Xiaomi has been the top smartphone brand for consecutive quarters in India, owing to its specs vs price balancing. With sub-brands like Redmi and Poco, the Chinese company expanded much beyond metros, reaching diverse audiences at different price points in more than eight years of its journey.
With progress came allegations, but Xiaomi is trying to remain committed to the Make in India initiative and stay relevant to emerging 5G needs.
In an exclusive interaction with The Hindu, Muralikrishnan B, President of Xiaomi India, talked about the brand’s journey, its ups and downs, and the roadmap for 2023 as it prepares to launch the Redmi Note 12 series.
How does Xiaomi feel after completing a post-Covid year and becoming an eight-year-old brand?
Muralikrishnan B: Xiaomi entered the Indian market in 2014 with a commitment to provide the best-in-class technological innovation at honest pricing. The past year presented its own unique and unseen challenges for the whole industry. As we look back, after two extremely strained years, the overall market continued to be on the decline in 2022 because of multiple factors. The pent-up demand due to work-from-home/learn-from-home cases dried up, the entry-level segment shrunk because of inflationary impact and mid-price segments saw consumers delay upgrade cycles as they waited for 5G network rollout and cheaper 5G devices.
Over the past eight years, we focused on executing our vision of making technology accessible to everyone. We launched a wide array of products across smartphones, smart LED TVs, Notebooks, and AIoT categories and received phenomenal responses from consumers.
As a consumer-centric brand, we take pride in understanding the consumer pulse and offer products that cater to consumer needs and elevate their digital lifestyle. Over the years, we have become one of the fastest-growing smartphone brands and the number one smartphone and smart TV brand in India.
We believe that Xiaomi India has played a pivotal role in catalysing the 4G revolution, contributing towards the Digital India initiative. At a time when affordability was a key deterrent, Xiaomi stepped into the fray and made 4G a reality for the masses.
In the past year, we launched exciting products like Xiaomi 12 Pro, Xiaomi OLED Vision TV, and Redmi K50i, amongst others.
As a young organisation committed to fostering new and young talent, we introduced the Mission 300 program wherein we hired over 300 students from Tier 2 colleges. Additionally, we introduced several campus-focused programs like Ode2Code, and MiSummit in a bid to hone homegrown talent.
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Xiaomi’s Q3 shipments declined by 18% as per IDC. How did that happen? Was macroeconomics to be blamed for that slump?
MB: The overall smartphone market demand has seen a dip in demand owing to macroeconomic and sectoral factors. We can attribute the slump to satiated demand amongst households, inflation and rising ASP, lack of credit facilities for upgrades, and stagnated upgrade cycles for the mid-range segment, amongst others.
Inflation has eaten into the affordability in the lower-end segment which has caused a decline in the market. However, our Diwali sales showcased an upward growth trajectory as we sold over 11 million devices across categories this year during #DiwaliwithMi.
With this, 2023 seems positive. However, we expect the market will take some time to recover to pre-Covid levels. At Xiaomi India, we are planning a robust strategy with an exciting line-up of products for our consumers to enhance their experience.
The year 2022 wasn’t great for Xiaomi. Multiple raids, freezing of assets, and pulling out of start-up investments made it rather unforgettable for the brand. How did things go that badly for Xiaomi?
MB: As a responsible corporate citizen, we are fully compliant with the laws of the land. These issues are sub-judice and hence, it is not appropriate for us to comment at this stage.
We will continue to focus on democratising technology for the masses, delivering innovation for everyone, and scaling Make in India initiatives with a focus on the component ecosystem. Along with it, we will continue to drive our smartphone X AIoT strategy.
Can we expect Xiaomi to start its own manufacturing unit in 2023 here so that the brand’s seriousness towards Make in India gathers momentum and inspires others?
MB: As a brand committed to the country, Xiaomi India has been in-line with the government’s Make-in-India initiative since its inception. Today, more than 99% of our smartphones and 100% of our smart TVs sold in India are Made in India.
In a bid to consistently ramp up manufacturing in India, we encouraged global as well as local Indian partners to manufacture for us. We have six EMS partners in India. Today, Bharat FIH, Flex, BYD, and DBG manufacture smartphones, and Dixon and Radiant Technologies manufacture smart TVs for us in India.
Going forward, we would like to focus on broadening and deepening the local supply chain ecosystem (including components) in India and encourage our old and potential partners to take this ahead.
Did the freezing of assets affect your product line-up in 2022? How it could be different in 2023?
MB: Despite the challenging year, our Diwali sales showcased an upward growth trajectory.
In 2023, we are focused on redefining the smartphone experience and disrupting the mid-premium segment with flagship tech and we intend to increase our focus on 5G-enabled devices.
Xiaomi aims to maintain strong sales of both high-end and entry-level products while concentrating on 5G devices and the Note series.
Does the rising average selling price (ASP) concern Xiaomi which relies heavily on budget and mid-segment buyers?
MB: Rising ASP is an external macroeconomic factor, as well as consumer demand for more powerful and capable devices. The weakening of the Indian rupee is a cause of concern and has caused upward pressure on the prices. As a brand, while we are trying our best to absorb the impact of USD appreciation for the past few months, we continue to assess the market situation at any given point and take decisions accordingly.
However, it must be said that there continue to be opportunities at the entry-level segment with millions of users upgrading from feature phones to smartphones. At Xiaomi, we are focused on delivering products with the best of tech, the highest quality, and honest pricing and shall continue to do so.
What new tech innovations await us from Xiaomi in 2023?
MB: The overwhelming response we have received so far from our customers has pushed us to bring in the best of everything in every segment, thereby helping us set an industry benchmark.
Over the years, we have continued to introduce path-breaking innovations, technological upgrades, and industry-firsts on our smartphones. This will continue to be our vision going forward.
Recently, we announced a 200MP camera sensor and 120W charging on our upcoming Redmi Note 12 series smartphone, which is a first in this segment. Other than that, you will see more 5G-enabled devices from our portfolio, especially in the 10-15K segment. We will also ensure a smarter and more connected ecosystem for our consumers through smart upgrades and launches in our ecosystem portfolio.
Additionally, we will continue with our ‘Phone Plus’ strategy wherein we will keep working on improving our products, especially earbuds and smartwatches.