Xiaomi has become a household name, much like Samsung, Motorola, and Vivo. Since the debut of the Redmi brand in the country, Xiaomi has been a dominant force in the budget smartphone segment. Now, however, the company is recalibrating its approach to align with changing market dynamics. While its market share has seen a decline, consumer interest remains strong, and Xiaomi is now setting its sights on the mid-to-premium segment to drive growth and profitability.
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Consumer interest amidst declining market share
Both Counterpoint Research’s recent market share data for Q1 2025 and our own Smartphone Buyer Insights Survey for May 2025 reveal Xiaomi’s decline in market share. Counterpoint reports a drop in share to 13 percent in Q1 2025 from 19 percent in Q1 2024, due to sluggish demand and higher inventory levels. The latest IDC report on the Indian smartphone market also revealed that Xiaomi saw a sharp decline in market share with a drop of 42 percent year-on-year, behind OnePlus which saw a drop of 55.7 percent.
Our latest Smartphone Buyer Insights Survey 2025 also reflect this in terms of current smartphone ownership. Xiaomi’s ownership share has seen a marginal drop from 13.5 percent to 11.5 percent.
This consistent online interest shows Xiaomi’s enduring brand appeal and the trust it has cultivated among budget-conscious consumers.
Strategic pivot to the mid-to-premium segment
Recognising the need to diversify and enhance profitability, Xiaomi is shifting focus towards the mid-to-premium smartphone market, targeting devices priced above Rs 20,000. Sudhin Mathur, Xiaomi India’s COO, emphasised this transition, stating, “We have had the number one position. But in businesses, numbers are not as important as revenue and profitability.”
In a statement to 91mobiles, Mathur said, “At Xiaomi India, we view short-term shifts as a natural part of the ever-evolving and competitive smartphone market. As part of our premiumisation journey over the past two years, we’ve consciously decluttered our portfolio – moving away from frequent, incremental launches to a focused line-up of high-impact, hero products. Our focus has shifted from volume-led growth to value, while prioritising long-term brand equity and user satisfaction. We are on track and ahead of internal targets. Given the changing market landscape, our success metrics have also evolved to emphasize brand saliency, profitability, and sustainable value creation.”
So, the company has made it clear that it is no longer chasing the number one spot in the market. Instead, it is focusing on profitability – because in a market as competitive as India, being number one and being profitable rarely go hand in hand. This strategic shift involves streamlining its product portfolio by reducing the number of budget models from 28 in 2022 to just 10, and concentrating efforts on higher-end devices that offer better margins and align with evolving consumer preferences.
Popularity of Redmi Note 14 Pro+ indicates Xiaomi’s popularity in the premium segment
Both the Redmi Note Pro 14 Pro+ and Xiaomi 15 rank in the devices between Rs 30,000 to Rs 50,000 and Rs 50,000 to Rs 1 lakh segment, respectively, signalling the consumer interest for the brand’s premium offerings too.
To support its premium push, Xiaomi is enhancing local manufacturing capabilities in India. By sourcing approximately 35 percent of non-PCB components domestically, the company aims to reduce costs and pass on the benefits to consumers. This localisation strategy not only aligns with government initiatives but also enables Xiaomi to price its premium devices competitively.
Conclusion
While there’s no denying that Xiaomi has lost market share in India due to several factors, such as low demand, elevated inventory, and rising competition from brands like Samsung, Vivo, and Motorola, the Chinese smartphone brand remains popular among buyers. Its Redmi phones still rank among the top five in terms of user searches on 91mobiles.
Only time will tell whether the brand’s strategic shift toward the mid-to-premium segment will pay off. The fact that a Rs 30,000 Redmi Note 14 Pro+ ranks high in our user searches suggests Xiaomi is on the right track. That said, brands like Motorola have made a strong comeback in this very segment, which could pose a significant challenge.
