddies. Chinese brands would normally hide in pockets and clutch purses until recently; and then something changed. It could be the debut of ‘disruptive’ brands like Xiaomi and OnePlus who dared to think differently and focus on what a new generation of consumers are looking for. For instance the OnePlus two did away with NFC, because the brand felt no one really needs it just yet, not until smart payments truly take off. What these brands did was not just make cheaper phones but create an aura around their brands backed by a solid spec sheet and great design. In doing so they completely knocked the country equation out of the smartphone. A few years ago consumers judged mobile brands by country, suddenly nobody cares. Brands like Xiaomi and OnePlus are not sold as Chinese brands but have become cult brands in their own right and yet what they have done is broken all the earlier myths about Chinese brands being ‘uncool’. 10 of the top 17 smartphone brands (in the global sales sweepstakes) are now Chinese with Xiaomi, Lenovo and Huawei now in the top 5 along with Apple and Samsung. Interestingly quite a few of these Chinese brands will soon start manufacturing in India.

The players:

Xiaomi: In under five years this brand has grown to become the world’s third largest smartphone maker (Source: IDC). A clutch of bestsellers (Mi3, Redmi Note, etc.), flash online sales and a strong value proposition have all helped this brand develop serious traction in the Indian market with a cult following.

OnePlus: They said flagship killer, the big brands might have rubbished the claim but 1.5 million units is no small achievement for a single device and OnePlus Two looks set to emulate that success. There’s another big device coming for Christmas and this company’s brilliant blend of top-of-the-line hardware specs, cutting edge design and a clever ‘invitation only’ (reminiscent of Gmail in the good old days!) strategy is clearly working.

Lenovo-Motorola: Motorola’s brand DNA might point back to the US but for all practical purposes this is a Chinese brand owned by Lenovo. When you add Lenovo to the brand mix it is a formidable combination with devices that cut across price points and form factors.

OPPO: First it was the revolving camera that made the front cam a non-issue, then it was the Quad HD display that arrived slightly ahead of LG’s G3 and finally the R5, an ultra-slim design with brilliant aesthetics.

Huawei: In many ways the first mover and has expanded its product portfolio to include tablets and wearables. It’s not all just value-for-money devices, the company has cracked the premium game even in evolved markets like the US with devices like the Huawei Honor.

Gionee: Has become almost synonymous with the ‘slim phone’ from the debut of the S5.5 (In 2014) that was then the world’s slimmest phone to the S7 its newest slim device. Gionee has also created a buzz around the mobile shooters on its flagship devices like the ELIFE E7 and the upcoming ELIFE E8.

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