From shoes, luggage, soap dispensers and bulbs to security cameras, television sets, air purifiers, laptops and, of course, smartphones, Xiaomi has dipped its toes into many businesses over the past decade. The company is now bringing its portfolio of ecosystem products to the Indian market at a steady pace.
Manu Jain, VP, Xiaomi, and MD, Xiaomi India, says the company’s business comprises four layers: smartphones at the core, accessories like earphones and power banks in the second tier, followed by smart electronic products like TVs and water purifiers, and then lifestyle products like t-shirts and shoes.Having stood for affordability across its myriad offerings, the electronics company now wants to be known for its premium products. Can Xiaomi pull this off?
The company claims that, globally, over 5.1 million users own five or more Xiaomi devices connected to the company’s IoT platform — a y-o-y growth of 63.9% — and it earns about 28% of its revenue from IoT and lifestyle products.
“In India, Xiaomi’s strategy is to build a loyal user base that will buy multiple Xiaomi products and join its ecosystem,” says Jaipal Singh, associate research manager, IDC India. The smartphone user can be sold internet services, financial services, accessories, and devices that are connected to and controlled by the phones.
Jain announced earlier this year that the company sold 50 lakh smart TVs since its entry into the market in February 2018. Xiaomi has emerged as the market leader in the category with about 30% market share (as per IDC), with its entry-level 32-inch model being the volume driver.
Tarun Pathak, associate director, Counterpoint Technology Market Research, says Xiaomi’s competitive pricing and “bid to disrupt legacy categories could work in its favour”, if it chooses its products well.
Not all smart products from the Xiaomi China stable may have a market in India. Electric scooters, pressure cookers, hand-held vacuum cleaners and more, are yet to be introduced here. “It is possible that about 20% of the products won’t end up doing well. We make sure that the market for products we wish to introduce is large enough, with a significant potential for growth in the next two to three years,” says Jain.
Xiaomi uses its Mi Crowdfunding platform to assess the market for specific products prior to a formal launch. A robot vacuum cleaner was launched through this platform in April this year. Jain says customising products for the Indian market is crucial because of the unique conditions here. For instance, the smart water purifier was launched only in India.
Xiaomi opened its 3,000th exclusive Mi Store in India recently. The brand’s offline presence, Jain says, is key to unlocking IoT sales. Mi’s water and air purifiers are popular among online buyers, but he says the company needs to step up its offline presence as several other consumer durable brands sell their products through retail outlets.Premium tag
In the ongoing festive season sale, the brand is selling products across a wide price range — the newly launched Mi 10 smartphone costs around Rs 45,000 (discounted) while the cheapest phone on offer, the Redmi 9A, is priced at Rs 6,499; after discount, the 65-inch Mi TV costs Rs 54,999, while the basic 32-inch model is being sold at an offer price of 13,999. In wearables, it has introduced a smartwatch priced at Rs 15,999 (Rs 9,999 on sale), while the basic Mi Smart Band 3i costs Rs 1,299.
The company is seemingly aspiring to break out of the ‘affordable’ image it has built over the years. “Any brand would want to cast a wide net to capture a large chunk of the market with products across price tiers. However, the challenge for Xiaomi will be to aggressively separate its premium brand Mi from the budget range Redmi,” says Pathak.
Poco, a Xiaomi sub-brand which was positioned as a premium brand selling smartphones at an affordable price point, was turned into a self-operating entity in February 2020. Mi and Redmi are still housed under the Xiaomi umbrella. Redmi, which was primarily a smartphone brand, now lends its brand name to budget fitness trackers and earphones, too.
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