Xiaomi is planning to introduce online video streaming to increase its revenue in the digital services industry. After dominating the market with reasonably-priced smartphones and televisions, Xiaomi plans to be a competitor to Netflix and Amazon in the Indian market.
Xiaomi India Managing Director Manu Kumar Jain said that the new online streaming service aims to increase film and music content in India. The company is also willing to invest close to Rs 3,500 crore on the project.
Jain did not specify how much Xiaomi stands to gain financially from the streaming service.
Xiaomis dominance
Xiaomi, a Chinese company, has become a force to be reckoned with in the electronics industry. The company makes smartphones, apps, laptops, and other consumer goods like electric toothbrushes, headphones, power banks, and speakers.
In the second quarter of 2018, the International Data Corporation (IDC) said that Xiaomi leads the Indian smartphone market with a 29.9% consumer share. Samsung held 23.9%.
According to the IDC, Xiaomi also grew twice its size and had more than 56% of the online shipments for smartphones.
The electronics company also dominated in the fourth quarter with a market share of 27%. Analysts said that Indians make up a massive market share.
India is the second largest smartphone market in the world after China. It has just surpassed 430 million smartphone users. However, this accounts for just 45 percent of the potential total addressable market for smartphones, said Research Analyst Karn Chauhan.
One of the major reasons for Xiaomis popularity is that Indians are increasingly gravitating towards mid-tier, reasonably-priced smartphones.
That same year, Vivo and Oppotwo more Chinese companiesheld the third and fourth position in the market with 12.6% and 7.6% respectively.
Netflix, Amazon, and streaming services galore
After international giants like Netflix, Amazon, Spotify, and iTunes entered the market, Indians were flooded with a range of new-age content in film and music. Even Indian ventures like Hotstar and Jio Saavn have managed to make a mark.
Now, Xiaomi attempts to join those companies and roll out its own streaming service. It also wants to strengthen its hold over the digital market overall and is looking to introduce digital payment apps like Paytm and Google Pay.
It has already launched a Unified Payments Interface (UPI)-based app called Mi Pay and wants to launch Mi Credit, a loan-granting platform.
Jain said, Xiaomi globally made less than 1% profit margin from hardware or device sales in 2018, and we have stated that will never make more than 5% profit margin on hardware. It is the internet services which will make money for us.
Xiaomi has already monetised its devices and retail in India. Digital services is the only non-monetised pillar for the company.
Its streaming service will include content from Mi Video and Mi Music. Jain added that Xiaomi is looking to collaborate with existing services and companies in India, as well.
The rise of online content, particularly video, has given Indian consumers unprecedented choice in content. The film and television industry itself has undergone a makeover and is focusing more on youth-focused, modern narratives.
Shows like Sacred Games, Delhi Crime, and Made in Heaven are a welcome change in the Indian content market. Online streaming services have begun to bypass the gatekeeping tactics of older, established corporations that are known to stick to traditional soaps because they bring in high revenue. Whether Netflix, Amazon or Xiaomi, the Indian consumer is the real winner here.
Also read: Here’s how Apple TV’s streaming service plans to take on Netflix.
Rhea Arora is a Staff Writer at Qrius