Extending the ban against Chinese apps in India, the local government has recently banned the browser made by Xiaomi. How will this China-based market leader retain its competitive edge amid adverse policies and market sentiment?
Data security won't be an excuse anymore? Image credit: Xiaomi
Xiaomi (01810:HK) is the largest smartphone shipper in India, with around 24% of the total market. Amid the international tension, software developed by the Chinese companies, such as Mi Browser Pro, Mi Community app and Mi Video calls, are now on the Indian blacklist.
On August 7, Xiaomi India, as the first Chinese company that officially responded to the Indian government regulations that targeted the company, claimed the following:
1) None of the blocked apps will be available for access on any Xiaomi phones launched in India and a new version of MIUI operating system will be built without pre-installation of any of the blocked apps.
2) Since 2018, 100% of Indian user data is stored on the servers located in India and none of this data is shared with anyone outside of India.
The claims showed Xiaomi’s Indian team is trying to maintain the public image of an Indian local enterprise with social responsibilities. Following the government instruction and consequently being protected and mutually beneficial to the government and the Indian people is a certain choice.
As a result of the India tax increases in recent years for electronic products, Xiaomi has been rooted in the local industries from along the supply chain through acquisitions and investments. Large independence has also been achieved in terms of marketing and operation.
Though the Internet service sector of Xiaomi will be severely affected by the policies, the smartphone business might be safe in the short term. Opportunities for Chinese vendors that have been staying low-key and local as realme and OnePlus are ready. Samsung (005930:KR) has already been gaining more Indian customers since the first dispute happened in 2020 between India and China.