Xiaomi makes its largest investment in India so far

Xiaomi makes its largest investment in India so far
Xiaomi Global Vice President Zhang Feng, Minister Counsellor in the Chinese Embassy Li Bijian, Niti Aayog CEO Amitabh Kant and Xiaomi India Managing Director Manu Kumar JainPTI

  • Xiaomi has invested ₹35 billion in the Indian market so far in 2019.
  • It’s the largest investment by the Chinese company since its entry into India four years ago.
  • Xiaomi plans on using this investment to expand its portfolio and build on its offline presence.
Amid protests of Indian users on Twitter to #BoycottChineseProducts after China blocked the United Nation Security Council’s move to blacklist Masood Azhar on March 13, Xiaomi — India’s largest smartphone manufacturer with its headquarters in China — made its biggest investment in India so far of ₹35 billion.

Xiaomi’s total investment of ₹35 billion consists of two fusions from Xiaomi Singapore. One, from January, of ₹15 billion and another in March on ₹29 billion.

This is the largest investment made by Xiaomi in the four years that it’s been operating in India. Since then, not only has the company’s revenue grown steadily but so has its market share. So much so, that it overtook Samsung in 2018 with a market share of 28.9%, according to the International Data Corporation.

But, according to industry executives who spoke to the Economic Times, Xiaomi is looking to expand into other sectors.


This doesn’t come as surprise since Manu Kumar Jain, the CEO of Xiaomi, hinted at launching many more product categories in India as early as last year, his only concern being customising those products for the Indian market.

Jain also hinted that Xiaomi will only foray into areas where stringent regulations wouldn’t apply. Rather than bring in products like drones, he said he would focus on more lenient sectors like electric cycles.

Since the company is also primarily reliant on online platforms for the sale of its smartphones, the investment will also be used to strengthen the company’s offline model in India by creating more stores around the country. Xiaomi currently has 26 exclusive stores and few hundred stores through its franchise partners.

Doing to Samsung, what Samsung did to Nokia

Xiaomi's rise in India and its impact on Samsung's market share is similar to the impact that the South Korean mobile manufacturer made on Nokia when it first came to country.

At that point, it was Nokia that wasn't able to keep up with new 'smartphone' disruption in the market but with Samsung, it's a different story. Samsung is no way behind the times when it comes to technology with its dual aperture Galaxy S9 last year and the launch of the Samsung Galaxy Fold earlier this year.

But, the company has been missing the mark when it comes to pricing, engagement and online strategy. Segments where others brands have managed to innovate. Not just Xiaomi but OnePlus as well, who managed to take Samsung's lead in premium smartphone segment.

India a key market for Xiaomi as the demand back home is shrinking. And diversifying into new segments would mean that Xiaomi will be able to launch products with higher margins.

See also:
India’s first foldable smartphone might be a Xiaomi device — and it’s half the price of the Samsung Galaxy Fold

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