OnePlus: A Chinese Tech Startup Aiming to Disrupt the Global Smartphone Market

Abstract

This case is about the meteoric rise of OnePlus, a Shenzhen-based technology startup that gained global attention for its high-end, low-budget smartphones sold directly to consumers online through an innovative invite system. Founded in 2013 by former OPPO executives Pete Lau and Carl Pei, OnePlus was one of the fastest growing Chinese startups. It made a global impact in a short time with its sleek devices, low prices, and invite-only exclusivity. The company positioned itself between low-cost smartphone companies like Xiaomi and high-end producers like Apple and Samsung and significantly undercut them on price, despite closely matching them on features. Right from the outset OnePlus promoted itself as a global company with a global mindset. The case highlights the business model of OnePlus, which was built around razor-thin margins and giving value back to its users in the form of low prices. The company sold its phones at cost through an invite-only system, which allowed it to gauge and fulfil demand accurately and avoid the risk of keeping unsold inventory. OnePlus primarily focused on viral marketing and community interaction such as word-of-mouth advocacy and social media to spread brand awareness. Considered a low-cost rival to Apple, OnePlus's core strengths were an obsessive focus on product design and quality, branding, and customer engagement. However, OnePlus also drew criticism for selling its phones through an invite-only model, as this limited those who could buy the phone and left some customers disappointed. The company also struggled to meet the growing demand for its products as it maintained little inventory to control costs. The case discusses the challenges faced by OnePlus in the crowded global smartphone market and how survival was of utmost importance for the company amid tough competition and slowing economic growth in China. The challenge before Pete Lau and Carl Pei was how to sustain lower prices, make profits, and achieve global success going forward.