Xiaomi changes tactics to woo Indian users, moves beyond flash sales

Company says it has got 75% local manufacturing, though much of this is assembly

Hugo Barra is playing the “Make in India” card. The former Google employee, who is currently the global head of Xiaomi, has often spoken about India’s growing importance for the Chinese handset maker. Manufacturing is one aspect.

Hugo Barra, vice-president Xiaomi global talks about the Redmi Note 3 while launching the new phone in New Delhi on Thursday. He said that for doing business in India, it makes sense to assemble in India(Sonu Mehta/Hindustan Times)

“We have gone from zero to 75% local manufactured in six months,” said Barra.

To be sure, this is only local assembly. Barra claims that no other phone maker has done this before.

Xiaomi imports equipment, all custom-made, to assemble phones in India. “It is also the most economically viable approach to do business,” he said.

Xiaomi shot to fame in India, with its flash sale model, by putting a limited number of mobile phones for sale online. They would vanish in seconds. Now, more than half a dozen phone makers do that. And Xiaomi is moving on.

“We use flash sales only when we are launching a model, when we know we have much less (supply) than the demand. Otherwise we practice an open sale, which is more sustainable,” he said. The company will also sell its phones offline.

According to IDC’s smartphone report which takes into account tier-I, II and III cities, Xiaomi ranks seventh in terms of sales in the country. 5.5 million Xiaomi phones were sold in India in 2015. Globally the company sold 70 million handsets.

Barra hopes that 50% of smartphone buying will happen online (it is 30% now), and the company is leaving no stone unturned to get every possible buyer. To start with, Xiaomi is also engaging offline partners to sell its phones. It has set up an R&D centre, has opened a 50,000 square-feet warehouse, 70 service outlets, and will also open smaller warehouses all over the country.

It also started a special accidental and liquid warranty called Mi Protect, which offers free home pickup and drop, and free servicing in the first year of buying a device. The phones also support up to 13 regional languages.

Barra has more to say, now on acquisitions. “We will pick up some stake (that’s what we have done in China). We have looked at quite a few companies, and are in serious discussions with some,” he said. These are Indian companies that have mobile apps and offer services that people can use through a mobile app.

Read: Xiaomi Redmi Note 3 launched in India starting Rs 9,999