Xiaomi forays into television market, brings China model to India

Smartphone market leader Xiaomi on Wednesday ventured into the television category in India. 

Xiaomi has stuck to a single model - Mi LED Smart TV 4. The product has advanced technology and, as claimed, is the thinnest in the world. “We are offering a TV that costs over Rs 150,000. So we must have a plan for now,” Manu Kumar Jain, vice-president and managing director, Xiaomi India, said. The company has priced the 55-inch TV that comes with 4K technology at Rs 39,999. To keep costs in check, Xiaomi is banking on online stores such as Flipkart, Mi.com, and its offline branded outlet - Mi Home.

Unlike in 2014 when it entered India, the latest move could be Xiaomi's first concrete step to bring its core business model here. It will attempt to replicate the China model by monetising content delivery. This will help the company offer the hardware at a more competitive price. Jain calls this strategy - “content first”.

“Our strategy is simple - to offer the largest content library to consumers on an integrated content interface that combines linear TV and internet content together. We have the biggest content library in China and in India we are starting with 500,000 hours of content,” Jain said. 

In line with its China model of revenue generation, Xiaomi has tied up with 15 content providers across 12 regional languages. Hotstar, Voot, Sony, and Balaji are on board, but the firm is working to add Amazon and Netflix.

What Xiaomi is attempting is unprecedented as seamless integration of the two different platforms, backed by artificial intelligence, has never been attempted in India, added Jain.

Xiaomi's decision to enter the television (TV) business is believed to be an attempt to leverage its larger portfolio. In China, products like purifiers, smart kitchen appliances and electric bikes add to its top line. Xiaomi also produces motion picture but that is still some time away in India.

However, there are roadblocks ahead. Customs duty on import of electronics such as flat panels and smartphones have been raised steeply. Xiaomi is aware of this development. Jain said it was open to sourcing locally provided sales grow beyond a threshold.  According to Tarun Pathak, associate director, Counterpoint Research, generating revenue from third party providers is dependent on a brand's install base. Initially, it would be low for a new entrant into the market.