Xiaomi wants to be everywhere you are—but is the India market ready?

Xiaomi has the ambition to become the one brand that a consumer will ever buy for all things technology. Use the Xiaomi car to drive home from the office, turn on your air conditioning remotely to match the temperature in the car with the MiHome app, and by the time you are back home, the Xiaomi robot vacuum cleaner will have tidied up your home, the smart bulbs will have turned on as the sun sets, and the rice cooker will have heated your food. Oh, the smartphone, well, that’s the one controlling all these devices.

Could have been the opening credits of a favourite childhood show, The Jetsons, honestly. But that dream is far from reality in India.

Xiaomi is synonymous with affordable smartphones and televisions in India. As of August 2024, the company had a 13.5% market share, second only to Vivo (16.5% market share). In the television sector, Xiaomi had a 12% market share in Q1FY25 (Samsung - 16%, LG - 15%), and Xiaomi does not feature in the top 5 brands that control the wearables segment (smartwatches, smart bands, and earwear). 

Home automation

The company has brought in different elements of home automation over the last 7-8 years, starting with the air purifier, followed by smart bulbs in 2019, and the robot vacuum cleaners during the pandemic years. According to the company’s 2023 annual report, globally, Xiaomi’s AIoT platform boasted of 739.7 million connected IoT devices, up 25.5% YoY. 

Anuj Sharma, the brand’s chief marketing officer in India, explains that this is only natural in a country like India. “India is lagging behind in home automation versus the world,” he says. “Around 650 million people use smartphones in India, whereas wired broadband is only 12% of all households,” he points out.

The smartphone market is significantly larger than the home automation market. Sharma says growth looks encouraging for the next 5-10 years given the move towards 5G and 5G Customer Premise Equipment (tech that will allow any Wi-Fi-enabled devices to connect to the Internet by receiving 5G signals and then transferring them into Wi-Fi signals or wired signals).

Smartphone trends

Market research firm IDC has identified muted consumer demand amid rising average selling prices, which is restricting the annual recovery of the smartphone market. That said, the Indian smartphone market shipped 69 million smartphones in the first half of 2024, with 7.2% YoY growth. Xiaomi led the market in the entry-level (sub-US$100) segment and mass budget (US$100<US$200) segment. 

In the smartphone market, Xiaomi has been building its portfolio of 5G phones. Xiaomi’s Redmi 13C (Rs 12,499) and Xiaomi’s Redmi 12 (Rs 11,999) were among the highest shipped 5G models in Q2FY24. “Since August 2023, we have actively worked to build a 5G portfolio in the Rs 10,000-15,000 price band,” informs Sharma. The company hopes to drive 5G adoption with its affordable range. 

Sharma observes that the Rs 15,000 smartphone segment from 4-5 years ago has moved up to Rs 25,000-Rs 30,000. “These buyers are looking for phones that are all-rounders—good camera, durability, screen.” It is for this kind of consumer that the company offers the Redmi Note series.

In the premium segment, Sharma says it is the camera that seals the deal. A premium consumer is typically looking to upgrade to a better camera and not necessarily a better display or battery life. And it is with this in mind that Xiaomi tied up with Leica, the camera lens maker, for its Xiaomi flagship series. 

Xiaomi makes flip-and-fold phones but does not yet sell them in India. Sharma says this is for three reasons: the form factor does not still match up to a slab phone, the screen durability has room for improvement, and cost—they are priced a lakh and above. “At Xiaomi, we like to do everything in a big way and reach as many people as possible to achieve economies of scale. We are still figuring out how to bring these products to the Indian market.”

The complexity of marketing 

Xiaomi invests in everything from influencer marketing to connected TVs for its marketing campaigns, but how does it decide when to spend on what? Sharma says that 15 years ago, decision-making was simple. With media consumption getting fragmented, “we cannot say that we will forgo CTV for a large-scale campaign,” he says.

Sharma prefers YouTube for a mass campaign to target a wide audience, and OTT ads take priority for premium devices like the robot vacuum cleaner. Xiaomi invested in CTV ads for both Wimbledon and the Cricket World Cup. “It is not a question of should we add it to the mix but how do we use it.”

Q-comm has changed how companies stock their products with e-tailers. Sharma says q-comm works especially for impulse buys—power banks, earphones. The company focusses on these small value buys for q-comm.

The complete purchase cycle for smartphones (from making the decision to buy to the actual purchase) is as long as 24 days; therefore, only a consumer who has decided to make the purchase is likely to buy a phone on q-comm. 

Watch full interview: Anuj Sharma, CMO of Xiaomi India, talks with Venkata Susmita Biswas, Executive Editor of afaqs