A slowing Chinese market and a booming eCommerce industry in India is making China’s largest smartphone maker, Xiaomi, shift its focus to sales in India.
The Beijing-based company is betting on the shifting preference of Indian consumers to shop online rather than heading to mom-and-pop stores. Currently, about 30 percent of smartphones are sold online in India, and it is expected to hit 50 percent in the next few years, Xiaomi President Bin Lin told The Wall Street Journal.
“Look at the growth of Flipkart, Amazon, Snapdeal, Paytm, all these guys. We haven’t even remotely seen the limit of that,” Lin said.
The company, which currently leads mobile phone sales in China with a narrow margin over Apple, has, so far, heavily relied on eCommerce, rather than keeping stock in physical stores, to keep its prices low. Xiaomi’s flagship phone, Mi 5, is priced at $250, which is over 2.5 times cheaper than Apple’s $650 iPhone 6s. Its made-in-India smartphone, Redmi Note 3, is sold for about $150.
In India, the smartphone maker faces stiff competition from Micromax Informatics, a top domestic player, and China-based Lenovo — both of which offer affordable smartphone products.
“We are not too worried about [competitors cutting prices],” Lin said. The cost of Xiaomi’s smartphones are lower than those offered by other players, and so they can’t continue to offer phones as good and cheap as Xiaomi’s forever, he said.
Xiaomi’s interest in growing sales in India, where it ranks third in terms of online sales, comes after the company missed its global sales target of selling 80 million mobile phones in 2015, according to WSJ.
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