Xiaomi eyes big In­dian prospects

Smart­phone ven­dor sets sights on move to snap up big­gest slice of na­tion’s lu­cra­tive and huge mar­ket

China Daily (Canada) - - VIEW - By MASI masi@chi­nadaily.com.cn

Xiaomi Corp aims to be­come the largest smart­phone ven­dor in In­dia over the next three to five years, after it sold more than 1 mil­lion hand­sets within 18 days in the world’s fastest-grow­ing hand­set mar­ket.

The an­nounce­ment came shortly after its arch ri­val Huawei Tech­nolo­gies Co Ltd con­firmed it would start as­sem­bling phones in In­dia in Oc­to­ber. This high­lights Xiaomi’s lat­est ef­forts to re­vive de­clin­ing sales as the Chi­nese smart­phone­mar­ket— it­shome turf— is reach­ing sat­u­ra­tion.

Lei Jun, founder and CEO of Xiaomi, an­nouncedthe­newsin an in­ter­nal let­ter on Wed­nes­day.

“In­dia is an ex­tremely im­por­tant mar­ket in­Xiaomi’s glob­al­iza­tion strat­egy,” Lei said. “It has be­come our largest mar­ket out­side of the Chi­nese main­land.”

Ac­cord­ing to Lei, as of Tues­day, the Bei­jing-based firm had sold 1 mil­lion smart­phones within 18 days in­Oc­to­ber in the run-up to Di­wali, the big­gest fes­ti­val in In­dia.

In Septem­ber, Xiaomi be­came the third-largest smart­phone ven­dor within In­dia’s top 30citieswith8.4per­cent­mar­ket share, the­fir­mquoted­datafrom In­ter­na­tional Data Corp as say­ing.

“We will con­tinue in­vest­ing in In­dia — ex­pand­ing our sup­ply, and fur­ther im­prov­ing our after-sales ser­vice,” Lei said.

Launched in 2010, Xiaomi achieved a rapid rise by seiz­ing the e-com­merce boom in China to sell hand­sets di­rectly to con­sumers.

But as on­line sales of smart­phones peak, it is strug­gling with de­clin­ing sales and fac­ing mount­ing pres­sure from ri­vals such as Oppo and Vivo.

Jin Di, a re­search man­ager at In­ter­na­tional Data Corp China, said it is hard to say whether Xiaomi can pre­vail in the In­dian mar­ket, given the grow­ing com­pe­ti­tion from both its Chi­nese peers and In­dian ven­dors.

“Al­most ev­ery ma­jor Chi­nese smart­phone brand is eye­ing a pres­ence in In­dia. I don’t think Xiaomi has a big edge, es­pe­cially when In­dia’s e-com­merce busi­ness, whichXiaomi is most good at, is not as well-de­vel­oped as that of China,” Jin said.

Also, it will take time for Chi­nese brands to prop­erly lo­cal­ize their op­er­a­tions, given the dif­fer­ent busi­ness en­vi­ron­ments and po­lices in In­dia and China, she added.

In the sec­ond quar­ter of 2016, smart­phone ship­ments in In­dia grew by a healthy 15 per­cent an­nu­ally, whilethe­glob­als­mart­phone mar­ket gre­wat a modest 3 per­cent. Chi­nese brands’ cap­tured al­most 27 per­cent of the In­dian mar­ket, data from Coun­ter­point Re­search show.

Xiaomi’s arch ri­val Huawei said on Tues­day it would start man­u­fac­tur­ing its first smart­phone model in In­dia in Oc­to­ber by part­ner­ing with a lo­cal fac­tory whose an­nual pro­duc­tion ca­pac­ity will reach 3 mil­lion units by the end of 2017.

Zhao Ming, in charge of smart­phone busi­ness atHonor, the sub-brand of Huawei, said: “The In­dia smart­phone mar­ket is likely to ex­ceed 100 mil­lion units this year. It is a mar­ket no one can ne­glect. We have longterm com­mit­ment to it.”

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