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Xiaomi sees Indian demand for its smartphones eventually equalling that of its home market China, where the company shipped 15 million devices last quarter to outpace Samsung Electronics Co and Apple Inc.
"It is the biggest market for us beyond China, it will someday be as big as China," Xiaomi Vice-President Hugo Barra said in a phone interview on Wednesday from Bangalore. "We are coming into India with full force." The push is part of Xiaomi Chief Executive Lei Jun's plan to boost his global smartphone sales fivefold to 100 million next year. Xiaomi, which recently started a foreign effort targeting Chinese diaspora, teamed with Indian e-commerce site Flipkart.com to sell its Mi3 phone last month for Rs 13,999 ($228).
Beijing-based Xiaomi has offered 35,000 phones in three online sales in India, and these sold out within minutes. Barra, who moved to the southern city of Bangalore to head Xiaomi's efforts, said the company had underestimated demand and would boost supply.
"We have to ramp up," Barra said. "It's not something we can do immediately because we are subject to manufacturing constraints." Barra declined to say how much the company was investing in India.
Four-year Xiaomi is entering a market where South Korea's Samsung and local makers Micromax Informatics and Karbonn Mobiles India account for 60 per cent of sales, wireless carriers don't subsidise the costs of devices, and the pool of Chinese speakers familiar with its products is smaller.
Sales in India have been driven by word-of-mouth, and Xiaomi underestimated interest in its products when it analyzed social media to gauge demand, Barra said. More than 200,000 people registered to participate in online sales events, he said.
Xiaomi is beginning sales in 10 new markets including Brazil and Russia. While the company started its own websites in Singapore and Taiwan, India has proved more difficult because its infrastructure for delivering packages and collecting payments is underdeveloped.
Vendors shipped about 13.5 million smartphones in India during the first quarter, compared with about 97 million in China, according to researcher Canalys.
Boosting Investment
Xiaomi has generated sales in China by offering cheaper devices packed with high-end features. The Mi3 smartphone, which sells for less than a third the cost of an iPhone 5s, sports a full high-definition screen, 13-megapixel camera and Qualcomm Inc. Snapdragon processor.
The company toppled Samsung last quarter to become the largest smartphone seller in China, according to Canalys, and it now is the sixth-largest smartphone manufacturer globally, according to researcher IDC.
Barra joined Xiaomi last year from Google Inc., where he was a vice president helping oversee product management for its Android operating system. He was a public face for some of Google's key efforts around Android, which runs Xiaomi phones.
Xiaomi plans to boost staff in India to about 20 people by the end of the year, including workers to run two service centers. The company will contract with other companies for 34 additional service centers and will hire software developers to build applications focused on Indian users.
"The products we make for India, they are unique," Barra said. "It's unique packaging, unique labels, the software on the device that we sell in India is unique."
