NEW DELHI :
India’s largest smartphone seller, Xiaomi, which has dominated the budget handset category for more than two years, is now planning a premium makeover and will adopt a two sub-brand strategy for market segmentation.
The company, which has a negligible presence in the premium smartphone segment in India where OnePlus and Apple have tasted success, plans to focus on this category in 2020 and get more flagships under the Mi brand.
“The year 2017 onwards has been a great ride for us…we have been the number one smartphone brand in the country. A large part of the success has been driven by the Redmi portfolio, which operates between ₹6,000 and ₹20,000,” Raghu Reddy, head of online sales, India, Xiaomi, said in an interview.
“However, if you look at our presence in China we have divided the portfolio into Mi and Redmi. There are two separate line-ups. We will try to emulate that brand philosophy in India,” Reddy said.
The company’s attempt to crack the premium segment also comes at a time when its market share has seen a dip.
Xiaomi’s market share in India’s overall smartphone market was 27% in July-September 2018 and has dipped to 26% in the same quarter of 2019, according to data from Counterpoint Research.
This dip has also come at a time when rival brands are witnessing record growth. Smartphone companies under China’s BBK Electronics such as Vivo, OnePlus, and Realme have grown market share.
Realme was the fastest growing brand in the July-September quarter in 2019 when it grabbed a 16% share of the market compared to just 3% a year ago.
OnePlus is the number one premium smartphone brand and its shipments doubled year-on-year in July-September 2019 driven by its newly launched device OnePlus 7T and discounts on its OnePlus 7 series.
Apple and OnePlus enjoy intense brand loyalty and customer stickiness is higher than the budget devices segment.
Xiaomi, which entered India in 2014, wants to make up for the lost time and will renew focus on India’s growing premium handset segment.
“We should have had the premium play earlier. At that time with the limited resources that we had we decided to take a call on what we wanted to focus on and we focussed on the budget segment,” Reddy said.
In July 2019, Xiaomi launched Redmi K20 Pro at ₹30,999, its most expensive phone so far. “We believe the market continues to expand for premium devices and we are also in a place where we could look to leverage some of the assets that we have built over the last 2-3 years,” Reddy said.
Over the last two years, Xiaomi has stepped up offline presence though Mi Stores, Mi Homes, and Mi Preferred Partners, across the country and strengthened its distribution network. As of today, it has 75 Mi Homes, its premium retail network across top 10 cities. It has 2,000 service centres and has seven manufacturing facilities.
“All of these give us the confidence to get into the next phase of growth in the premium flagship segment….Premium push will be played out in geographies where there is purchasing power. We will leverage the top 10 cities but will not limit ourselves to that,” Reddy said.
Source: Livemint
