Chinese smartphone manufacturer Xiaomi has reportedly lost its top spot in the smartphone market in India. Samsung now grabs the No. 1 position. With this shake-up, Samsung has forced Xiaomi to completely revamp its smartphone strategy in India. Launching more expensive phones, providing innovative financing schemes, and other factors helped Samsung claim the crown in the Indian smartphone market.
Xiaomi misjudged Indian consumer taste and focused more on selling smartphones under INR 10,000 ($120). However, this backfired as Indian consumers were willing to pay extra for better-looking models with rich features. This is where Samsung phones came in, which, although a bit pricey, came with a more premium design, better software support, a great set of features, and more. And on top of that, with great financial schemes, Samsung phones were overall the best feature-packed smartphones available in the market.
Indian customers didn't hesitate to pay a premium to Samsung for better smartphones
According to a report by Counterpoint Research (via Reuters), Samsung grabbed 20% of the Indian smartphone market share in Q4 2022. On the other hand, Xiaomi managed to capture an 18% market share in the same period. Tarun Pathak, a research director at Counterpoint, said, “The Indian market is witnessing a ‘premiumization' trend. (But) Xiaomi has been caught underprepared for the shift with a budget phones-heavy portfolio.”
This change in the top position shows how companies that do not cater to changing customer needs will be penalized. Moreover, Counterpoint's data shows that the budget smartphone market (sub-$120) in India fell from 46% in 2020 to 26% in 2022. On the flip side, the premium smartphone category ($360 or above) doubled its share to 11% in the same period.
To tackle this and regain its position from Samsung, Xiaomi has decided to shift its focus to premium smartphones in India. This has also paid immediate dividends in the form of the Redmi Note 12 clocking sales of $61 million within two weeks of its launch in the country. Additionally, to improve its financing schemes, Xiaomi has partnered with multiple Indian banks to offer loans, calling them the ‘Mi Credit' scheme. For comparison's sake, Samsung's financing partners have helped the company generate $1 billion in device sales in India in 2022.
