By Anuja Mardikar
Chinese electronics giant, Xiaomi, popular for its Mi range of smartphones has approached Indian Electronics and IT Minister Ravi Shankar Prasad about their plans to bring more products into India, according to media outlets. A senior in the IT Ministry said Xiaomi’s India head Manu Jain met with Prasad last week to garner Indian government’s support for the same.
Xiaomi’s Indian journey
Xiamoi entered the Indian market in collaboration with Flipkart- India’s leading online retailer in 2014 and popularised its products with affordable pricing and flash sales. Jain had recently tweeted that according to the analysis by various market analysis agencies such as Counterpoint and IDC, according to sales in the last quarter of 2017, Xiaomi now occupies over 26% of the Indian smartphone market.
Xiaomi continues to remain No. 1!
After Canalys and Counterpoint, @IDC has also confirmed that @XiaomiIndia is the undisputed #1SmartphoneBrand in India.
With a Q4 2017 market share of 26.8%, we're #1 for two consecutive quarters!
Thank you for the love. Dreams do come true. pic.twitter.com/KOddBE9uqr
— Manu Kumar Jain (@manukumarjain) February 13, 2018
Xiaomi was termed the world’s most valuable startup in 2014, after raising a series of funding that valued it at over $45 billion. According to media reports in December last year, Xiaomi has been talking to investment banks about the possibility of a public offering, while seeking a valuation of over $ 50 billion.
Founder Lei Jun said at the World Internet Conference in Wuzhen shortly afterwards that the company is definitely seeking to “transplant” its business into other countries. “In India, we’ve created a miracle. After only three years, we’ve become number one,” he said.
According to sources, over 50 ancillaries of Xiaomi are expected to come to India. Jain also tweeted about Xiaomi’s production techniques being in line with the Make in India initiative of the Government and its emphasis on local manufacturing.
The Government of India has raised customs duty on mobile phones from 15% to 20% to encourage the manufacturing of smartphones in India and therefore companies like Foxcann, Samsung and now Xiaomi are setting printed circuit boars (PCBs) in India.
Threats to expansion?
Following the Doklam stand-off last year, there has been a consistent strain in political relations between the two nations. In fact, Chinese media outlets warned Chinese companies last year to be “alert” and avoid being “hit by anti-China sentiment” following the Sikkim standoff.
Local newspaper, Global Times warned companies about potential “violent attacks against Chinese personnel and companies,” and advised them to look after their employees.
Strained political relations between the two governments along with India’s $37 billion trade deficit with China, could be a sign for Chinese companies to tread lightly when it comes to expanding Indian investments.
Xiaomi’s strategy
In accordance with what Lei said, Xiaomi did turn a “miracle” in India. Sales for the company surged a whopping 696% in 2017, transforming their net loss of Rs 46 crore in 2016 to a profit of Rs 164 crore in 2017. The company currently also sells air purifiers, fitness bands, virtual reality headsets and televisions in India.
The company has gained massive popularity in the Indian market in a very short span of time. Given the pace of its growth, it seems like the right time for the company to expand into other ventures in the Indian electronic market along with governmental support.
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