Connect with us

Company News

How Xiaomi Dethroned Samsung To Become The King Of Indian Smartphones

Five years ago it would have been unthinkable that global giant and India’s favourite phone company Samsung could be overthrown as the king of smartphones in India. It had superb brand recall. It was a distribution juggernaut. Its phones were hugely aspirational. And yet, a little known Chinese company called Xiaomi snuck its way into India and established a beachhead in 2016. India had not yet woken up to the Xiaomi machine as China had. In fact, it was widely dubbed ‘the poor man’s iPhone,’

Its game was online flash sales, and so adept was it in whipping up a frenzy amongst Indians with its rock-bottom $100-$200 Redmi phones that had everything a $500 marquee smartphone seemingly had that it created an immediate sensation in the Indian market. Its market share in 2016 quickly inched up to 3%, but it was still a minnow to the 25% Samsung market share whale. Since very little of India was online, let alone consuming things via the internet, the strictly-online Xiaomi was viewed as an interesting company — a rebel, a little cheap, and not quite in the same league as a Samsung.

Well that certainly changed, and at warp speed. Today, Xiaomi has swallowed roughly 28% of the Indian market while Samsung is lower at around 25 or 26%. Of course, figuring out who’s ahead of whom is a fool’s game in the rapidly shifting sands of a commoditised product that can by and large be assembled from off-the-shelf plug-and-play items like cameras, processors and gorilla glass. Market watchers evaluate the arena based on volume of units shipped, others on value of the phones. Today’s leader can be tomorrow’s laggard. Yet, Xiaomi has consistently eaten up market share like a relentless machine, while Samsung still floats pretty much around the same numbers going up and down by a few percentage points. How did such an upheaval take place in such a short period of time?

The immediate answer could be value. Today, over 66% of India’s market is swamped by Chinese brands, but Xiaomi was the first to offer dazzling phones at such low prices that Indians couldn’t believe their luck. They thronged sites like Flipkart, desperate to be the chosen few who were able to click that mouse fast enough to bag one of these babies. And you had to be fast — tens of thousands of phones disappeared off virtual shelves in less than eight seconds.

Certainly, the Indian brands like Micromax and Intex couldn’t stand a chance despite their impressive albeit temporary gains in the early smartphone wars. First, they failed to innovate in a deeply commoditised market like the Chinese and the Japanese were doing. Then, around 2017, they made the lethal mistake of not going the 4G route when the smart money was doing so.

Almost overnight, they were toast. In an era of flamboyant nationalism in India, seven out of ten of us in all likelihood will be carrying around — and lets let the irony soak in for a second or two — phones from our historical ‘arch enemy’, China, with whom we have had a difficult relationship to say the least.

The next piece of the puzzle that Xiaomi solved was by going after the offline market like a pit bull after they had so effortlessly conquered the online one. One in two phones sold on the internet is a Xiaomi. In 2017, it started putting up pop-up stores at large format electronic retailers, then its own multi-brand ‘Preferred Partner’ stores where they cleverly sold their own phones along with others to pad their per-outlet revenues, and then their exclusive Mi Home stores. This way, it managed to garner market share in tier-2 and tier-3 towns without spending a ton on a traditional, exclusive distribution strategy like, say, Samsung.

With a record shipment of 36.9 million phones flogged in the second quarter of 2019 and growth rates still sky high, Xiaomi seems destined for great things. Yet, the fickle ways of the smartphone business is such that a year may cough up a whole different market scenario. Xiaomi’s fellow Chinese rivals — Oppo, Vivo and Huawei — have also flooded the Indian market, though not with the same impressive strides as Xiaomi. Many of them are focused on niche segments of the market. Ultimately, it’s such a hotly contested space that things could change very quickly with many future Xiaomi’s wading in for a piece of the action.

And then there is Samsung, which is not exactly going to disappear anytime soon. In fact, it has climbed three percentage points, from 23 to 26% in the last year — and its retail reach and after-sales service network, not to mention its aspirational brand, are all still a big draw. Which means that Xiaomi has its work cut out for it in defending its gains. For now though, it can call itself the undisputed king of Indian smartphones.―ZD Net

Click to comment

You must be logged in to post a comment Login

Leave a Reply

Copyright © 2024 Communications Today

error: Content is protected !!