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Why Xiaomi is aiming high in India

Lei and Barra display Mi 4i phones during its launch in New Delhi

Xiaomi is today considered one of the most valuable and desirable Smartphone Company across Asia, all this happened in just five years of launching the Company, hitting the top charts in World’s top mobile manufacturers

As of now, Xiaomi Market value is $ 45 Billion. 2014, Xiaomi became China’s Top supplier of Smartphones , taking No. 1 slot away from Samsung. The most remarkable point about Xiaomi is , it never used Brick and Mortar stores ( Except India, where Company tied up with The Mobile Store and Airtel ) and always relied heavily on On-line campaigns, user and fan base, Social Media and yes, most important, low pricing as compared to Competition Models in Samsung and iPhone.

To reduce the price of handsets, Company normally sells smartphones at a minimal margin and makes profit from Apps and softwares. That’s one of operating Module of Xiaomi.

Why Xiaomi needs Indian Market 

We do not need Xiaomi as Indian Smartphone market is already flooded by manufacturers, but, Xiaomi need Indian base owing to following reasons :

1. High Demand and Conversion Rate : India is one of the fastest growing smartphone market, with a penetration rate of almost 30 % in Smartphones. On the other side, Chinese and American Market is already coming to saturation point. Moreover, Indian customers have a higher switch rate in brands. Always looking for value for money / price vs features Smartphones.

2. Base for manufacturing : Wages are going sky high in China and it’s no more a paradise for Smartphone manufacturers as costing is going high and India still offers a better opportunity for low price manufacturing.

3. Route to MEA Markets : By sitting in India as a manufacturer, its very easy to ship Mobiles to Dubai and MEA markets as compared to shipping from China / Hongkong. Transportation cost is decreased a lot.

40 Ton container cost from Mumbai to Jebal Ali ~ 1700 $

40 Ton container cost from Tianjin to Jebal Ali ~ 2900 $

4. Market Share : Two biggest Smartphone markets in hand can take Xiaomi World wide Market share to at-least 10 %. Moreover leadership  in India and China Market, will strengthen Global Prestige of Xiaomi and definitely help in establishing product in near by Markets.

5. Change of Perception : Chinese products still do not enjoy that prestige which ” made in India ” enjoys.

6. R & D facility : LG, Samsung are already enjoying Indian Talent at their R&D centers and developing world class products. It’s time for Xiaomi to utilize Indian Tech Talent in a smart way to design New Products. Hiring Indian Talent will have dual advantage, Technical and Verbal skills ( English speaking ).

Hope the Political Tie-up between India and China will lure manufacturers to open more facilities at India, creating both Business as well as Job opportunities which is a win-win situation for both.

 

 

 

 

 

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Rakesh Bhatia

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