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INDIAN CONSUMER ELECTRONICS MARKET
Revenue in the Consumer
Electronics market amounts
to US$89.03 billion in 2021.
The market is expected to
grow annually by 5.76%
(CAGR 2021-2026).
The market's largest segment
is the segment Telephony
with a market volume of
US$54.17 billion in 2021.
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INDIAN CONSUMER ELECTRONICS MARKET
In the Consumer Electronics
market, 15.7% of total revenue
will be generated through
online sales in 2021 and it is
expected to rise to 22.2% by
2025
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INDIAN CONSUMER ELECTRONICS MARKET
In the Consumer Electronics
market, volume is expected to
amount to 937.6m pcs. by 2026. The
Consumer Electronics market is
expected to show a volume growth
of -2.7% in 2022.
The average volume per person in
the Consumer Electronics market is
expected to amount to 0.63 pieces
in 2021.
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Major players in indian consumer electronics market
● Leading
consumer
electronics
company with a
profit of 132 cr
● Focused on
products with
high value
● Partnered with
Amazon to sell a
new series of
phones
● Strong
distribution
network with
300+ outlets and
20000 dealers
● Market leader in
the high end
premium
segment
● Ranked top 5 in
interbrands global
brands
● Have a diversified
portfolio with
products in all
segments
● Provides products
from low end to
premium end
● Focused on the low end
products
● Were able to acquire
huge market shares in
price sensitive countries
India and China
● Were able leverage the
benefit online
distribution to provide
low cost products
6. Chinese manufacturer
Founded in 2010 in China
Smartphone manufacturer
Consumer Electronics Brand with
IOT ecosystem
2018
(Initiated)
74 markets globally
Caters to 300 million consumers
In Just 8 years
4thLargest
Smartphon
e Manufacturer
&
Largest IOT
platform 27% market
share
(Smartphones)
Beijing
MI - Mobile Internet
Mission Impossible to face
challenges
7. Entered 2014
-
Xiaomi
Xiao Small
-
Millet
-
Xiaomi name inspiration is from grain of rice in
Buddhism
Meaning company focused on small things
before they start moving up the ladder.
Established
Indian factory
in Noida
2015
-
Indian Manufacturing helped Lower prices than
imported smartphones giving
Competitive Advantage over importers.
“Make in India” initiative also spurred production
Meaning
8. Xiaomi sold 8 million units of smart phone in Q1 2015
to Q4 2017 while Samsung sold ~ 7.1 million units in this
quarter. So, Xiaomi surpassed the sales of Samsung too.
PRICES
50%
43%
Smartphones
Redmi Note 7 series came up with quality phone at
affordable price with Philosophy of Innovation for
everyone.
Xiaomi Online sales were saturating , growth
opportunities were present in retail market.
Growth of market share of Sales is expected
to increase by 50% in retail sales.
-Manu Kumar Jain, Global Vice
president
9. From 9 months of Mi TV launch in February,
2018, 1 million units have been sold.
Smart TV offline sales 38%
Smart TV online sales 164%
Shipment Threefold
Q2 2018
Xiaomi’s Focus
Focused on cultivating Loyal Fans to
promote among Friends and Family
10. Adopted Disruptive innovation strategy
Being smaller company with few resources challenged established brands
for moving up the market continually
Xiaomi targeted their ignored market segment
apart from Smartphone users like those who
like smart gadgets for lifestyle and utility.
Met demands of consumer at reduced cost
while competing with other brands
Eventually moved upmarket solutions to appeal
consumers in premium segment also
Attracted competitors business mainstream
customers
Disruption
Smartphone Companies market share
IMPACT
STRATEGY IOT devices sold
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With its current brand image, can Xiaomi
Successfully extend its offerings to additional
categories in the future?
12. ● Xiaomi Invested in hundred of startups for new products at
low prices.
Hence they started with Investing, Partnership, Ecosystem :
Being Everywhere strategy.
● Xiaomi involved in design process of entire product line up
but outsourced manufacturing.
● It helped Xiaomi deliver various products at incomparably
low prices in short time period.
● Xiaomi’s Open Innovation strategy aspect
Taking problems outside business boundaries for finding
solutions helped in establishing an ecosystem.
● With its expanding offline channel , it is helping leverage
diversified product portfolio sales.
