Xiaomi Beats Samsung to Become Top Smartphone Vendor In India

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Chinese smartphone maker Xiaomi Inc. surpassed South Korea’s Samsung Group as the top seller of smartphones in India for the first time in the fourth quarter of 2017.

During the period, Xiaomi shipped close to 8.2 million units in India, up 170% year-on-year, while Samsung shipped just over 7.3 million units, up 17% year-on-year. Samsung had been the top seller in India for six years.

Together, the two companies command more than 50% of the smartphone market in the country, with Xiaomi accounting for 27% and Samsung accounting for 25%, according to research firm Canalys.

“Xiaomi’s persistence has paid off,” wrote Ishan Dutt, Canalys research analyst. “Its results are commendable, given it entered the market just three years ago."

The top five vendors in the market last year also included China’s Vivo, OPPO Electronics Corp. and Lenovo Group, holding market shares of 7.8%, 7.1% and 6.9%, respectively.

"Multiple factors contributed to Xiaomi’s growth, but the key reason for its current success lies in the autonomy that it granted its Indian unit, letting it run the business locally," wrote Dutt. "Localization in channel strategy, marketing and products has been evident in Xiaomi’s Indian operations.”

Xiaomi made an a aggressive push into India last year, with its market share increasing from 14% in Q1 to 27% in Q4. Last May, Xiaomi opened its first Indian Mi Store, an Apple store-style sales and experience center, and currently operates 17 such stores.

While Xiaomi’s success in India will have far-reaching implications for its worldwide strategy, the company should not expect growth to continue at the same pace, Canalys predicted.

“But growth in 2018 will be hard to come by,” said Canalys analyst Rushabh Doshi. “As Xiaomi’s market share reaches saturation point in India, and the market continues to shrink in China, it must contend with slower growth for its smartphone business as it begins to expand in other countries.”

In November, Xiaomi Inc. said that over the next five years it will invest as much as US$1 billion in 100 Indian start-ups with Shunwei Capital, a venture capital firm founded by Xiaomi’s founder Lei Jun. At that time, Lei told Indian media that the duo will focus on the fields of content, financial technology, hyperlocal services, including mobile phone repairs and manufacturing, to differentiate its offering from rivals like Samsung, Vivo and OPPO.

Currently, the company’s portfolio in the country includes micro-lending platform KrazyBee, social networking app Sharechat and digital media start-up Hungama Digital Media Entertainment.

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