New Delhi: Xiaomi India expects to bounce back to its leadership position on the back of a leaner, more streamlined portfolio, and a stronger focus on the entry-level segment where it still commands majority share.
However, market trackers say the key to Xiaomi India’s bounce back will be in efficient channel management, affordability-driven financing schemes and ironing out of operational issues.
Market tracker Canalys recently reported that Xiaomi had slipped to the third position in India in the fourth quarter of 2022 in shipment terms.
“Financing will be the name of the game going forward. Brands inked the affordability deals with financiers for higher-end models last year. They will have to do the same for the budget smartphones this year to generate demand,” said Prachir Singh, senior analyst at Counterpoint Research.
Xiaomi India plans to launch fewer models this year as compared to 2022. “As we start the new year, we have a cleaner portfolio and are focused on winning the love and trust of the Indian consumer,” a Xiaomi India spokesperson told ET.
“They have a problem with the portfolio. They are launching anything, anywhere. The consumers, because they are confused by the portfolio, are migrating to rival brands,” said Navkendar Singh, associate vice-president, IDC India.
At the launch event presentation, Xiaomi India president Muralikrishnan B highlighted where each line up of smartphones will slot in, adding that they have even done away with a few line ups to create a leaner portfolio for 2023.
The company also plans to double down on the entry-level segment, where it still commands 50-55% market share, said an industry executive who wished not to be named.
The development comes after the company saw its market share decline over the past four quarters in India, due to challenges in generating demand in the entry-level segment, which is where the majority of Xiaomi devices get sold.
Xiaomi India’s market share slipped to 17% in Q4 2022, from 21% in Q1 2022, as per Canalys.
Xiaomi India suffered a loss in momentum in 2021 due to the chip shortage, which hurt the company more than others as it refused to move away using chips from MediaTek and Qualcomm, both of which faced a supply crunch when the pandemic was at its peak, the executive added.
“The online sales during the festive season did not do well. For brands who are very high on inventory for their online channels, the sales did not meet expectations, especially in Q4 after the Diwali sales were over,” said Sanyam Chaurasia, analyst at Canalys.
“As a result, online channels did not take in more inventory from the brand, leading to low sell-ins during the fourth quarter,” he added.
This inventory mismatch was capitalised by the likes of Samsung and Vivo who had a strong offline presence, and leveraged their omni channel partners to sell more devices. Canalys reported that in Q4, Samsung climbed to the top with 21% market share while Vivo had 20% share.
Additionally, in the premium segment, Xiaomi’s push for high-end devices was challenged by Apple’s aggressive price cut of iPhones, during the festive quarter, which further hurt its sales at a time when the market itself climbed up the price ladder, pushing up the average selling prices, Canalys’ Chaurasia said. The iPhone 13 was the highest selling smartphone model in Q3, as per Counterpoint Research.
Canalys research shows that India’s smartphone shipments fell to 151.6 million units in 2022, declining by 6% compared with 2021. 2022 began with intermittent supply issues and low demand caused by global macroeconomic headwinds. India’s smartphone market suffered its first-ever drop in shipments in the fourth-quarter holiday period, falling by 27% to 32.4 million.
“2022 has been a challenging year in more ways than one, but with our strong brand, channel relationships and consumer love, we have a strong foundation,” the Xiaomi India spokesperson quoted above said.
IDC’s Singh, however, downplayed the decline in shipments stating that Xiaomi focused on liquidating its existing shipments in the channel in the fourth quarter, and did not bring in more, which resulted in lower shipment numbers in Q4.
