Xiaomi's Phenomenal Rise in India

But Staying on Top Will Be the Next Challenge

Xiaomi's transformation in India over the past three years has been remarkable. The Chinese phone-maker has introduced solid and affordable smartphones, which are particularly attractive when consumers, especially price-sensitive buyers, compare specifications and features.

We believe Xiaomi narrowly reached the top spot in the Indian smartphone market in the fourth quarter of 2017, surpassing Samsung. This is a point of great pride for Xiaomi and certainly not a matter of luck, but sheer hard work. The company approached the market in a practical way and most consumers wanting to get a deal have recognised this.

In general, Indian smartphone users look for smartphones with a specific set of features, particularly the following: dual-SIM capabilities, a decent camera, good support for texting, FM radio, and, of course, good voice quality. Some specifications such as fingerprint scanners that are becoming widely available in smartphones in developed markets are considered unnecessary at this point by most smartphone buyers in India.

We estimate that an average smartphone customer in the country has a monthly salary of about 15,000 rupees (about $235). Most people become entirely reliant on their phones, using them for business and pleasure. In many cases, this leads customers to upgrade their devices every year, and they're less loyal to a brand than users in other markets. We've seen examples of people switching between using devices from Apple to Samsung, then to Micromax and Xiaomi over a period of a few years.

One anecdotal account we refer to during our travels to India over the past four years, is of a person who switched between brands in just this manner. According to him, Xiaomi has become the preferred brand among his colleagues because the features that the phones offer match their needs. He also notes that a growing number of smartphone users have shifted from other international and local brands.

Value has been the driving force for this trend. Recently, for example, the Xiaomi Redmi 5A launched for an effective price of 4,000 rupees (about $63) after a rebate. This is a dual-SIM, five-inch phone with a 13-megapixel camera on the rear and FM radio. That was a promotional price, but it shows what consumers in India are looking for.

For Xiaomi, if reaching the top was a challenge, staying there could be an even greater one. If history is any guide of Samsung's competitive focus, we would expect that Samsung is readying new phones that are specifically priced to take on Xiaomi.

This entry was posted on January 31st, 2018 and is filed under Devices. You can follow any responses to this entry through the RSS 2.0 feed or you can leave a response.

Posted By Raghu Gopal On January 31st, 2018

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