In a grim year, Xiaomi’s India sales numbers offer hope

Photo credit: @XiaomiIndia

This has not been a great year for Xiaomi’s smartphone sales. The numbers coming out of the company’s China business have been grim, and the upcoming US launch isn’t likely to patch over the massive hole in Xiaomi’s domestic shipment volumes.

But a new hope has emerged for the Chinese company: India.

Xiaomi’s India head Manu Kumar Jain posted on Facebook yesterday that thanks to holiday sales and marketing, Xiaomi sold 500,000 phones in India over the first three days of October. He also shared this graphic:

“More than six months of rigorous planning and hard work has helped us set a new benchmark in the industry,” his post reads. “Last year we sold more than half a million phones in 30 days during the month of October, and this year we were able to achieve a similar number within 3 days.”

Of course, 500,000 phones isn’t nearly enough to make up for the hole in Xiaomi’s China books, where phone shipments dropped by nearly seven million year-on-year in Q2. But increasing traction in India bodes well for Xiaomi, for several reasons.

First, India’s smartphone market is still young. Growth may have slowed somewhat over the past year, but with a smartphone penetration rate of less than 30 percent, India’s smartphone market can really only grow. With its US expansion, Xiaomi is a no-name brand that’s trying to push its way into a market that’s already over-saturated. That’s unlikely to work. But in India, the market is still wide open and there’s plenty of room for Xiaomi to build its brand as more and more people adopt smartphones for the first time.

India’s smartphone market right now probably looks familiar to Xiaomi

Second, India – again unlike the US – is a good market for budget phones. Manu’s Facebook post shows that Xiaomi’s best-selling models were its lower-cost Redmi phones, and that’s a trend that’s likely to continue. In China, Xiaomi is showing that it’s having trouble attracting customers over higher-end handsets like Apple and Huawei flagships. But in India, it doesn’t face the same sort of challenge. There is a large and growing market for low-cost handsets that Xiaomi’s existing offerings fit into quite nicely.

Finally, it’s worth pointing out that India’s smartphone market right now probably looks familiar to Xiaomi. It may seem hard to believe now, but back in late 2011 when Xiaomi was launching its first phone, China’s smartphone penetration rate was also below 30 percent, and the market for lower-cost handsets was stronger than it is today. Of course, there are many differences between China then and India now, but in broad strokes the markets are similar enough that Xiaomi may find things that worked for it in China will also work for it in India. Xiaomi was still China’s top dog not long ago, so it’s clear that the company’s early moves in the Chinese market worked wonders; if it can repeat those strategies to similar effect in India, it could stand to gain a huge chunk of the Indian market in the long run.

The proof will be in the doing, of course, and Xiaomi India has a long way to go before it can claim the kind of local dominance the brand once had in China. But selling 500,000 units in just three days is a good start, and a start that’s reminiscent of Xiaomi’s early burst sales strategy in China. If it can continue the trend, perhaps it can turn India into the stronghold that it once had but has recently lost in China.

This post In a grim year, Xiaomi’s India sales numbers offer hope appeared first on Tech in Asia.

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