Xiaomi Invests 509 Million Into Indian Sub: India Has Not been Forgotten

Author: Jia Li Mar 21, 2019 10:50 AM (GMT+8)

This year, Xiaomi has invested 509 million into its Indian subsidiary. The first one was in January and the investment amount was Rs 15 billion. And the second one was in March with the total investment of Rs 20 billion.

Xiaomi Invests 509 Million Into Indian Sub: India Has Not been Forgotten. PHOTO: Credit to  Akhil Chandran on Unsplash

This year, Xiaomi has invested 509 million into its Indian subsidiary. The first one was in January and the investment amount was Rs 15 billion (USD 218 million). And the second one was in March with the total investment of Rs 20 billion (USD 291 million), reported by Gadgets Now.

Although, this year, Xiaomi seems focused more on high-end tasks such as expanding and winning the European market, aiming upmarket with more expensive phones, and advanced technologies such as 5G and AIoT.

From the beginning of this year, Xiaomi has not emphasized much about India on its key public events, however, India market has not been forgotten.

What Xiaomi has achieved in India 

Xiaomi firstly entered the Indian market on July 15, 2014, partnering exclusively with Flipkart, an e-commerce platform. 

Its goal was trying to sell at least 10 thousand smartphones in India; while in the first three months of 2018, Xiaomi sold than 9 million.

By the end of 2017, it has broken Samsung's six-year dominance with occupying over 30% of the total market share.

The strategy that Xiaomi used in India was going local. For example, setting up local factories. CNN says that more than 95% of Xiaomi smartphones sold in India are made in India. The benefits resulting from this strategy can be winning more government support and splashing phone prices.
India has been Xiaomi's best performing and the most important overseas market. 

Products

For now, the most popular items that Xiaomi has in India are phones. In India, Xiaomi has Mi flagship phones, Redmi and Poco. Poco is Xiaomi's new smartphone line priced at an affordable price and mainly sold in India.

Other than phones, Xiaomi also sells Smart TV in India. Its Smart TV was firstly introduced on its flash sales and sold out in under 10 seconds. Within 6 months, Xiaomi claims its TV sales record reaches 500,000.

What are the investments for

The investment fund will be used for two main purposes. The first is to enter and expand in the home appliance market and launch products such as water purifiers, washing machines, laptops, and refrigerator ers. The second purpose was to expand MI Home, Xiaomi's offline stores.

Perhaps the previous success of its smart TV might encourage them to dig more into the home appliance market. 

Moreover, in 2019, AIoT is the key strategic focus of Xiaomi. Earlier LEI Jun (雷军), the founder of Xiaomi claimed that they will spend 10 billion in AIoT over the next 5 years. And to connect those home appliances are the fundamental parts of implementing AIoT. 

IoT essentially means connecting and digitalizing home appliances. For example, one IoT application could be that the refrigerator could automatically re-order grocery products. 

The significances of implementing IoT strategy

IoT is among the four business areas stated in Xiaomi's prospectus. Now Xiaomi claims that it has the largest IoT platform in the world with more than 151 million devices connected (excluding phones and laptops). 

Back in 2015 when Xiaomi first introduced its IoT strategy, it has the plan to take phones as the key to connect all other devices and gradually transform the traditional home appliance field.

Firstly Xiaomi started its IoT plan was because of the demand from companies within its so-called Xiaomi ecosystem. At that time, most companies in that ecosystem were the traditional hardware manufacturer who is not familiar with getting intelligent or even digitalized. That means they need technical support from Xiaomi.

If more revenues can be generated from IoT, then it might further turn Xiaomi into an internet company instead of a hardware manufacturer. 

The reason for investing heavily on India might be because India's large population of 1.37 billion based on UN data and 600 million teenagers aged below 25  might also help