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Tue, Jul 15 2014. 09 31 PM IST

In India, Xiaomi is selling its products via ecommerce

company Flipkart. Photo: Bloomberg

Xiaomi launches budget smartphones, seeks to build IndiapresenceXiaomi will set up a local team to help penetrate the smartphone markets in India

New Delhi: Chinese smartphone maker Xiaomi Inc, which on

Tuesday announced its entry into the Indian market via e-commerce

platform Flipkart, is also looking to build its team in the country to

start selling via its own e-commerce website once it gets approvals

and puts operations in place.

Xiaomi (pronounced as Shiao-Me), is already in the process of

building its core team and is looking to tie up with multiple partners

both in e-commerce space as well as logistics providers, said

company vice president Hugo Barra at the launch of its first

products in New Delhi.

The company, known as the Apple of China, is looking to build a core

team of 8-10 people in India in the first year and hire two dozen

engineers for its Bangalore office.

“It takes a lot of time and effort to start ecommerce operations… we

will leverage our partnership with Flipkart and in the meanwhile set

up our own operations,” said Manu Jain, India operations head,

Xiaomi. The company is in middle of registering its Indian arm.

Xiaomi, which sells direct to customers via online shops and with minimal marketing spending in order to keep its prices competitive,

chose to enter India with a partner due to the logistics and payments challenges in the country.

India and Philippines are the two markets where the company has taken a different approach. “Both these markets have significant

challenges primarily logistics and payments,” said Barra.

According to an International Data Corporation (IDC) report, vendors shipped a total of 17.59 million smartphones to India in the first

quarter, compared with 6.14 million units in the same period in 2013. Samsung continued to lead the smartphone market with a 35%

market share in the first quarter of 2014, followed by Micromax (15%), Karbonn (10%), LAVA (6%) and Nokia (4%).

“Xiaomi is known for its build quality and low prices so they will have an advantage over some of the competition in the country. However,

they need to establish a brand and build a credible service infrastructure to take on the competition in the country,” said Pinaki Ranjan

Mishra, partner and national leader, retail and consumer products, at consulting firm EY.

The company has set up 36 service centres, including two exclusive Mi service centres in Delhi and Bangalore, to provide after-sales

services in the country. Barra does not rule out setting up an assembly unit in the country too.

“It is a matter of when... we anticipate that we would want to get products assembled here sooner rather than later,” he added. “We have a

very strong partnership with Foxconn and Inventec — two main manufacturers we work with — and the obvious way to do is to leverage their

expertise and they are looking to manufacture here in India,” he added.

Xiaomi, which outsells Apple in China, expects to sell close to 60 million devices by end of 2014. In the first half of 2014, the company has

already sold close to 26.1 million devices and reported revenues of about 33.6 renminbi (RMB) or close to $5.5 billion.

In 2013, the company sold close to 18.7 million devices globally and reported revenue of about $5 - $5.5 billion.

The company is close to launching its operations in Indonesia in coming few weeks. It is also looking to expand its presence in Brazil and

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Mexico followed by Thailand, Vietnam, Turkey and Russia, said Barra.

The company, which uses a customised version of Google’s Android software for its products, has launched three products under its

flagship brand Mi — Mi3, Redmi 1S and Redmi Note — in India.