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China's Oppo to build 550 service centers in India by year-end

Company gets approval to open single brand retail stores

Indian news anchor Kubra Sait takes a selfie at the launch of Oppo's F1S smartphone in Mumbai on Aug. 3, 2016.   © Getty Images

NEW DELHI -- Betting big on India, one of the world's fastest growing smartphone markets, Chinese handset maker Oppo plans to build 550 service centers across the country by the end of 2017.

These centers "will cover all regions [across] India, so that all our consumers experience more efficient and better services," Oppo India said in a statement on Wednesday.

Earlier in the week, the Indian government approved the company's plan to open retail stores selling only its own brand products, in addition to its existing wholesale business in the country.

Oppo advertises aggressively across India, including here in the southern state of Kerala. (Photo by Yuji Kuronuma)

Foreign single-brand retailers must source 30% of products locally, according to Indian rules. But the government eased this rule last year, saying the overseas single-brand retail entities trading products with "state of art" and "cutting edge" technology would be exempt from the sourcing requirement for up to three years.

Analysts said the waiver granted to Oppo may also benefit Apple which is keen to open its own retail stores in India. "It is just a question of time, they [Apple] will also get it [the approval]," Arvind Singhal, chairman of retail consultancy Technopak Advisors, said.

Oppo, which entered India in 2014, said its plans to open 550 service centers by year-end will help it extend better services.

"India has become the most important market for Oppo besides its domestic market," it said.

According to the Business Standard newspaper, Oppo aims to invest about 22 billion rupees in a new manufacturing facility in northern Uttar Pradesh state, where it already has an assembly unit that started operations a year ago. That unit has already reached full capacity.

In the April-June quarter, China-based vendors -- including Xiaomi, Vivo, Oppo and Lenovo Group -- accounted for 54% of the smartphone market in India, while domestic brands controlled only a 15% share, according to research company IDC.

Vivo and Oppo are both owned by BBK Electronics in Guangdong.

But South Korea's Samsung Electronics retained leadership of the market with a 24% share, a marginal 4% decline over the same quarter last year; followed by Xiaomi with 17%; Vivo with 13%; Oppo with 8%; and Lenovo group including Lenovo, Motorola and ZUK brands with 7%.

"Oppo has strengthened its portfolio in the $200-$300 segment and aggressively positioning itself as a strong competitor in this segment," the IDC said in its Aug. 16 report.

India, a country of over 1.25 billion, is the world's third-largest smartphone market after China and the U.S. According to IDC, 28 million smartphones were shipped to India in the April-June period, registering a modest 3.7% growth over the previous quarter and just 1.6% year-on-year.

The IDC report said the quarter ended September was expected to mark the highest growth for the Indian smartphone market this year as retailers have cleared old stock, online sales picked up and venders launched new models in the run-up to Diwali, a major Indian festival which falls on Oct. 19.

Having already concluded a major promotional event Sept. 20-24, online giants in India -- homegrown Flipkart and the U.S.-based Amazon -- are currently offering another round of discounts across product categories, including smartphones.

Oppo's F3 Plus (Gold, 64 GB) phone was available at a 19% discount on Flipkart at 24,990 rupees on Thursday, while Apple's iPhone 8 (Gold, 64GB) was selling on Amazon at 59,999 rupees, compared with the original price of 64,000 rupees.

Despite a tense border standoff between China and India that ran for over two months till late August, Indian consumers continued to buy Chinese products, especially smartphones.

"All over the world there could be political reasons for people not to like each other but when it comes to consumer products, consumers go by what they think is right for them," Technopak's Singhal said.

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