XIAOMI

The use of smartphones has seen spectacular growth in the recent past. Most users

have shifted from simple phones to smartphones. IBM was the first company to

introduce smartphones in the year 1990. Later, it was followed by Nokia, Ericsson,

Apple, Blackberry, Samsung and others. The smartphone market has plenty of new

players who manufacture and sell smartphones. Xiaomi popularly known as “Apple of

China” was founded 7 years ago on April 6, 2010, by a serial Entrepreneur Lei Jun in

Beijing and became the leading smartphone brand in the first largest market China

and the second largest market India. Later, it expanded its business in other countries

like Malaysia, Singapore, Indonesia, Philippines and South Africa. It has entered the

Western market but couldn’t catch enough attention. The founder of Xiaomi has an

estimated net worth of US$ 12.5 billion which makes him the 11th richest person of

China and 118th richest person of the world. The market valuation of Xiaomi is more

than the US $ 46 billion. Initially, Xiaomi was a startup technology-based company

and in a span of fewer than 5 years has become a global player in the smartphone

market. Xiaomi has launched its first smartphone in August 2011 and became the

largest smartphone company in China by 2014. It is the world’s fourth largest

smartphone manufacturer after Samsung, Huawei and Apple. Its target market is the

price-sensitive lower middle-income group of customers and millennials who prefer

smartphones in a lower price range. The serial entrepreneur Lei Jun has founded

Xiaomi in 2010 based on the vision “Innovation for everyone”. According to the Wall

Street Journal, Xiaomi awarded the founder and CEO Lei Jun about $1.5 billion in

stock. In July 2019, Xiaomi was listed in Fortune Global 500 companies and became

the youngest Global 500 companies of 2019. It ranks 468th among all categories and

ranks 7th in the internet services and retail category (Xiaomi Team-Aug 20, 2019).
It entered the Indian market on July 15, 2014, in partnership with Flipkart to sell its

smartphone Mi 3 whose price was Rs. 13,999. It was an exclusive sales tie-up with

Flipkart, and the Mi phones were sold within 30 min on the very first day. Xiaomi

India’s focus is to design high-quality products and make it available at accessible

prices to the world. Xiaomi Corporation registered in Asia as Xiaomi Inc., is a

Chinese designer and manufacturer of consumer electronics and related software,

home appliances, and household items. Behind Samsung, it is the second largest

manufacturer of smartphones, most of which run the MIUI operating system,

(software development). In 2020, the company sold 146.3 million smartphones and its

MIUI operating system has over 500 million monthly active users. It also is a major

manufacturer of appliances including televisions, flashlights, unmanned aerial

vehicles, and air purifiers using its Internet of Things and Xiaomi Smart Home

product ecosystems. The name "Xiaomi" literally means millet and rice, and is based

on the Buddhist concept of starting from the bottom before aiming for the top. Xiaomi

was founded in 2010 in Beijing by now multi-billionaire Lei Jun when he was 40

years old, along with six senior associates. Lei had founded Kingsoft as well as

Joyo.com, which he sold to Amazon for $75 million in 2004. In August 2011, Xiaomi

released its first smartphone and, by 2014, it had the largest market share of

smartphones sold in China. By 2015, it was developing a wide range of consumer

electronics. In the second quarter of 2021, Xiaomi surpassed Apple Inc. to become the

second-largest seller of smartphones worldwide, with a 17% market share, according

to Canalys. The company is ranked 338th and is the youngest company on the Fortune

Global 500. Xiaomi keeps its prices close to its manufacturing costs and bill of

materials costs by keeping most of its products in the market for 18 months, longer
than most smartphone companies, The company also uses inventory optimization and

flash sales to keep its inventory low. Initially the company only sold its products

online; however, it later opened brick and mortar stores. In April 2014, Xiaomi

purchased the domain name mi.com for a record US$3.6 million, the most expensive

domain name ever bought in China, replacing xiaomi.com as the company's main

domain name. In September 2014, Xiaomi acquired a 24.7% stake in Roborock. In

December 2014, Xiaomi raised US$1.1 billion at a valuation of over US$45 billion,

making it one of the most valuable private technology companies in the world. The

financing round was led by Hong Kong-based technology fund All-Stars Investment

Limited, a fund run by former Morgan Stanley analyst Richard Ji. In 2014, the

company sold over 60 million smartphones. In 2014, 94% of the company's revenue

came from mobile phone sales. In April 2015, Ratan Tata acquired a stake in Xiaomi.

