Lei Jun, the co-founder, and CEO of Xiaomi just traveled to India recently along with many other executives, for the opening of their new headquarters in India. During an interaction with the media at Xiaomi’s new Indian Headquarters at Bangalore, he shared his thought regarding how Xiaomi is planning to disrupt the market, how the company is expanding its offline presence and many other things.
First of all, he talked about the demand of Redmi phones running stock Android and he said that as many of the Mi Fans love stock Android, he has planned to bring more Redmi Phones into the Indian market, under the Android One program. So, it is quite obvious that we will see the Mi A2 soon, suggested by the rumors that the Mi 6X, which has been launched in China recently will arrive in India as Mi A2 running stock Android.
Xiaomi CEO also acknowledged the issues with products getting out of stock very fast and being mostly unavailable, Mr. Jun cleared this by saying that Xiaomi doesn’t consider the ‘out of stock’ label as a medal of honor and the company is working hard to meet the demands. He specifically pointed out that Xiaomi is finding it tough to fulfill the demand of two of its latest products- the Redmi Note 5 Pro and Mi TV 4.
He also pointed out they Xiaomi has ramped up the production capacity by three times in the last one year, but with Redmi Note 5 Pro, there is a supply issue with a ‘light assorting chip’ which is part of the camera module on the Redmi Note 5 Pro. He also said that demand for RAM has increased a lot and crypto-mining is making the situation worse.
At this point, Manu Kumar Jain, Xiaomi India Head and Global VP added that all products except the Redmi Note 5 Pro and Mi TV 4 are on open sale and have no availability issues. He also added they Xiaomi is using machine learning to keep away resellers. While he was asked about the premium amount that some Mi Preferred partners and resellers are charging, Manu said that Xiaomi is cutting off the relationship with such dealers.
Mr. Jun is hopeful regarding manufacturing plants for televisions in India and he said that Xiaomi is now paying 20% import duties, so setting up plants for manufacturing televisions in India will help them.
While he was asked an obvious question regarding how tough it is for Xiaomi to sell phones that are priced above Rs. 15,000, he didn’t even try to avoid it and reply in a straightforward way, he said,
“We are still in our fourth year of operations in India. We have managed to be successful in five categories – Redmi 4A/5A (Rs 6,000), Redmi 4/5 (Rs 7,000 ~ Rs 10,000), Redmi Note 5/Pro (Rs 10,000 ~ Rs 15,000), Redmi Y1 (< Rs 10,000) and Mi A1 (< Rs 15,000). We want to take this step by step. We want to only introduce products which will be a hit in the Indian market. In the next two years, we want to have successful products in < Rs 20,000, < Rs 30,000 and Rs 30,000+ categories.”
And he explained why Mi Mix and Mi Mix 2 didn’t sell well when compared to other phones from Xiaomi. He pointed out that many people demand phones like the ones OnePlus brings, and in the case of OnePlus a lot of the features are decided specifically for India, whereas the Mi Mix wasn’t designed specifically for India and hence, Xiaomi will try to bring some premium phones focused towards India, and he joked saying that probably he won’t have to answer to this question next year.
Question regarding the latest design trends was thrown at Mr. Jun and he was asked about the idea of having a notch on a smartphone. And he replied,
“Somehow the media in China doesn’t like the idea of the notch on display. What do you think? It’s indeed a very high-pressure move for all smartphone vendors. People want a full-screen display, but we need to make space for camera, sensors, etc. There is no perfect solution yet.”
He also talked about Xiaomi’s plan for offline expansion, he seemed to be quite happy with the present data as, according to IDC, Xiaomi has 11-12% share in the offline market right now. He said that though the figure is not as good as 56% share in the online smartphone market, he assumes that Xiaomi would be able to capture 30% of the offline market by next year.