Xiaomi becomes market leader in India

As smartphone maker Xiaomi prepares for its initial public offering in Hong Kong, the company has now surpassed Samsung in the Indian market to become the market leader for smartphones in the country.

View of a store of Xiaomi in Huaibei city, east China's Anhui province, 3 July 2018. [Photo: IC]

At this mobile phone store in Mumbai, Xiaomi smartphones have been flying off the shelves.

The Beijing headquartered brand has even overtaken Samsung to dominate the smartphone market in India.

Store owner Prashant Redekar says it's largely because of Xiaomi's value for money in a price conscious market.

"They are giving functions which other companies are not giving in low cost. They are giving 2GB RAM and 16GB memory in 7,000 rupees. Other companies are giving that function in 10,000 or 11,000 rupees."

Xiaomi smartphones surged to take a 31 per cent share of shipments in the country in the first three months of this year compared to just over 13 per cent in the same quarter last year, according to Hong Kong based Counterpoint Research.

The phone manufacturer is tapping a market where there are still large numbers who don't own a smartphone. But Chinese budget brands like Xiaomi, and Vivo and Oppo, mean more people can afford to buy these devices. India is now the second largest smartphone market after China.

And cut price data deals from India's telecom companies which are in fierce competition are also helping boost demand.

There's also tough competition in the phone sector, with Indian brands also making budget devices.

N Chandramouli the chief executive officer of research firm TRA in Mumbai, says Xiaomi will have to work hard to maintain the top position.

"There is no clear victor here. You've seen a Samsung like brand which is existing for so many years still suffer the consequences of a low or a high, every time it's a fight every day. I think unless they have a very clear cut brand strategy in India, there will be very few people who know which brand is Xiaomi's brand, meaning there's a Mi, there's a Redmi, there's a Xiaomi."

The company's Redmi and Mi smartphones are manufactured at six factories in India.

And Xiaomi says it wants to expand its presence in and set up production of goods ranging from TVs to t-shirts in India.

There are some who turn their noses up at budget brands, though.

"I usually tend to go for brands that have been there for a long time, so say to take names, would probably be a Samsung or an iPhone or something like that."

But with a population of 1.3 billion, Xiaomi is well aware of the huge opportunity to ring up sales in the country.