Beijing-based Xiaomi becomes India's top smartphone brand
Beijing-based Xiaomi, one of the world's most valuable startups, has become the top-selling smartphone brand in India. In the quarter ended December 2017, Xiaomi edged ahead of Samsung to take a 27% share of the No. 2 handset market globally. The Indian smartphone market grew 14% annually last year to reach 124 million units, according to research firm International Data Corporation (IDC).
By becoming the top smartphone vendor in India, Xiaomi has finally achieved global success. Previous efforts in Brazil did not come to fruition, while expansion to Southeast Asia has been a mixed bag. As it turns out, India is more important for Xiaomi. The subcontinent is not only the world's fastest-growing smartphone market: It may eventually be the largest too. With a population of 1.32 billion, India is set to overtake China as the most populous nation in the world in 2024, according to the United Nations.
Xiaomi's inexpensive smartphones are a good fit for the Indian market, where GDP per capita is just $1709, according to the World Bank. China has a per-capita GDP of more than $8123.
Kiranjeet Kaur, a Singapore-based IDC senior analyst, says that Xiaomi's India strategy has been sound, from pricing and product portfolio to distribution channels and variety of handset models. "Xiaomi plays in the low-end market in India," Kaur says. He points out that more than 80% of the smartphones shipped in India last year were in the sub-US$200 price segment. Xiaomi accounted for a quarter of those shipments.
While Xiaomi still relies largely on Indian e-commerce channels, it has made considerable progress expanding to offline channels, much of it driven by its Preferred Partners [tie-ups with multi-branded outlets] and branded Mi Stores. "Xiaomi doesn’t seem to be slowing down, and with its focus on budget segment smartphones, offline expansion, and continued strong partnership with e-Tailers, we expect its momentum to continue in the Indian market," Kaur says.
Shelly Jing, a smartphone analyst at IDC, says that going public would provide additional financing for Xiaomi to pursue additional international expansion. Rumored for later this year, an IPO "would be very helpful" for Xiaomi's efforts to break into the U.S. and Europe, she says, adding that the company must burnish its mid-range and premium smartphone models to compete in those mature markets.
In a recent interview with The South China Morning Post, Xiaomi chief executive Lei Jun declined to comment on when the company will go public. In January, Reuters reported that Xiaomi plans to list on the Hong Kong Stock Exchange in the second half of the year. The IPO could value the company at up to $100 billion, the report said.