Xiaomi India is strategically maneuvering to regain its foothold in the competitive Indian market, focusing on ecosystem expansion and premiumization while addressing past challenges. After facing a period of decline, the company is implementing a multi-faceted strategy encompassing product development, local manufacturing, retail presence, and customer engagement.
Growth & Market Position
In Q3 2025, India's smartphone shipments saw a modest 3% year-on-year increase, reaching 48.4 million units. Vivo led the market with a 20% share, followed by Samsung at 14%. Xiaomi secured the third position, closely competing with OPPO, with both brands shipping 6.5 million units. While Xiaomi's shipments grew by 6% in 2024, the company's market share in India had decreased from 28% in 2018 to 15% in 2023. Xiaomi aims to ship 700 million devices in India over the next decade. The company had shipped 350 million devices since 2014, 250 million of which were smartphones.
Ecosystem Vision
Xiaomi is evolving beyond being just a smartphone vendor, aiming to establish itself as a comprehensive ecosystem brand. The company's strategy involves integrating smartphones with AIoT (Artificial Intelligence of Things) devices to create a connected experience for users. Xiaomi is focusing on "Human Time, Car Time, Home" to connect devices seamlessly across mobile, home, and potentially electric vehicles. Currently, about 20 million users own five or more Xiaomi devices, and the company intends to increase user engagement across multiple devices. Xiaomi's HyperOS 3, currently in testing, seeks to integrate all Xiaomi devices, including smartphones, TVs, and tablets, into a single, seamless ecosystem. The software is expected to roll out soon and promises to be faster and smoother.
Future Strategy
Xiaomi is focusing on several key areas to bolster its market position:
- Premiumization: Xiaomi is strategically shifting towards the premium segment by offering better features, superior retail experiences, and a robust ecosystem. This includes launching new phones to fill portfolio gaps.
- Localization: Xiaomi plans to increase local sourcing of components. The company aims to source 55% of non-semiconductor smartphone components locally by 2025. In 2023, this figure was around 35%. They are also looking to increase the net domestic value addition for its smartphones to 22% by 2025.
- Omnichannel Presence: Xiaomi intends to strengthen its omnichannel presence in India, combining online and offline strategies to reach a wider audience. This includes expanding its retail footprint, especially in smaller cities.
- AI Integration: Xiaomi is focusing on incorporating Artificial Intelligence (AI) to enhance smartphone functionality and user experience.
- Manufacturing Partnerships: Xiaomi is expanding its manufacturing partnerships in India to enhance local value addition. Dixon Technologies is setting up a new facility for Xiaomi in Noida that will produce up to a million smartphones per month.
- Device shipments: Xiaomi aims to ship 700 million devices over the next decade.
- Focus on mid-range segment: Xiaomi is focusing on the ₹10,000 to ₹15,000 price band.
Challenges and Opportunities
Despite its efforts, Xiaomi faces challenges, including intense competition and the need to further strengthen its premium offerings. The company's sales dipped after leading the market for five quarters until the end of 2022. Regulatory challenges have also created hurdles. However, Xiaomi sees India as a priority market and is increasing investments in product development, retail, and services. The company believes that the increasing 5G penetration will boost the smartphone industry. By adapting to evolving consumer preferences and focusing on innovation, Xiaomi aims to solidify its position and achieve sustainable growth in the Indian market.
