How China's Xiaomi took India's smartphone market by storm

When Xiaomi first launched in India in 2014, its goal was to sell at least 10,000 smartphones in the country....

Posted: May 1, 2018 12:33 PM
Updated: May 1, 2018 12:33 PM

When Xiaomi first launched in India in 2014, its goal was to sell at least 10,000 smartphones in the country. In the first three months of 2018, the Chinese tech firm sold more than 9 million.

Xiaomi now accounts for over 30% of India's smartphone sales, according to industry estimates. At the end of last year, it broke Samsung's six-year dominance of the country's fast-growing market.

"You will laugh at me if I tell you the initial plan," Manu Jain, managing director of Xiaomi India, told CNNMoney in an interview. "Not even in our wildest dreams did we think we would be able to achieve so much in so little time."

They did it, Jain said, by going local.

"To build a long term sustainable business in India, we have to act like a local Indian company," he added. That meant making devices tailored to the needs of Indian consumers, and building them in the country itself.

Spurred on by Prime Minister Narendra Modi's "Make in India" initiative, the company opened its first Indian factory in 2015 and started production within a matter of months.

"We've had maximum support from both state and central governments whenever we needed it," Jain said.

Related: India poised for smartphone revolution

Xiaomi's upsurge in India has helped offset a decline on its home turf. Once a clear leader, the company is currently placed fourth in China's slowing smartphone market, behind local rivals Huawei, Oppo and Vivo.

More than 95% of Xiaomi smartphones sold in India today are made in India, allowing the company to avoid the tariffs on imported smartphones that have hobbled rivals such as Apple. Apple finally gave in last year, announcing it would start making some iPhone models at a plant in Bangalore.

Apple has one plant, Xiaomi has six

Xiaomi, meanwhile, recently tripled its Indian manufacturing base by opening three new factories in the country in partnership with Taiwanese electronics firm Foxconn. That makes a total of six facilities that Jain says can produce two smartphones every second.

The company will also start making circuit boards for its devices in India and is trying to convince more of its component suppliers to set up shop there.

"If India has to become a truly global supplier hub -- which is something that is really required -- we are happy that we are able to play a small role in this," Jain said.

Related: Xiaomi tightens grip on India's smartphone market

While the government push to encourage local manufacturing has been "incredible," Jain said it wasn't the main reason Xiaomi opened factories in India.

"It's closer to the consumer, closer to the market, more expensive to import from China," he said. "We are just trying to go two steps ahead of the current regulations."

Making smartphones in India has also allowed Xiaomi to slash its prices, giving it a huge competitive advantage over importers in a country where demand is exploding but the average annual income is still less than $2,000.

"Apart from being some of the best value devices on the market, Xiaomi's smartphones are now available in more places and in larger quantities," Ishan Dutt, an analyst at mobile research firm Canalys, wrote in a recent note. "Xiaomi is becoming a force to be reckoned with in India," he added.

'You don't need to pay a lot of money'

It's all down to what Jain refers to as "honest pricing."

"What Xiaomi made people understand was that for you to have a quality product, you don't need to pay a lot of money," he said. "We broke that myth."

Xiaomi is now looking to expand its range of products and become India's leading electronics brand. The company already sells a range of other items including smart TVs, power banks, air purifiers and wearable devices.

But smartphones are at the heart of the Chinese company's India strategy, and its most compelling opportunity.

"Unlike the West and in China where people were offline, then online using desktops, then laptops, then mobile ... people skip all these stages and go directly from not being online to being online via a smartphone," Jain said.

"The thing that keeps me excited is that we can truly transform Indian society."