On 30 June 2015, Xiaomi announced its expansion into Brazil with the launch of

locally manufactured Redmi 2; it was the first time the company assembled a

smartphone outside of China. However, the company left Brazil in the second half of

2016. On 26 February 2016, Xiaomi launched the Mi5, powered by the Qualcomm

Snapdragon 820 processor. On 3 March 2016, Xiaomi launched the Redmi Note 3 Pro

in India, the first smartphone to powered by a Qualcomm Snapdragon 650 processor.

On 10 May 2016, Xiaomi launched the Mi Max, powered by the Qualcomm

Snapdragon 650/652 processor. In June 2016, the company acquired patents from

Microsoft. In September 2016, Xiaomi launched sales in the European Union through

a partnership with ABC Data. Also in September 2016, the Xiaomi Mi Robot vacuum

was released by Roborock. On 26 October 2016, Xiaomi launched the Mi Mix,

powered by the Qualcomm Snapdragon 821 processor. On 22 March 2017, Xiaomi

announced that it planned to set up a second manufacturing unit in India in

partnership with contract manufacturer Foxconn. On 19 April 2017, Xiaomi launched

the Mi6, powered by the Qualcomm Snapdragon 835 processor. In July 2017, the

company entered into a patent licensing agreement with Nokia. On 5 September 2017,

Xiaomi released Xiaomi Mi A1, the first Android One smartphone under the slogan:

Created by Xiaomi, Powered by Google. Xiaomi stated started working with Google

for the Mi A1 Android One smartphone earlier in 2017. An alternate version of the

phone was also available with MIUI, the MI 5X. In 2017, Xiaomi opened Mi Stores in

India, Pakistan and Bangladesh. The EU's first Mi Store was opened in Athens,

Greece in October 2017. On 7 November 2017, Xiaomi launched sales in Spain and

Western Europe. In Q3 2017, Xiaomi overtook Samsung to become the largest

smartphone brand in India. Xiaomi sold 9.2 million units during the quarter. In April

2018, Xiaomi announced a smartphone gaming brand called Black Shark. It beared 6

GB of RAM coupled with Snapdragon 845 SoC, and was priced at $508, which was

cheaper than its competitors. On 2nd May 2018, Xiaomi announced the launch of Mi

Music and Mi Video to offer "value-added internet services" in India. On 3rd May

2018, Xiaomi announced a partnership with 3 to sell smartphones in the United

Kingdom, Ireland, Austria, Denmark, and Sweden In May 2018, Xiaomi began selling

smart home products in the United States through Amazon. In June 2018, Xiaomi

became a public company via an initial public offering on the Hong Kong Stock

Exchange, raising $4.72 billion. On 7 August 2018, Xiaomi announced that Holitech

Technology Co. Ltd., Xiaomi's top supplier, would invest up to $200 million over the

next three years to set up a major new plant in India. In August 2018, the company

announced POCO as a mid-range smartphone line, first launching in India. In Q4 of

2018, the Xiaomi Poco F1 became the best selling smartphone sold online in India.

