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How China's Xiaomi took India's smartphone market by storm

When Xiaomi first launched in India in 2014, its goal was to sell at least 10,000 smartphones in the country....

Posted: May 1, 2018 12:33 PM
Updated: May 1, 2018 12:33 PM

When Xiaomi first launched in India in 2014, its goal was to sell at least 10,000 smartphones in the country. In the first three months of 2018, the Chinese tech firm sold more than 9 million.

Xiaomi now accounts for over 30% of India's smartphone sales, according to industry estimates. At the end of last year, it broke Samsung's six-year dominance of the country's fast-growing market.

"You will laugh at me if I tell you the initial plan," Manu Jain, managing director of Xiaomi India, told CNNMoney in an interview. "Not even in our wildest dreams did we think we would be able to achieve so much in so little time."

They did it, Jain said, by going local.

"To build a long term sustainable business in India, we have to act like a local Indian company," he added. That meant making devices tailored to the needs of Indian consumers, and building them in the country itself.

Spurred on by Prime Minister Narendra Modi's "Make in India" initiative, the company opened its first Indian factory in 2015 and started production within a matter of months.

"We've had maximum support from both state and central governments whenever we needed it," Jain said.

Related: India poised for smartphone revolution

Xiaomi's upsurge in India has helped offset a decline on its home turf. Once a clear leader, the company is currently placed fourth in China's slowing smartphone market, behind local rivals Huawei, Oppo and Vivo.

More than 95% of Xiaomi smartphones sold in India today are made in India, allowing the company to avoid the tariffs on imported smartphones that have hobbled rivals such as Apple. Apple finally gave in last year, announcing it would start making some iPhone models at a plant in Bangalore.

Apple has one plant, Xiaomi has six

Xiaomi, meanwhile, recently tripled its Indian manufacturing base by opening three new factories in the country in partnership with Taiwanese electronics firm Foxconn. That makes a total of six facilities that Jain says can produce two smartphones every second.

The company will also start making circuit boards for its devices in India and is trying to convince more of its component suppliers to set up shop there.

"If India has to become a truly global supplier hub -- which is something that is really required -- we are happy that we are able to play a small role in this," Jain said.

Related: Xiaomi tightens grip on India's smartphone market

While the government push to encourage local manufacturing has been "incredible," Jain said it wasn't the main reason Xiaomi opened factories in India.

"It's closer to the consumer, closer to the market, more expensive to import from China," he said. "We are just trying to go two steps ahead of the current regulations."

Making smartphones in India has also allowed Xiaomi to slash its prices, giving it a huge competitive advantage over importers in a country where demand is exploding but the average annual income is still less than $2,000.

"Apart from being some of the best value devices on the market, Xiaomi's smartphones are now available in more places and in larger quantities," Ishan Dutt, an analyst at mobile research firm Canalys, wrote in a recent note. "Xiaomi is becoming a force to be reckoned with in India," he added.

'You don't need to pay a lot of money'

It's all down to what Jain refers to as "honest pricing."

"What Xiaomi made people understand was that for you to have a quality product, you don't need to pay a lot of money," he said. "We broke that myth."

Xiaomi is now looking to expand its range of products and become India's leading electronics brand. The company already sells a range of other items including smart TVs, power banks, air purifiers and wearable devices.

But smartphones are at the heart of the Chinese company's India strategy, and its most compelling opportunity.

"Unlike the West and in China where people were offline, then online using desktops, then laptops, then mobile ... people skip all these stages and go directly from not being online to being online via a smartphone," Jain said.

"The thing that keeps me excited is that we can truly transform Indian society."

Mississippi Coronavirus Cases

Data is updated nightly.

Cases: 497790

Reported Deaths: 9917
CountyCasesDeaths
Harrison34102530
DeSoto31839398
Hinds31837622
Jackson24314377
Rankin21881388
Lee15427234
Madison14525279
Jones13772241
Forrest13412250
Lauderdale11937314
Lowndes10934185
Lamar10470135
Pearl River9431237
Lafayette8454138
Hancock7697126
Washington7365156
Oktibbeha7111129
Monroe6727174
Warren6642176
Pontotoc6609101
Neshoba6606205
Panola6460131
Marshall6386132
Bolivar6266145
Union596094
Pike5784152
Alcorn5633101
Lincoln5417134
George491879
Scott470998
Tippah465381
Prentiss464181
Leflore4627143
Itawamba4596104
Adams4570119
Tate4546109
Copiah445191
Simpson4421116
Wayne438572
Yazoo438586
Covington427394
Marion4216107
Sunflower4215104
Coahoma4115104
Leake407787
Newton380879
Grenada3692108
Stone358464
Tishomingo356391
Attala330289
Jasper328265
Winston313191
Clay306375
Chickasaw296767
Clarke290694
Calhoun277945
Holmes266987
Smith262550
Yalobusha232647
Tallahatchie225251
Walthall217763
Greene215548
Lawrence211140
Perry204755
Amite203954
Webster201645
Noxubee185340
Montgomery179056
Jefferson Davis170642
Carroll167438
Tunica158639
Benton147438
Kemper141241
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Claiborne131237
Humphreys129038
Franklin119128
Quitman106227
Wilkinson104539
Jefferson94234
Sharkey64020
Issaquena1937
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Alabama Coronavirus Cases

Cases: 813481

Reported Deaths: 15179
CountyCasesDeaths
Jefferson1139971910
Mobile722271323
Madison51970686
Shelby37279341
Baldwin37069540
Tuscaloosa34934599
Montgomery33953725
Lee23142240
Calhoun22142470
Morgan20639372
Etowah19758496
Marshall18245300
Houston17302405
St. Clair15912337
Cullman15306290
Limestone15202198
Elmore15075284
Lauderdale14143294
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DeKalb12569259
Walker11085366
Blount10094174
Autauga9893146
Jackson9789180
Coffee9182189
Dale8859181
Colbert8789200
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Escambia6732127
Covington6682179
Chilton6587160
Russell625958
Franklin5930105
Chambers5559142
Marion4955126
Dallas4882199
Clarke472782
Pike4719105
Geneva4564126
Winston4473101
Lawrence4264117
Bibb421686
Barbour355475
Marengo334089
Monroe330262
Randolph327063
Butler324794
Pickens313882
Henry310965
Hale309187
Cherokee299957
Fayette290679
Washington250951
Cleburne246958
Crenshaw243575
Clay240367
Macon230562
Lamar215846
Conecuh185652
Coosa178538
Lowndes173761
Wilcox167438
Bullock151744
Perry138040
Sumter131038
Greene125544
Choctaw86927
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