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Xiaomi, after losing top spot to Samsung, is revamping India strategy: Key points
Xiaomi's slow shift in India to premium smartphones has helped Samsung steal the crown.
Chinese mobile phone manufacturer, Xiaomi, is revamping its India strategy after allowing Samsung to take the top spot in the country's competitive mobile phone market. Samsung launched more expensive mobile phones and offered innovative financing schemes that Xiaomi failed to match.
Xiaomi has struggled to keep up with the trend of Indian consumers purchasing more expensive models and shifted its focus to budget phones. Data shows that Samsung had a 20% market share for the last quarter of 2022, compared to Xiaomi's 18%.
The loosening of Xiaomi's grip on the Indian smartphone market shows that companies that do not cater to changing consumer preferences in fast-growing economies with rising disposable incomes will be penalised.
According to Counterpoint, the market share of sub-$120 phones in India fell to 26% in 2022 from 41% two years ago. Premium phones, priced above $360, doubled their share to 11% in the same period.
Xiaomi and Samsung both count India as a key growth market, with smartphones being their top-selling electronic device. However, Xiaomi is already facing heat in India due to the departures of at least five senior executives and increased government scrutiny amid frosty relations with neighbouring China.
Xiaomi is revamping its product line-up to focus on premium smartphones, after acknowledging that it had introduced "too many" models in the past. Xiaomi's strategic shift seems to have paid immediate dividends, with the Redmi Note 12 clocking sales of $61 million within two weeks of its launch. Xiaomi has also tapped partnerships to offer loans, calling them a 'Mi Credit' scheme.
Samsung's financing partners have helped generate $1 billion in device sales in India in 2022. The Samsung financing scheme says it offers "convenient and assured" loans, and even those with no loan history, low credit scores or without salary slips can obtain a phone. Samsung required no local address proof, making it easier for migrant workers or those working outside their home state to acquire phones on loans.
The growth in premium segment phones was much higher in small towns than in big cities, Samsung's India mobile unit head Raju Pullan told Reuters in February. Half of the consumers who opted for Samsung's financing scheme were first-time loan seekers. Samsung says its financing app installed on smartphones can lock the device and block outgoing calls for missing loan payments.
(With Reuters inputs)
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Business NewsNewsIndiaXiaomi, after losing top spot to Samsung, is revamping India strategy: Key points
First Published:16 Mar 2023, 08:22 AM IST
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