Xiaomi has been making efforts to expand its base in the Indian market, currently dominated by the likes of Samsung and Micromax. The company, now, aims to be the top smartphone vendor in India in next three years. In an interview with WSJ, Xiaomi s CEO Lei Jun disclosed that the company has set sights on the emerging markets and wants to leverage the growing number of online customers in big countries such as India. Also Read - Redmi Note 11 series to cost cheaper than Redmi Note 10 Pro Max?Also Read - Are Chinese brands making the Indian government jittery?
“We need to prove that our business model can be copied overseas successfully, at least in one market. We ll need to try our best to be successful in a few emerging markets in a big way. We give ourselves three years to be the top three or even No.1 smartphone brand in India,” he said.
“Our business model isn t about how many phones we sell. We can t monetize unless we become a highly influential player in a country or a region. For example, we re doing business in Taiwan and Hong Kong, but their population sizes are too small and it s very hard to operate online businesses. The core of an online operation is population size. Therefore we want to sell to 10% to 20% of the population in India and other big countries. Then we ll have the influence of a huge media organization and the opportunity to monetize in various ways, he added.
Jun also pointed out that Xiaomi has continued to face an increasing competition from the rivals and has been under pressure. The challenges we face are the expectations to hit those numbers. Our competitors are getting stronger too. We were the innovator, the challenger and the disruptor, and people didn t take us seriously. All of a sudden we became No.1 in the market, then everybody turned their fire on us. We were under quite a bit of PR and competition pressure in the past year or so, he said
Xiaomi’s focus on the Indian market isn t very surprising considering the huge market size and especially growing popularity of the budget Android smartphone. With Samsung s dominance gradually declining, time seems to be ripe for the companies such as Xiaomi to tap the Indian market.
However, Xiaomi isn t alone in this race. Of late, a slew of international including Chinese brands have flooded the market and have adopted a strategy similar to Xiaomi’s — competitive price plus high speed devices. Interestingly, new players are also adopting the online-exclusive model. Perhaps, this is why Xiaomi is expanding its tie up with offline partners such as Bharti Airtel and The Mobile Store. It recently announced tie up with Redington to further target the brick-and-mortar sales. In the online segment as well, it has broken away with its Flipkart-exclusive partnership and made its products available on rivals Amazon and Snapdeal as well as its own mi.com/in website. It even partnered with Overcart and Amazon for selling refurbished smartphones.
Evidently, Xiaomi is making all out efforts to dominate the Indian market. However, three years in this ever-changing industry seems to be a very long time. With hardware race expected to hit a saturation point, Xiaomi will have to further innovate and improve existing propositions to woo customers.
As of today, the Indian market is dominated by Samsung and Micromax. According to the International Data Corporation (IDC) Asia/Pacific Quarterly Mobile Phone Tracker, Samsung led the market in the second quarter of 2015. However, IDC notes eTailers have played a big role in growth of the new Chinese brands.
According to Kiran Kumar, Research Manager with IDC’s India Mobile Phone team, “eTailers have opened additional avenues for growth for many vendors in India, who would have otherwise struggled to get a hold in the complex distribution network.” Although India remains a retail dominated market, vendors such as Lenovo and Xiaomi have used e-tailing channels in India to rapidly expand their presence. “The share of smartphone shipments through eTailers increased for most of the key vendors in Q2,” added Kumar.