Chinese smartphone maker Xiaomi has already closed the gap and even overtaken Samsung as the top seller of mobile phones in the Indian market. But it may now face a serious threat from another Chinese phone major Oppo.

Xiaomi has 2 brands, the Mi and the Redmi and collectively they sell more than any other brand. What has now emerged is that Oppo will also use this expanded manufacturing capacity to launch an all new sub-brand as the second one to Oppo and the company is also planning to release a phone in the mid-segment.

There may be a few models in the sub-brand and the mid-segment, which in the Indian context is in the Rs 10,000 to Rs 15,000 price range sounds attractive to Oppo. With the right set of components and appealing exterior design, this segment offers both volumes and margins both.

Oppo has set up a separate management team to handle the launch and the ongoing operations for the sub-brand. If all goes according to plan, one may see the new brand being released by May 2018.

It has also set up a second manufacturing unit in India and part of this facility is dedicated to assembling printed circuit boards (PCBs). Part of this facility will also be used for the new sub-brand.

Oppo claims it conducted a survey and based on the feedback from real customers only they have firmed up their new strategy. Oppo is aware of similar attempts by some of the other brands, like homegrown Micromax which made similar attempts at launching a sub-brand but did not succeed.

When it comes to the market shares, Xiaomi has been successful in cornering a lion’s share of the online market in India for mobile phones, mostly the smartphone variety. Of the smartphones sold online in India, 57% are Chinese brands, Xiaomi dominating with 31%. Oppo has to penetrate this fortress of Xiaomi using its new offerings.

While Oppo relies more on the pull-strategy through huge ad spends, Xiaomi tries the push-strategy by cutting down on its own margins and offering better deals to the trade.