Xiaomi is on the footsteps
for evolving into ecosystem of
connected products.
13. Xiaomi brand recognition is growing
among consumers as a reliable brand
from Mi TV’s high current demand.
Expansion of specialized manufacturing facility in
India with increased demand of television and
disrupted the Smart TV market by making them
affordable.
High profit margins though it was stagnant in
2017-18 due to offline outlets presence initiation.
Introduction of premium products
such as POCO series with high-price
snapdragon range shifting the brand
perception to quality products also.
Offered smart devices -
refrigerators ,air purifiers,
smart watches connected
to Smartphone
Time for Xiaomi to have
competitive advantage
with introduction of
smart devices.
XIAOMI
Now an independent brand
14. With its current brand image on ATL channel, it has growth
opportunities BTL channel like competitors - Exhibitions,
road shows , live product demonstration in shopping
complexes, digital homes, experiential AV zones for selling
audio devices
Evolving brand image can be leveraged by branding as
Green organization by producing sustainably and
promoting the same message. This will help to set it apart
from competitors. Growing environmental conscious
segments will get attracted to Xiaomi.
WIth increased focused on premiumization of Smartphones,
Xiaomi looks forward to premium smart product categories
in lifestyle, Audio, Surveillance and smart devices category
for sustainability in long run.
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Can Xiaomi repeat the success of becoming a
smartphone leader in India in other electronics
categories by continuing to use an online
distribution strategy and its “marketing without
advertising” approach?
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Online business strategy
Sold through all major ecommerce sites like
flipkart and Amazon along with their own
company site
direct-to-consumer method also allows Xiaomi
to increase profits by avoiding the fees that come
with having retailers sell its products in-store
Xiaomi has created a business model around
selling the majority of its products online through
a method called “Flash Sales”
17. Entered India which is Price sensitive market with
Low price Smartphones
Due to localized
production in
India within
months in 2015
Targeted D2C channel
like Flipkart for selling
with launch of
Mi 3 handset which
increased market base
Ideology of
marketing without
advertising
Mi Online
community
Mi Fan
Forums
Social media
presence
ACTIVE
PARTICIPATION
MARKETING
WITHOUT
ADVERTISING
Through Xiaomi’s
“Honest Pricing”, it
made people
understand Quality
products can be
available for not lot
of money
18. toolkit
Can Xiaomi repeat the
success of becoming a leader
in India in other electronics
categories by continuing to
use an online distribution
strategy and its “marketing
without advertising”
approach?
Currently, Yes!!
In future ‘Offline +
Online’
Poor infrastructure of customer service
High competition in electronics market with each having
wide capital base
Competition sphere has increased due to diversification
of product portfolio
Xiaomi can take leverage of existing offline retail outlets for
expanding electronics segment with experience stores of smart
devices.
Xiaomi should continue expanding its exclusive store count from
3000 currently to at least 6000+ in the next two years
19. toolkit
With its current brand positioning in the
price-sensitive segment, will Xiaomi be able to
sustain itself in the electronics market in the
long run?
20. Brand Positioning: A brand that is ‘close to people’, strives to enable everyone through
innovation in the world to enjoy high-quality products at relatively low price tag.
Current Situation
Brand Positioning Consistency Brand Positioning Performance Brand Positioning Relevance
● Xiaomi BP plan inline with
actual BP in consumers’
mind
● Brings validity that can
help innovate
● Consistency brought
loyalty of customers
● Consumers are willing to
buy Xiaomi products
repeatedly
● Consumers recommend
their good user experience
with others
● Correlation between
Consistency and
Performance
● brand product repurchase
intention,
recommendation
intention etc.
21. ● Internet forum to get feedback from customers at beginning stage development
● Packaging innovation, For Example: 60% decrease in plastic usage for Mi 10T and Mi
10T Pro series packaging
● During 2020, the Xiaomi MIUI Earthquake Alert device detected 29 earthquakes
above magnitude 4.0 using low cost detection
● replicated innovation strategy of essential smart products to occupy 'entry' positions,
such as smartphones and televisions for home screens
● IOT devices cost reduction by outsourcing
● Mi Retail Academy : hands-on training to gain existing retailers
What has been done right recently to strengthen the Brand sustainability?
