Xiaomi, A Company That May Lead Indian Users’ Mind Share Going Forward
Mobile companies are dime-a-dozen these days. The market is at its peak and as with every industry that has sublimed everyone wants a piece of the action. This is one industry that has grown almost simultaneously in the whole world.
The way has been different according to the area or country obviously. For example, while Apple has captured the heart of people of USA and maybe some countries in Europe, the low-cost Android phones have ruled the roost in rest of the world.
Then of course, there are companies like Samsung and Sony who have raised the bar for high end Android phones as well. At this point of time, no one can outright claim which phone is better- Samsung Galaxy S4 or iPhone 5S.
However, in China, all these questions are being answered by a completely different company- Xiaomi. Let’s start with the pronunciation of the name first- According to Hugo Barra- “Think of ‘show me,’ and then pronounce the first word as if it was ‘shower’.”
Oh yes! And did I mention that former VP of Google Hugo Barra is now part of Xiaomi now. He is heading the Global Expansion for Xiaomi.
This means serious business and shows the commitment on part of the company. The company, which is called Apple of the East, is known for producing high quality phones at a cheap price.
The key word here is high quality.
This is what differentiates Xiaomi from other (Chinese) companies that are selling cheap phones out there. The company has garnered respect by actually producing phones of similar quality as the Galaxy S series of Samsung while keeping the price to half of what is sold by Samsung. There is no wonder that the Chinese market loves it.
Now Hugo Barra believes that countries that are similar to Chinese markets (i.e. price sensitive) are the sweet spot for the company.
According to him– “I think that’s the sweet spot for Xiaomi — places like India, Russia, Indonesia, Latin America, Thailand. It’s where the equation of quality and affordability works, because it’s in those markets you can replicate what the company has done in China.”
It would indeed be incredible to see great quality phones in the mid-price range. There will be hurdles though for the company. Xiaomi is so predominantly based in China that they will have a hard time adjusting to the different markets. Of course, people like Barra will contribute to help the company out but there is one catch in the company’s Chinese success.
Google services are blocked in China!
This means that Xiaomi has been the content provider for the people as well as the phone manufacturer. This helped them follow a more Amazon-like model where the phones were sold at their cost price (without much profit margin) and then the content was used to make profits.
This would not work in countries where Google Play is active and running. Unless Xiaomi doesn’t add Google Play at all. In which case, they would have to ensure that apps that are predominately used by Indians are present in their Appstore. Also, there is the case of side-loading the apps that will cause a loss of revenue for the company.
If these things force the company to increase the profit margins for their phones then they would just become one of the players in the market and lose their single biggest advantage. Now, it’s up to Hugo Barra to find a niche for which the company can provide incentive to us Indians to cough up money.
What do you think? Does Xiaomi have the capability to replicate its success in India?