Big Interview: Reaching out to more Indians
Interview: Manu Jain, Vice President of Xiaomi Global and Managing Director of India operations

Beijing-based smartphone maker Xiaomi is in news for all the right ringtones. The Chinese company has edged out its strongest Korean rival Samsung Electronics to grab the number one position in India with a 27 per cent market share through an aggressively priced suite of high-spec handsets and market expansion strategy. The Chinese company, which entered India only three years ago, is exploring a public listing and is valued at about $100 billion. It recently held its global supplier summit here showcasing Indian manufacturing opportunities to its vendors amid a 10 per cent import duty on some key components, including PCBs. At this crucial juncture of growth trajectory, Manu Jain, vice president of Xiaomi Global and managing director of India operations, shares how by the next quarter, 100 per cent of RedMi phones would be manufactured locally, during a chat with Anjana Das
The government has imposed a 10 per cent import duty on key smartphone components like camera module and printed circuit board assembly to boost domestic manufacturing. Yet Xiaomi has taken a lead ahead of others?

Xiaomi has announced setting up of three additional manufacturing plants for smartphones across Andhra Pradesh and Tamil Nadu in partnership with Foxconn. We have also started manufacturing smartphones at our Hipad technology plant in Noida. Overall we have six smartphone plants. We have also started manufacturing PCBA locally at our plant in Tamil Nadu in partnership with Foxconn. All our six plants in India are catering to India’s demand and we hope to significantly increase our supply in this market.

Today, more than 95 per cent of Xiaomi’s smartphones sold in India are manufactured locally.

The recent global supplier investment summit in India has been an evaluation of opportunities for setting up local base in India. Did you push for smartphone component suppliers to invest in India to cut down on overall costs of your phones?

The overall objective of this summit is to push “Make in India” initiative further. We are working towards this for the overall movement of the electronics manufacturing industry. We had invited 50+ global suppliers of Xiaomi to India to evaluate the Indian smartphone market for manufacturing and potentially invest in local manufacturing. Bringing all these global suppliers to India would be cost effective, but that is not the key objective. We can make our products more accessible.

Xiaomi is up against other Chinese companies like Vivo, Lenovo, Oppo in competition. How do you see the market here in terms of making profit or revenue as it is a highly competitive with multiple players?

Our approach to the Indian market is very different. India is the most important market for Xiaomi outside Mainland China, and we have truly globalised in this market. Today, we have a successful online and offline business running in India. The market has witnessed several global launches such as Mi A1, Redmi Note 5 Pro and also several firsts such as first market outside China to receive Mi TVs, first market to receive crowd-funding program, or to globally to receive Qualcomm Snapdragon 625 device (Redmi Note 4). India is a big smartphone market, projected to be the #2 smartphone market in the world by 2020 as per public estimates.

Your market share in India is quite strong now. Xiaomi toppled Samsung to become the top smartphone seller in India in Q4 of 2017 as per Counterpoint, Canalys. How are you placed to continue with this number one slot as Samsung has already upped ante with S9 and S9 Plussmart phones and Vivo is equally aggressive?

Xiaomi has grown to become the number one smartphone player in India over last three years, with an overall market share of 26.8 per cent as per Q4 IDC Quarterly Smartphone Tracker, 2017. Xiaomi is also the number one player in the online smartphone segment with 57 per cent market share and the number two player in the offline space with 11.2 per cent share as per the IDC report. We will continue on the pursuit of innovation and would aim to be constantly ahead of the pack in trying out new technology. We have products ranging from Redmi 5A (priced at Rs 4,999) to flagship products like Mi MIX 2 priced at (priced at Rs 32,999). Our innovative online and offline business model and approach to bring our products to our Mi Fans via online and offline platforms, we started with e-commerce, which is the most efficient distribution channel because it takes less money to deliver the product to the consumer.

Your strategy in India in the last three years has been flash sales on leading homegrown e-commerce sites like Flipkart and, an approach that helped it snatch market share without having to spend heavily on marketing. Is there any plan extend presence also in terms of showrooms, shops or set up exclusive zones like Samsung Galaxy?

At present we have 32 Mi Home stores in India. The future plan is to open 100 Mi Homes in India by the year-end. We also have Mi Preffered partner stores, which are multi brand retail stores of smartphones and are usually the leading stores in their clusters. Currently, we have more than 2500 Mi Preferred partner stores across 25+ cities in India. We have also partnered with several leading large format retailers in India like Sangeetha, Poorvika, BIGC, Lot, Big Bazaar, Reliance, Croma etc. We started with building our aggressive offline presence in Q1 2017. Xiaomi is an internet company and we follow an Internet+ approach for our offline presence. This means we try and reduce the operational inefficiencies as much as possible in the process. It is inspired by our internet business where we try and reduce several intermediaries in our offline business which help us keep our sales model and operational costs lean. We are present in our offline business across three prongs: Mi Home, Mi Preferred Partner stores and large format retail partners. With Mi Home, we are extending our business into offline and Mi Home is our exclusive offline store. We have been able to build almost all of this in one year of offline operations and as of Q4 2017 by IDC, we are #2 offline brand with 11.2 per cent market share.

Bundling up with telecom service providers is the game in India. Do you have any plans to tie up with as many TSPs?

We aim to provide the best user experience possible across all our devices. We have tied up with Airtel, Jio and Idea in the past for certain products to give the best value proposition for our users. Redmi 5 has an exciting Jio offer running currently.

Foxconn is your current partner. Any plan to expand this list because you are on a growth mode?

Foxconn is our trusted partner for local manufacturing and together we have achieved several leaps and bounds in the Indian smartphone manufacturing. HiPad Technology also manufactures smartphones and powerbanks for Xiaomi in the Noida plant. There are no plans to work beyond our current partners for now.

What is the response to the Mi Crowdfunding programme?

We introduced crowdfunding in India on earlier last week during our Mi Fan Festival 2018. Mi Crowdfunding platform is particularly meant to introduce new categories in India, and gauge consumer demand. This year, we kickstarted Mi Corwdfunding with two new categories – Mi Audio Bluetooth receiver and Mi Selfie Tripod Stick. Both the products have received phenomenal response.

Mi Mix 2S has better features than Apple’s iPhone X, is what Xiaomi says. How do you plan to overtake iphone buyers’ mindset in India?

Not relevant for India.