By Anuja Mardikar
Xiaomi is a Chinese word and stands for millet, a foodgrain grown in many parts of the world. True to its meaning, the Chinese electronics and software company Xiaomi is expanding in many parts of the world. The company launched its first smartphone in August 2011, and it instantly gained market share in China to become the country’s largest smartphone company in 2014. Xiaomi currently has 15,000 employees in China, India, Malaysia, Singapore and is also expanding to other countries such as Indonesia, the Philippines and South Africa. Xiaomi is the world’s 4th most valuable technology start-up after it received US$1.1 billion funding from investors, raising its valuation to more than US$46 billion. Apart from smartphones, the company is also venturing into other consumer electronics like the smart home device eco-system.
History in India
With its first international headquarters in Singapore, Xiaomi announced its expansion beyond the home country of China. Following Singapore, the company started operations in Malaysia, Philippines and India. The company entered the Indian market with Mi 3 in partnership with Flipkart, Indias leading online retailer. It used the concept of flash sale to market its value-for-money smartphones. A flash sale is a discount or promotion offered by an e-commerce platform for a short duration of time. Interested customers had to register for the sale, and Xiaomi only made available a limited stock of devices that were sold out in a few seconds. In India, Chinese brands have always been perceived as cheap and low quality, but Xiaomi changed that perception. It is affordable but not low quality. In fact, the quality is much higher in comparison to the local brands. With its good quality and mid-range pricing, Mi phones became an instant hit and the perfect device to upgrade for the low-end phone users.
Xiaomi continued and launched many more successful mobiles like the Xiaomi Mi4 for Rs. 19,999 in 2015. Xiaomi was highly affordable and was very well received in the market. It competed with the Samsung Galaxy S5 that was launched at a high price of Rs 50,500 in 2015. Xiaomi understood the sensibilities of the Indian market and continued to launch smartphones in the mid-price range. Budget offerings helped the brand to expand the footprint and establish an image of value-for-money products.
Strategies for success
Manu Kumar Jain, who was initially the head of operations for Xiaomi in India, is today the India Managing Director and Global Vice President. According to him, the most important factor for the success of Xiaomi in India is the offering of great products at a fantastic price. The company does a lot of innovation on both the software and the hardware sides. In India, the company has invested in three different factories and opened 750 service centres. Also, the company does not focus on any one particular feature of a phone. The top selling smartphones like Redmi Note 4, Redmi 4, and Redmi 4A had top-notch specifications in terms of RAM, camera, storage, battery and processor in their respective price ranges. By adopting such strategies and understanding the market requirements Xiaomi scaled up the ladder of success under Jains guidance. As per the latest data shared by counterpoint research, Xiaomi has 25 percent market share followed by Samsung with 23 percent. Lenovo, Oppo, and Vivo have lost share in the market in Q4 2017.
Other than smartphones, the company has forayed into the Smart TVs now. Competitors Samsung and Sony should be concerned as Xiaomi is offering much more in the TV space. It promises the same level of quality in software, hardware, design and picture quality as Sony and Samsung, but at a much lower price. The quality vs affordability dilemma is more blurred than ever before, thanks to Xiaomis aggressive approach to the market. For a brand that has built its reputation on affordability, it was initially surprising to see Xiaomi bring its flagship TV. Not only did Xiaomi venture into the TV segment but went a step further by pricing its most premium TV at the same price that Sony or Samsung would charge for entry-level options.
Plans in the pipeline
Although Xiaomi is the number one smartphone seller in India currently, according to the company, it hasnt achieved its full potential yet. They are aiming to launch a lot of products other than smartphones. There are still 400 to 500 million people who use feature phone users in India, and the company aims to bring them online through smartphones. Xiaomi started in India with smartphones and today offer models in around eight to ten categories. In smartphones, fitness band, and power banks, the company today holds the top position in India. Now the company wants to venture further in India. It has decided to display 15-20 categories in our flagship stores. These shall not be for sale, but for experiencing and giving feedback, for customisation in India. This will help Xiaomi enhance its future offerings in the country. In India, the company wishes to stabilise in the TV business as they also plan to bring their television in the offline stores and aim to grow existing businesses. Eventually, it shall enter more into more product categories.
Innovation, correct pricing and understanding of the marketplace are the long and short of the Xiaomi success story in India.