Could OnePlus' integration with Oppo erode its brand value?

OnePlus founder Pete Lau announced the brand's partial integration with Oppo earlier this month. A look at the impact on its brand value.

Earlier this month, OnePlus founder Pete Lau announced that the brand would be integrating some aspects of its business with bigger BBK Electronics sibling OPPO. Lau mentioned that the move would help OnePlus streamline its operations while taking advantage of OPPO’s resources.

Now, unlike OPPO, OnePlus was positioned as a premium offering, an android equivalent of Apple’s iPhone. Like iPhone, OnePlus also offered a distinct product and brand experience, but at an accessible price point. This was being driven and supported by a strong global community of fans.

In its eight-year-long journey, the premium OnePlus identity got its first tweak with the launch of its sub-brand Nord around a year back. OnePlus Nord was launched as an affordable line of smartphones both globally and in India. The move helped the brand widen its consumer base while also expanding its otherwise lean product lineup.

Lau assures that the OnePlus brand will continue to operate independently with the same brand commitments.

However, high-end OnePlus’ getting closer to a massy OPPO could come across as a downgrade. But will it actually affect its brand value?

We asked a few industry experts.

Shubhajit Sen, founding partner, A Priori Consultants (former CMO, Micromax)

The brands have to ensure that the consumer still sees them as separate brands. If you keep a brand completely separate, it is easier to be seen as exclusive. The impact on the OnePlus brand depends on how much it integrates with OPPO. If the brands get too close to each other, like say, repositioning as ‘OnePlus from OPPO’, it will have a major impact.

If they are run as two separate entities on the customer facing side, they can still get away with it. OnePlus was starting to face some challenges as a standalone business. At the same time, Xiaomi is doing a good job of moving up the ladder with it’s new high end Mi 11 models. Same goes for Vivo’s X series.

OnePlus’ cracking the top end Apple-Samsung consumer, is a matter of chance. If the brand had a really good model and the product pipeline was good, it would have a good year. But if it fails, sustainability becomes a serious challenge. OnePlus has faced such a problem with one of its product cycles some years back. Also, there is a lot of negative consumer chatter around the new Nord series.

New innovation in smartphones which consumers flaunted as their familiarity with tech, has dried up in recent years. For OnePlus to maintain its premium positioning in such a scenario is a serious challenge.

It will have more resources now. From a consumer perspective, the brand needs a new center of gravity about what it should stand for. The previous positioning of ‘smart alternative to an iPhone’ is becoming difficult to sustain.

The brands can integrate at the back end like sales, services, etc. or go further upstream with similar components, operating systems, etc. More integration means a better allocation of costs. At a certain point in time, there will be no significant difference between an OPPO and a OnePlus phone. That’s when their ability to charge a premium will disappear.

Divyapratap Mehta, founder, Intertwined Brand Solutions (ex-national planning director, Publicis)

This has happened in other industries as well. The integration of Audi under the Volkswagen umbrella has actually benefitted the latter. Consumers felt that Volkswagen’s quality standards are at par with Audi. Top-down integrations aren’t tough but bottom-up integrations are difficult. There’s a possibility of a positive rub-off on OPPO like how a ŠKODA Octavia gains from Volkswagen’s Audi integration.

Audi hasn’t lost brand value but the lower-end brands gained out of it. But OnePlus has to keep its identities intact. Such an integration allows you to share infrastructure, share resources, etc. If the brand stays true to its values and offerings while maintaining its community and exclusiveness, it will retain and gain equity instead of eroding it. If both the brands can be managed well while gaining from the integration in terms of cost, experience and service efficiencies they can easily survive in a system like this.

N Chandramouli, CEO, Trust Research Advisory (a brand intelligence and data insights company)

The more brands you have in a stable, the costlier it is to maintain. Each of the brands runs independently and requires independent resources like, manpower, brand building, marketing budgets, time and everything else. It’s not just brand strategy but product strategy too. The products and pricing will gravitate towards each other. Such a move conserves a huge amount of cost. It’s like a merger of two companies which were one in the first place. They can carry on the OPPO stable closer to the higher OnePlus price range.

OnePlus won’t lose anything. Over years OPPO could be absorbed into the OnePlus identity and Vivo could takeover the OPPO range of products. Over that, it is an extremely competitive market and brands have to be constantly on their toes – like a 24*7 sprint. It’s really tough to keep up.