Why Xiaomi has big plans in India's smartphone market

Chinese smartphone maker Xiaomi, known for its light-on-the-pocket but heavy-on-specs phones has made quite a name for itself in the country. Of late, the company has enjoyed unrivalled success in the Indian market, with International Data Corporation's latest report stating that Xiaomi along with Samsung has become the joint leader of the smartphone market by capturing 23.5 percent market share in the past quarter.

The report further adds that the stupendous growth of Xiaomi – which entered the Indian market only in July 2014 – has been built on the success of blockbuster devices like the Redmi Note 4, which has remained the best-selling smartphone in the country as the company shipped roughly four million units of the device in this quarter.

The Note 4's success has also seen Xiaomi get very close to tripling its shipments year-on-year and doubling quarter-on-quarter in last quarter. 

However, as has been seen before, success in the smartphone market can be shortlived. Faced with increased competition from brands like Nokia, Samsung and OnePlus, the smartphone maker has realigned its focus to keep hold of the cash cow that the Indian smartphone market is. 

Here are ways in which the company is looking to consolidate its position in the fastest growing smartphone market in the world: 

India first approach

The smartphone maker is eyeing revenues in excess of $2 billion — more than Rs 12,800 crore — from its India operations in 2017 and to achieve the lofty goal, the company has decided to make India the centre of all things Xiaomi.

After becoming a sensation in its home country, China, Xiaomi is looking to replicate the model in India, which — if the company's founder and CEO Lei Jun is to be believed — is the smartphone maker's top priority, even more than the Chinese market. 

Speaking to Livemint, Jun said: "We have adopted the India No. 1 strategy, which includes design, research, and development, manufacturing and supply... Most of these products that we are talking about are initially designed for the Chinese environment. So, in the past two years, we have implemented India number one priority strategy at our headquarters. From R&D, design, we have considered a lot of Indian consumer needs."

Made in India and made for India

Even though Xiaomi was pretty late to step foot in the Indian market, it didn't take the company much time to expand its foothold in the country. The company, in the last three years, has taken numerous steps to improve its connect with Indian consumers and a major part of this strategy has seen it not just join hands with the make in India project but also come out with products that are made for India. 

The company, till date, only sells a limited number of products in India as opposed to its home market where it has a larger portfolio, but now plans to drastically improve that number by focusing on research and development (R&D) and manufacturing for India's market — to bring around 200 products in the country which are not just smartphones.

A case in point: Xiaomi's latest announcement of setting up a third manufacturing plant in India and the first facility for power banks in partnership with Hipad Technology in Noida, Uttar Pradesh.

Speaking about the development, Jun added: "In China, we have some 200 products. In India, we have some 20 products, which is very few... We believe it will take us 3-4 years to reach the levels of 200 products, which we could bring in."

Replicating the Mi ecosystem 

Xiaomi is focusing on replicating its China success story by creating a similar Mi ecosystem of products and apps in India.  

The company is planning on investing a sizeable $1bn in 100 start-ups in India over the next five years with an aim of boosting the ecosystem of apps and services for its smartphones in the country. 

Move from online to offline stores

After winning over the market with flash sales and partnerships with e-commerce players such as Flipkart and Amazon, Xiaomi is looking at expanding its offline presence in the country. As per a report published in The Economic Times, the company is expecting more than 30 per cent of its sales in the country to come via offline stores by early next year, and has joined hands with Reliance Digital to sell smartphones in India.

It is also working towards increasing the number of Mi Home stores across the country in the coming days. 

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