In the battle for the top spot in the world’s fastest-growing smartphone market, Xiaomi continues to stay undisputed. The Chinese maker is said to have beaten the sales effort of every other OEM, yet again, in the first quarter of 2018 in India, according to Canalys report. The Chinese vendor registered an annual shipment growth of 155%. Xiaomi shipped over 9 million handsets in Q1 2018, giving it a market share of 31%. The Korean maker Samsung failed second-time to regain its lost crown in India and could manage to ship under 7.5 million units with a market share of 25%. India’s overall smartphone market grew at 8%, up from 6% in Q4 2017, to 29.5 million units in the last quarter.
Xiaomi is not an underdog anymore, neither locally nor globally. In October last year, the Chinese OEM crossed the mark of 100 billion RMB (US$ 15.8 billion) in revenues – a milestone that Apple took 20 years to exceed, Alibaba, 17 years, and Facebook, 12 years.
The Chinese giant is working upon for greater longevity in the market. It has started launching electronics other than smartphones in the country. Xiaomi’s low-cost Mi TV has disrupted the television market which is dominated by big shots like Sony, LG and Samsung. Xiaomi is known for delivering value for money products. Recently launched Redmi 5A, priced around INR 6300, reached a record sales of 3.5 million units in this quarter. In contrast, Samsung’s best-selling handset, J7 Nxt, shipped only 1.5 million units.
The growing prominence of Xiaomi has made it a force to be reckoned with in the Indian market. The company’s dominance has given a shakedown to other brands, especially Samsung. Where heavyweights like Apple and Samsung are busy in innovating the next best tech and launching expensive flagship devices, Xiaomi steals the show with its cheap mid-rangers. After Samsung, the third spot is taken by Oppo with 2.8 million shipments, followed by Vivo with 2.1 million shipments in Q1 2018. Pressure on smaller vendors like Lenovo and Gionee has mounted fast and they are forced to rethink their strategy in accordance with the Indian market. Lenovo smartphone shipments have fallen more than 60% YoY and managed to ship less than a million units, while Gionee smartphone shipments are down 90% YoY with an all-time low of 150,000 units shipped.
A just about 7-year-old company, Xiaomi, landed in India in 2014 and started its journey exclusively through online retail. The company became the top-ranked smartphone company in the country in just three years. In Q4 2017, the Chinese maker recorded astonishing growth grabbing a market share of 27%, thereby defeating the world’s second-largest smartphone maker Samsung which could acquire 25% market share. In addition, the Chinese manufacturer shipped 8.2 Million units in Q4 2017 and Samsung shipped just over 7.3 million units. While Samsung’s shipment market share fell down marginally from 25% in CY2016 to 24% in CY2017, Xiaomi’s shipment market share soared from 6% to a remarkable 19% in the same period, according to the data from Counterpoint Research.
Smartphone Market India: Double by 2020
Indian smartphone market holds a vital importance for smartphone companies as it is expected to become double in size by the year 2020. From 2013 to 2016, the smartphones have tripled in the country and continue to increase rapidly. Indian smartphone market grew 14% in 2017 and about 124 million units were shipped, says IDC.
Xiaomi made its debut in the Indian market with an exclusive partnership with e-tailer Flipkart. The Mi 3 and Redmi 1S were its first devices to be launched in the country. In September 2014, around 40,000 units of Redmi 1S were sold out in just 4.2 seconds in a flash sale. While other brands were juggling between online and offline sales, Xiaomi stayed unshakable. Online smartphone sales grew 23% in India in CY2017.
Despite the overall smartphone market in India remained flat YoY in Q1 2018, the online smartphone segment grew by a significant 4% YoY. Interestingly, Xiaomi Redmi series smartphones dominated the list of top 5 best-selling smartphones sold through online channels in India in Q1 2018.
But eventually, the company had to crack the offline channel for sustainable growth. In 2017, Xiaomi started expanding offline by involving large format retailers, Mi preferred partner stores, and through Mi Home Store. Since then, there has been no turning back for Xiaomi.
It looks like Xiaomi will continue to make such great strides in the Indian market and its dominance is a result of strong supply chain and its ability to offer better specs and technology at reasonable prices in one of the most price sensitive markets. The masses in India are still unable to move quickly to a high-value market which has given an added advantage to Xiaomi.