Xiaomi transforms into lifestyle player as brand affinity grows in India

One of the country’s best-known smartphone brands is undertaking a journey aimed at helping it transform into a lifestyle player. The first few steps have been taken, with the Chinese major in the last few weeks quietly launching a slew of non-smartphone products. This includes ‘Mi’ branded luggage, backpacks, apparels, U-shaped pillows, pens, home security cameras and air purifiers. It comes in addition to wearable devices (such as ‘Mi’ bands), electronic accessories (such as routers, chargers, power banks, earphones and cables) and television sets that already has in the country.

The plan, says a company spokesperson, is to tap the broader smart products space as eyes growth beyond smartphones in India. “We are evaluating appropriate categories which make sense for the Indian market. India is ready for smart home and lifestyle products with smart TVs leading the interest,” the spokesperson said.

Xiaomi took the plunge into smart TVs in March with all three variants of its ‘Mi’ branded LED TVs available both online and offline. The next phase of growth would see its TVs get into offline multi-brand outlets as it competes head-on with established names such as Samsung, LG and Sony.

In an interview in June to Business Standard, Manu Kumar Jain, global vice president and India MD at Xiaomi, said the company was actively working on ramping up its TV business in the country. By end-September, Xiaomi had already sold half a million TVs in India, with the company pushing the pedal further in the space.

The firm, which made its stock market debut at the Hong Kong bourse in July, has recently begun manufacturing TVs in India. And according to Jain, Xiaomi is looking to manufacture its products locally in other categories too. The firm, for instance, already makes handset components such as printed circuit board assemblies (PCBAs) locally and is doing the same in the case of power banks, Jain said.

India remains Xiaomi’s largest market outside of China, where $1 billion of the nearly $5 billion raised in the initial public offering has been set aside for expansion.

The company already commands nearly 30 per cent market share in smartphones, ahead of Samsung in the April-June period, according to International Data Corporation, and proposes to expand its lead in the category, led by product innovation and a strong distribution push both online and offline. The latter (offline push) will be critical to its second phase of growth in the country, sector experts said, as it diversifies its operations.

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Xiaomi had entered India in 2014 through an online-only business model, though in the last one year it has made the brand available in brick-and-mortar retail chains, exclusive stores (called Mi Homes) and dealers (called Mi Preferred Partners). The company plans to have 100 Mi Home stores by the end of 2018 from 50 outlets now. It has also launched two company-owned-and-operated stores or “experience centres” in Bengaluru and Navi Mumbai (Vashi), which will see it showcase all its products under one roof. More such “experience centres” are on the cards as Xiaomi expands its horizons here.

The Chinese major also proposes to increase its content and software tie-ups in the country as it seeks to improve stickiness and provide more features for less (in terms of pricing) within smartphones. In June, the company entered the digital lending space in India, with the launch of a ‘Mi Credit’ product, to boost phone sales. The initiative helps consumers get personal loans via offers that appear on their lock screens when using their phones. The company is also investing in domestic start-ups as India remains critical from a growth point of view, Jain said. Insights gathered here are taken to other markets, he said, including those in Asia and Latin America, places where Xiaomi has revived its expansion plans.

Since 2017, the company has re-ignited sales in markets such as Indonesia, Vietnam, Russia, Spain, the United Arab Emirates and Ukraine. The company is also eyeing an entry into the US market in 2019 as it looks to strengthen its presence worldwide.


Thinking Big

  • Xiaomi is making the transition into a lifestyle company as brand affinity grows in India
  • It is the largest smartphone player in the country for the last four quarters
  • New categories it has stepped into include apparels, luggage, pens, pillows, backpacks and air purifiers
  • This is in addition to wearables, TVs and electronic accessories where it is already present
  • Plan is to introduce more diverse products into India, pushing them online and offline

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