Process Innovation
Product Innovation
● “Mi home” app on
the smartphone
controls 85% of
the smart home
products
Products Xiaomi Price Range Samsung Oneplus Vivo
Mobile
Phones
6,999/- to 36,999/- 4,999/- to 1,73,999/- 24,999/- to 59,999/- 6,540/- to 79,990/-
TV 14,999/- to 1,27,999/- 18,000/- to
14,99,990/-
16,999/- to 84,999/- NA
Smart
Watches
3,999/- to 9,999/- 7,999/- to 39,999/- 14,000/- NA
● Devices upto 84% screen to body ratio yet tougher and waterproof
24. Sustainability Challenges to Xiaomi
Products Price Range
Air Purifier 2,199/- to 9,999/-
Water
Purifier
999/- to 10,999/-
Audio
Devices
379/- to 4,999/-
Products Price Range
Smart IOT (
Mop, bulbs
599/- to 19,999/-
Security
Cameras,
Routers
14,999/- to 1,27,999/-
Shoes,
backpacks
1,999/- to 3,999/-
Product Innovation width
● A good part of new buyers see few Chinese brands in one
basket
● Lack of Patent Reserves and Standard Essential Patent (SEP)
with ~7100 patents compared to Huawei with ~77000
patents hindering process and product innovation
aspirations
● Xiaomi Brand awareness limited to mobile phones but not
IOT devices
● Quality Problems and After-Sales Service Problems, In
Xiaomi phone forums have up to 6,000 kinds of problems
of Xiaomi phone
● Major problems include paint loss, short standby time and
pictures quality affecting credibility of brand
● Lesser Overseas strategy for various models
25. Process Innovation
Product Innovation
Delivery method
● Expand from E–commerce to Retail
● Proximity of service centres near new buyers
● Upgrade Xiaomi hotline service for <2 min avg waiting time
● Upskill service centre employees to communicate in local
language
● Rigorous R&D for long term market share
● Strong augmented MI UI for in-house low cost
refurbishment
● A blazing speed, and numerous extra features is the key to
differentiating from chinese counterparts
● Extensive IOT features to create ecosystem for most device
solutions for MI users
● Leverage User’s high affordability of internet in devices
14.6 GB per month avg
consumption by
Indians - 2nd highest
Innovation Recommendation for Sustainability to remain cost Leader in Higher price segment
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What challenges will Xiaomi face
as it pursues disruption in the
television and electronics market
in India?
27. Challenges for Xiaomi
Taxation costs: Huge taxes levied on import of
electronic components like chipsets & sensors by
Government of India for television sets
Lack of home grown manufacturing plants for
sensors & chipsets: Additional operating costs for
setting up manufacturing plants in the country
Inadequate After-sales Service: Hotline
mostly engaged in addition to the
inefficient online and MIUI community
customer service
28. Intensified Market Competition
Market Share in
Q3 of 2021:
Xiaomi: 22%
Samsung: 19%
Competition sphere has increased due to
diversification of product portfolio
High competition in electronics market with
each having wide capital base
29. Challenges for Xiaomi
Souring of Indo-China
Relationship: Xiaomi, being
essentially a Chinese
manufacturer, has failed to
shed its Chinese stigma,
especially after the IT
department has permanently
banned the usage of 59
Chinese apps in India.
Lack of Patent Reserves and Standard Essential Patent (SEP):
2014: Ericsson sued Xiaomi in the Delhi High Court,
claiming its phones infringed on Ericsson's wireless
technology
2020: Philips alleged that several Xiaomi smartphones
made use of its patented Universal Mobile
Telecommunications Service (UMTS) enhancement
technologies including HSPA, HSPA+ and LTE.
30. Challenges in Premium Segment
• Venturing into new markets: Failure to
make a mark in the flagship segment
because of the brand’s perception of
cost-centric smartphone manufacturer
• Robust hardware but inconsistent MIUI
software: Scaling issues in notifications in
MI 11 Ultra priced at Rs.69,999
• Lagged updates and support for premium
flagship phones
Product Price
Mi Mix 11x Rs.29,999
Mi Mix 11x Pro Rs.39,999
Mi Mix 11x Ultra Rs.69,999
Apple 4-5 Years
Samsung 3 Years
Xiaomi 2 Years
31. Recommendations
❑ Localize Xiaomi’s core competencies in India by creating an Indian customized
version of operating system
❑ More emphasis on technological innovation and increase investment in
research and development
❑ Solve patent issues by focusing more on independent innovation
❑ Set up direct phone hotline services, customer sales service points, Xiaomi
Home in Tier 1 and 2 cities to improve after-sales service.
