Xiaomi India, which offers smartphones across nearly all price segments, is now reportedly shifting its focus to the mid-to-premium segment (over Rs 20,000) to drive sales and boost profits. It aims to streamline its product portfolio. The company outlined this strategic shift in a recent interview, wherein it also talks about local manufacturing in India. Take a look:
Xiaomi’s premium market push in India
In an interview with Mint, Xiaomi India COO Sudhin Mathur said, “We have had the number one position. But in businesses, numbers are not as important as revenue and profitability”. Xiaomi held this top position in India for about five years between 2017 and 2022. But, back then, it drove most of its sales from the budget segment.
Of late, the market dynamics have changed, and Xiaomi has been facing stiff competition in this affordable space.
Xiaomi has gone through something similar in China, and it managed to improve its retail image there.
However, in India, as Tarun Pathak from Counterpoint says, Xiaomi has competition in the premium segment too.
The analyst points out that Xiaomi India will have to emphasise the offline retail point of sales and their brand messaging to target the premium segment in our country.
Despite this strategic shift, Mr Mathur clarifies that Xiaomi will maintain offerings starting at Rs 6,500. What’s different, however, is that the company is streamlining for a more efficient and impact product portfolio. It has already cut from 28 products in the budget segment in 2022 to 10 models now.
Mr Mathur also touched upon Xiaomi being committed to local manufacturing in India:
Local manufacturing and cost reduction
He said, “As we continue to launch new products, we will try and ensure that they are locally produced”. This local output will be meant for domestic demand only and won’t be exported.
Xiaomi is also evaluating its options and opportunities with respect to the new Electronics Component Manufacturing Scheme. The company claims 35 percent of the non-PCB (printed circuit board) bill of material, including cables, chargers, plastics, etc., is locally sourced.
He adds, the pricing benefit with localisation will be passed off to the end customer.
Let’s see. Keep reading for similar stories.
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