The Pocophone was sometimes referred to as the "flagship killer" for offering high-
end specifications at an affordable price. In October 2019, the company announced

that it would launch more than 10 5G phones in 2020, including the Mi 10/10 Pro

with 5G functionality. On 17 January 2020, Poco became a separate sub-brand of

Xiaomi with entry-level and mid-range devices. In March 2020, Xiaomi showcased

its new 40W wireless charging

ABSTRACT

The case study is based on Xiaomi Corporation, a Chinese Public company,

headquartered in Beijing, China. Xiaomi (the word Xiaomi means millet which means

a “grain” that is a staple diet in various parts of the world) is the world’s fourth largest

smartphone (a smartphone is a mobile phone with various functions of a computer)

company based on total shipments. It produces low-cost but high specification

smartphones. Xiaomi which has emerged as the top smartphone brand in India also

manufactures consumer electronics and mobile apps. Currently, Xiaomi revenue

comes from the sale of products like smartphones, Iot, lifestyle products, advertising

services and internet value-added services (which include online games). According

to IDC India, Xiaomi has 29.7% of market share at the end of Q218. The organization

has achieved an astounding growth. Xiaomi’s India revenue jumped 175% in 2017–

2018 to Rs. 230.6 billion year on year. The firm that sells smartphones under the

brand Redmi and Mi had a net profit of Rs. 2.93 bn in 2017–2018 (according to IDC,

Counterpoint Research). Xiaomi Corporation which was founded in April 2010 was

listed in the Hong Kong stock exchange on July 9, 2018. Xiaomi being the “Coolest

Company” in the heart of its users is committed to continuous innovation. Xiaomi has

launched its first smartphone in August 2011 and became the largest smartphone

company in China by 2014. Xiaomi the Bengaluru headquartered firm has entered the
Indian market on July 15, 2014, in partnership with Flipkart to sell its smartphone

with a concept of Flash sales. It has become a global player from a startup company in

smartphone market in a span of not even a decade. Samsung of South Korea and

Xiaomi of China are expected to continue their fight for top slot in 2019. The study

aims to analyse the Indian smartphone market with the business model, marketing

mix and innovative strategies of Xiaomi in order to identify its strengths, weaknesses,

opportunities and challenges. The finding indicates that the company needs to focus

on improving its product quality, advertising and distribution network to face fierce

competition. Through the innovative strategies of Xiaomi, it is likely to become a

game changer in the near future.

solution, which was able to fully charge a smartphone with a 4,000mAh battery from

flat in 40 minutes. In October 2020, Xiaomi became the third largest smartphone

maker in the world by shipment volume, shipping 46.2 million handsets in Q3 2020.

On 30 March 2021, Xiaomi announced that it will invest US$10 billion in electric

vehicles over the following ten years. On 31 March 2021, Xiaomi announced a new

logo for the company, designed by Kenya Hara. In July 2021, Xiaomi became the

second largest smartphone maker in the world, according to Canalys. It also surpassed

Apple for the first time in Europe, making it the second largest in Europe according to

Counterpoint. In August 2021, the company acquired autonomous driving company

Deepmotion for $77 million. As a company based in China, Xiaomi is obligated to

share data with the Chinese government under the China Internet Security Law and

National Intelligence Law. There were reports that Xiaomi's Cloud messaging service

sends some private data, including call logs and contact information, to Xiaomi

servers. Xiaomi later released an MIUI update that made cloud messaging optional

and that no private data was sent to Xiaomi servers if the cloud messaging service was

turned off. On 23rd October 2014, Xiaomi announced that it was setting up servers

outside of China for international users, citing improved services and compliance to

regulations in several nations. On 19th October 2014, the Indian Air Force issued a

warning against Xiaomi phones, stating that they were a national threat as they sent

user data to an agency of the Chinese government. In April 2019, researchers at

Check Point found a security breach in Xiaomi phone apps. The security flaw was

reported to be preinstalled. On 30th April 2020, it was reported by Forbes that Xiaomi

extensively tracks use of its browsers, including private browser activity, phone

metadata, and device navigation, and more alarmingly, without secure encryption or

anonymization, more invasively and to a greater extent than mainstream browsers.

Xiaomi disputed the claims, while affirming that it did extensively collect browsing

data, and saying that the data was not linked to any individuals and that consumers

had consented to being tracked. Xiaomi posted a response stating that the collection of

aggregated usage statistics data is used for internal analysis, and would not link any

personally identifiable information to any of this data. However, after a followup by

Gabriel Cirlig, the writer of the report, Xiaomi added an option to completely stop the

information leak when using its browser in incognito mode.