❑ Corporate with local retail outlets in small cities to service rural customers
❑ Focus on staff training and set up a range of KPIs to ensure quality of service
❑ Create a robust ecosystem of interconnected devices to captivate the
consumers from switching to other competitors
❑ Ramp up its portfolio in Smart Home-Tech appliances before its competitors
can level up
32. toolkit
Being positioned in the price-sensitive segment,
will Xiaomi be able to make up-market product
line extensions in the future?
33. toolkit
Workshop # 1
Current Product line extensions
Workshop # 2
Smartphones
Redmi
● entry-level Redmi
● mid-range Redmi
Note
● the high-end
Redmi K
Poco: Higher-priced
Snapdragon product
range (now an
independent brand)
MI : Mid range and
upwards
● Smart TVs
● Laptops
● TV and Phone Accessories
● Power Banks
● Audio : Earphones, and
Speakers
● Smart Wearables
● Backpacks and Shoes
● Home: Security cameras,
smart sensors, smart
bulbs, WIFI Routers and
smart air and water
purifiers
Power Packed
products
34. toolkit
Xiaomi’s Blended Business Model
Configured investments to incentivize
innovation and build trust.
Focus on ROI more than margins
Multiple hardware and software ventures
connected to Xiaomi’s platform
Actively enforces consistent
branding and quality standards
across its entire product portfolio
IOT
SmartPhones
Stepwise expansion and Integration with
IoT-connected consumer electronics
Direct Online sales (Flash sales)
and 3000+ MI stores
Unique User Experience, Rich
Technology, Latest Features
Loyal Consumers Fans: Effectively
used social media, Mi online
community, and various Mi fan
forums
Honest Pricing
Robust Risk Management System
35. Road Ahead : Up-Market Product line extensions
Challenges
➢ Existing Consumer mindset of
affordable and Price-sensitive
Brand
➢ Strong Competition from Apple,
OnePlus and Samsung in the
Smartphone segment
➢ Strong Competition from Sony,
Samsung, and LG in TV and other
electronics
➢ Lack of unique premium product
features
➢ Xiaomi saturated the online
segment with 50% Market share
➢ Only 18-20% share in the offline
Opportunities
➢ Rising interest of Indian Middle class segment
in premium electronics
➢ The demand for electronic products will rise
to US$ 400 billion by 2025 from US $ 33
billion in FY20
➢ Biggest Internet of Things platform in the
world and a powerful blended business model
➢ Room to grow in retail with just a 20 percent
share in 2019
➢ Availability of financial programmes like EMIs
and increasing penetration of e-commerce
hiked growth
➢ Nearly 2.5 times cheaper than the most
expensive smart TV in play(Samsung)
36. Road Ahead : Up-Market Product line extensions
Steps Taken
➢ Frequency of Product launch into
premium has increased from 1 product
a year to 5 ( Mi 11 Ultra, Redmi K)
➢ Building two-way complementarity
between core and partner businesses
➢ Replacing the popular Mi moniker
with Xiaomi
➢ Xiaomi to invest Rs 100 crore in
expanding its offline retail presence
for deeper reach in tier-2 and tier-3
cities, towns and rural India over the
next two years.
➢ Aiming to double its exclusive store
count from 3000 currently to 6000+
➢ 3000 exclusive Mi stores, 75 Mi Homes
and 10,000 retail points in its offline
network
Recommendations
➢ Utilising the Unified Xiaomi for
Up-market product extension
➢ Creating strong research &
development for unconventional high
end features
➢ Word of Mouth promotional strategy with
the help of massive loyal fan base
➢ Three factors to focus for premium range
❏ Great specs and premium design
❏ Cutting-edge technology
❏ Consumer experience that is free of ads
and recommendations
➢ Not sticking to just one formula or dated
tech
➢ Maintain a 50:50 ratio of sales across
offline and online retail channels
37. toolkit
“Being a leading technology brand with a strong presence
across the globe, our aim is to have a unified presence. With
the new logo shift, we envision bridging the perception
gap between our brand and products.”
- Jaskaran Singh Kapany, CMO, Xiaomi India
Thank You!
