» Business » Amid boycott call, Xiaomi sells 1 million phones in 18 days

Amid boycott call, Xiaomi sells 1 million phones in 18 days

By KJM Verma
October 20, 2016 12:45 IST
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Chinese cellphone maker Xiaomi has sold a record one million smartphones in India in 18 days during the Diwali festive season, despite boycott calls of Chinese goods in the country, state media reported on Thursday.

The Beijing-based company now aims at becoming largest smartphone vendor in India, the world's fastest growing handset market, in the next three to five years, said Lei Jun, founder and CEO of Xiaomi.

Lei, in an internal letter on Wednesday, announced that the company has sold one million smartphones in the first 18 days of this month in India, state-run China Daily reported. 

“India is an extremely important market in Xiaomi’s globalisation strategy. It has become our largest market outside of the Chinese mainland,” Lei said.

The announcement comes after its arch-rival Huawei Technologies Company Limited said it would start assembling phones in India from October.

The move highlights Xiaomi’s latest efforts to revive declining sales as the Chinese smartphone market, its home turf, is reaching saturation, the report said.

It came in the midst of anxieties among Chinese investors over growing calls for boycott of Chinese goods in India following China's blocking of India’s move to ban JeM chief Masood Azhar at the UN and blocking India's bid to become the member of the Nuclear Suppliers Group.

According to Lei, as of Tuesday, the firm has sold one million smartphones within 18 days in October in the run-up to Diwali, the biggest festival in India.

In September, Xiaomi became the third-largest smartphone vendor within India's top 30 cities with 8.4 per cent market share, the firm quoted data from International Data Corporation as saying.

“We will continue investing in India-expanding our supply, and further improving our after-sales service,” Lei said.

Launched in 2010, Xiaomi achieved a rapid rise by seizing the e-commerce boom in China to sell handsets directly to consumers. But as online sales of smartphones peak, it is struggling with declining sales and facing mounting pressure from rivals such as Oppo and Vivo, the report said.

IDC China research manager Jin Di said it is hard to say whether Xiaomi can prevail in the Indian market, given the growing competition from both its Chinese peers and Indian vendors.

“Almost every major Chinese smartphone brand is eyeing a presence in India. I do not think Xiaomi has a big edge, especially when India’s e-commerce business, which Xiaomi is most good at, is not as well-developed as that of China,” Jin was quoted as saying by the report.

Also, it will take time for Chinese brands to properly localise their operations, given the different business environments and polices in India and China, she added.

In the second quarter of 2016, smartphone shipments in India grew by a healthy 15 per cent annually, while the global smartphone market grew at a modest three per cent.

Chinese brands’ captured almost 27 per cent of the Indian market, data from Counterpoint Research show.

Xiaomi’s arch rival Huawei said on Tuesday it would start manufacturing its first smartphone model in India in October by partnering with a local factory whose annual production capacity will reach three million units by the end of 2017.

Zhao Ming, in charge of smartphone business at Honor, the sub-brand of Huawei said, “The India smartphone market is likely to exceed 100 million units this year. It is a market no one can neglect. We have long-term commitment to it.”

Image: Lei Jun (left), founder and chief executive officer of Xiaomi, and Hugo Barra, Xiaomi's vice president of international operations, display Mi 4i phones during its launch in New Delhi in May 2015. Photograph: Anindito Mukherjee/Reuters.

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