Xiaomi is seen as a budget player in India, but it is aiming to
change that in 2020.
What do you think of when you hear the Xiaomi name? For Indian
consumers, the brand is synonymous with budget phones, and for good
reason. For the last five years, Xiaomi flooded the Indian market
with a wave of entry-level and budget phones, allowing it to rise
up the ranks and become the country’s largest phone manufacturer.
Xiaomi held that title for more than two years now, and it did so
purely on the back of the Redmi series.
That’s why it’s interesting to see that the brand is now
focusing its attention on the premium segment. At a roundtable held
in Delhi earlier this week, Xiaomi’s category head Raghu Reddy
charted out the brand’s commitment to the premium category, stating
to Gadgets 360 that several “Mi premium
flagship devices” will make their debut in India over the course of
Xiaomi will have a tough time casting off its budget roots and
establishing itself as a premium brand in India.
Xiaomi’s intentions are straightforward enough, but the brand
will have a tough time convincing customers to buy into its premium
devices. Xiaomi has done a remarkable job establishing itself as a
budget player, and to break off those roots and focus on the
premium segment will be a significant undertaking. Xiaomi spun off
the budget Redmi series into its own sub-brand last year, and while
there’s a clear differentiation between both the Redmi and Mi
brands in China, that isn’t the case in India.
The Redmi brand is synonymous with the Mi label in India, and
that has worked for Xiaomi in the past because it didn’t launch
many high-end devices in the country. Aside from the Mi Mix 2 and
the Android One-based Mi A1/A2/A3, Xiaomi has
focused solely on Redmi devices, but it is now looking to change
that. From Reddy:
We had only the Mi A series in the last two, three years — Mi
A1, Mi A2, and Mi A3. Outside of that, we didn’t have any tangible
product out there. But now, when we’re saying that we are looking
to build on the Mi series to build premium flagship devices and
bring them into the country, there is going to be clear
differentiation and that means that you will see a very distinctive
approach for Redmi and a very distinctive approach for Mi — both
of which are going to be different from each other.
Why is Xiaomi suddenly interested in launching premium products
in India, you ask? Realme, of course. The BBK-owned upstart is
eating into Xiaomi’s market share in the entry-level and budget
segments, and it has managed to outmaneuver Xiaomi at every turn in
2019. So Xiaomi is doing what it can to stay ahead of the game, and
that means leveraging its vast catalog of IoT and lifestyle
products under the Mi label. There really isn’t another brand in
this part of the world that offers such a diverse array of smart
home products, and Xiaomi will be looking to use that to its
advantage in India.
Xiaomi now has the unenviable task of luring customers away from
the likes of Samsung and OnePlus.
Another point to consider with the newfound shift to the premium
segment is that Xiaomi will be looking to launch devices like the
Mi Mix Alpha in India at some point this year. Whether customers
will actually buy a Mi-branded device over the likes of Samsung or
OnePlus is an entirely different matter. The Mi Mix 2 failed to
attract any momentum in India two years ago, and in that time
OnePlus has consolidated its position in this category.
Furthermore, Xiaomi’s perception as a value player means it will
have a tough time convincing buyers to shell out the big bucks. The
backlash that ensued with the Redmi K20 series is
clear proof that Indian customers are primarily interested in
getting their money’s worth when they’re picking up a Xiaomi
product. While Xiaomi was able to deliver on that front in the
budget category by regularly delivering great value — often
taking a hit to the bottom line — it won’t be emulate a similar
strategy in the premium segment.
Only time will tell whether Xiaomi is able to leverage Mi as a
premium brand in India, but its roots in the budget segment pose a
significant hurdle to the brand.
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Source: FS – Android
Xiaomi wants to launch its premium devices in India, but it won't be easy