By Anusha Bhagat
Xiaomi Inc. is a privately owned Chinese electronics and software company headquartered in Beijing. In 2015, MIT Technology Review ranked Xiaomi second on their list of 50 Smartest Companiesa list that also featured companies like Apple, Google and Microsoft who were rated far below the Chinese smartphone and smart home products maker. This was exactly a year after Xiaomi had landed in Indiathe company’s biggest market outside China.
In almost three years, the company has been a huge success in India. Xiaomi has managed to catch up to Samsung and level out the playing field. The two companies hold 23.5 percent of the smartphone market share in India. In a letter to all Xiaomi employees in July 2017, CEO Lei Jun shared that the company aims to ship 100 million smartphones globally in 2018, and the Indian market makes a huge chunk of that proportion.
Xiaomi in India
Globally, Xiaomi invests anything from $100,000 to millions of dollars on funding innovative firms. In China, the company has investments in software, content and hardware companies. The Chinese technology company had made its first investment in India, leading a $25-million (Rs 170 crore) funding round into Hungama Digital Media Entertainment in April 2016. Hungama is an aggregator and publisher of entertainment content on the internet.
In India, the company is looking at investing in startups working in the software and content space. In a recent interaction with Economic Times, Hugo Barra, Vice President at Xiaomi Global, had said that the companys investment in India would be mostly around mobile services and mobile apps because hardware ecosystem is in its early stages.
$1 billion in 100 Indian tech startups
In a bid to create an ecosystem for its mobile applications, Xiaomi is looking to invest USD 1 billion in 100 Indian tech startups over a period of five years, according to a report by the Mint. CEO Lei Jun has told the newspaper that Xiaomi and its sister firm Shunwei Capital will be investing in startups that produce content, financial technology and hyperlocal services to help increase adoption of mobile internet in India. It has already begun by buying stakes in six major internet companies, including Hungama and KrazyBee.
Lei told the newspaper, “In China, in the past four years weve invested $4 billion in over 300 companies. In the next five years, we will invest in 100 companies in India. We will basically replicate the most successful ecosystem business model of China in India.” He also said that Xiaomi will introduce more products in India over the next two quarters. The company is already selling its phones in around 60 countries and had last raised equity capital at a valuation of USD 40 billion in 2014.
Soon to be the biggest investor in the Indian internet market?
Mint reports that the Chinese smartphone maker is also hoping to make its lower-end phones more lucrative by providing and integrating entertainment content to continue to stay ahead of rivals such as Samsung, Micromax, Vivo, Oppo and others. Xiaomis funding will be focussed on companies that can provide smartphone apps to keep people glued to their phones, such as entertainment content. Should everything go as planned, Xiaomi would become one of the biggest investors in the Indian internet market. However, it said that it will only be involved in minority stakes, rather than outright takeovers.
Xiaomi, one of the worlds most valuable privately held tech companies, is the most prominent Chinese investors in India after the two internet giants, Alibaba Group Holding Ltd and Tencent Holdings Ltd. If the company meets its investment target, it would become one of the most prolific internet investors in India.
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