Minnesota Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 90942

Reported Deaths: 2021
CountyConfirmedDeaths
Hennepin26054922
Ramsey10572318
Dakota7216125
Anoka5801132
Stearns381223
Washington361055
Scott245833
Olmsted231927
Nobles193616
Blue Earth16116
Wright15407
St. Louis140034
Carver13607
Rice13088
Mower12935
Clay128140
Sherburne110414
Kandiyohi9332
Winona85218
Lyon6524
Waseca5338
Freeborn5223
Steele5222
Benton5153
Watonwan5064
Nicollet50416
Todd4792
Chisago4581
McLeod4522
Le Sueur4454
Crow Wing43918
Otter Tail4004
Beltrami3795
Goodhue3329
Martin3299
Pine2840
Itasca28213
Polk2754
Isanti2650
Douglas2622
Becker2482
Carlton2451
Cottonwood2190
Pipestone2159
Unassigned21252
Morrison2081
Dodge2020
Chippewa1971
Sibley1843
Meeker1832
Brown1802
Wabasha1800
Yellow Medicine1622
Murray1572
Rock1550
Mille Lacs1503
Redwood1420
Renville1367
Jackson1341
Faribault1320
Cass1313
Swift1231
Roseau1170
Houston1140
Pennington1121
Fillmore1110
Koochiching1113
Kanabec1098
Lincoln1020
Stevens931
Pope890
Hubbard830
Aitkin731
Big Stone700
Wadena670
Grant594
Lake570
Wilkin563
Norman520
Marshall501
Lac qui Parle470
Mahnomen461
Red Lake390
Traverse300
Clearwater260
Lake of the Woods211
Kittson120
Cook60

Iowa Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 80698

Reported Deaths: 1275
CountyConfirmedDeaths
Polk15366259
Woodbury504263
Johnson501127
Black Hawk437586
Linn3808108
Story331517
Dubuque282341
Scott281827
Dallas269838
Pottawattamie200238
Buena Vista195112
Marshall176234
Sioux13723
Wapello127157
Webster120214
Clinton107419
Muscatine106854
Plymouth105820
Crawford10145
Cerro Gordo100221
Warren9326
Jasper77232
Des Moines7407
Marion7265
Tama69431
Carroll6375
Henry6204
Lee5997
Wright5631
Dickinson4876
Boone4788
Bremer4687
Washington43211
Louisa42515
Mahaska34619
Delaware3423
Franklin34218
Hamilton3153
Jackson3043
Floyd3023
Winneshiek2995
Clay2963
Benton2871
Hardin2841
Winnebago27511
Butler2622
Lyon2603
Clarke2563
Emmet25210
Poweshiek2528
Buchanan2511
Allamakee2486
Jones2483
Shelby2441
Clayton2343
Guthrie2315
Kossuth2310
Cedar2231
Chickasaw2220
Sac2200
Grundy2062
Madison2062
Cherokee2042
Fayette2002
Iowa1921
Mitchell1830
Howard1826
Harrison1812
Humboldt1763
Hancock1742
Calhoun1722
Mills1691
Palo Alto1630
Pocahontas1542
Lucas1526
Monroe15010
Page1420
Monona1401
Cass1362
Jefferson1341
Osceola1300
Appanoose1253
Taylor1241
Union1223
Davis1164
Van Buren1111
Ida1030
Worth1030
Keokuk911
Fremont900
Greene890
Montgomery885
Wayne842
Audubon681
Adair671
Decatur600
Ringgold442
Adams290
Unassigned70
Rochester
Clear
63° wxIcon
Hi: 81° Lo: 55°
Feels Like: 63°
Mason City
Clear
62° wxIcon
Hi: 81° Lo: 53°
Feels Like: 62°
Albert Lea
Clear
66° wxIcon
Hi: 81° Lo: 55°
Feels Like: 66°
Austin
Clear
66° wxIcon
Hi: 81° Lo: 54°
Feels Like: 66°
Charles City
Clear
64° wxIcon
Hi: 81° Lo: 52°
Feels Like: 64°
Tracking more warmth before cooler weather arrives for the weekend
KIMT Radar
KIMT Eye in the sky

Latest Video

Image

Sara's Evening Forecast - Tuesday

Image

Antibody Testing for blood donors

Image

Rochester going electric with public transport

Image

National Voter Registration Day

Image

Medical Reserve Corp Needs Volunteers

Image

10 Pounds OF Meth Seized

Image

Mural Project Creates Employment and Art

Image

Pandemic Disproportionately Affects Minority Communities

Image

WIC Program Participants Increasing

Image

United Way of Olmsted County seeks partners in providing distance learning help

Community Events