Xiaomi says rival players just make hardware

India head says online gets 90% sales

Unswayed by doomsayers asking it to overhaul its India market approach, Xiaomi India says it will stay firm on its core philosophy of being a mobile internet company which would like to be more close to Indian consumers.

“We don’t mind competition in the market even though we made disruption in the sub $200 category. We are a mobile internet company and do not want to be known merely as a hardware firm. But we do build high-end products to customers and our competitors are only hardware companies,” said Xiaomi Corporation general manager and head of India operations Manu Kumar Jain.

In an interaction with Deccan Herald, Jain said the company basically sells products online as it helps the company pass on the benefits to customers by making them affordable.

“Xiaomi globally sells around 75 per cent of our products through the online medium and the rest offline. In India, more than 90 per cent of revenues come from online. When we started off in July 2014, Xiaomi partnered with Flipkart. Then we tied up with Airtel to sell  products via their own showrooms from last April onwards,” he said.

Xiaomi entered into deals with Amazon and Snapdeal in April this year to expand its market reach. “We piloted a study to target customers through offline mode in New Delhi by tying up with The Mobile Store. We found 3X increase in sales and now plan to roll out pan-India,” he said.

When asked about any compulsion to go offline, Manu said there is no yes or no answer to the question and said the company is still trying to understand the market. “In India, Xiaomi reaches 1,500 cities from Kadappa to Kannur and Rampur via online. If we had decided to start offline, we would have to spent huge money and time,” he said. “Xiaomi is a startup and experimenting various ways of doing business. We are looking at the different things we can do and saying, ‘let us try it out’. If things succeed, we can scale them up.”

He said the company’s eventual aim is to provide great internet experience than just sell hardware. “We are providing Mi4 at Rs 19,000 to our customers with amazing software experience and we compete with others who are priced above Rs 35,000. We do not want to make significant money via hardware only,” he said.

According to an analyst, recently Lenovo made more inroads in the sub $200 smartphone niche through its systematic offline sales model. “Xiaomi failed to pick up momentum because it focuses on the online medium and there is really a compulsion on the company to go offline,” he said.

Even though legal tangles hit the company’s expansion in India, Xiaomi spread its foothold by selling more than one million products by the beginning of this year via online flash sales driven mainly through social media and spend little on advertisements.