Xiaomi to launch new premium ‘Mi’ devices in India as it bets big on dual-brand strategy

Xiaomi is bringing its dual-brand strategy to India. The company will now operate with two distinct brandings 'Redmi' and 'Mi'. While the former is quite popular in India, Xiaomi's next big bet is on the 'Mi' branding under which it plans to launch new and more premium products.

To give you some context, Xiaomi last year announced "Redmi" as a separate brand in China. Since then, Redmi expanded its smartphone lineup beyond the budget segment (sub-₹15,000) with phones such as Redmi K20 and Redmi K20 Pro. While all the new Redmi phones came to India, Xiaomi didn't have this distinct branding here, thus far.

Xiaomi has made some internal changes as well. Sumit Sonal has been appointed Marketing Lead, Mi. He was earlier Product Marketing Lead for Redmi. Raghu Reddy, Head of Categories, Xiaomi India, is also involved in the new 'Mi' rebranding efforts.

"…we feel that all the time is right for us to start building a dual-brand or dual sub-brand strategy that we follow in China as well… Going 2020, we want to be in a place where we start breaking in the premium flagship devices from the new stable as well," said Reddy in a briefing to Hindustan Times.

Xiaomi hasn't been aggressive with the Mi range of smartphones in India compared to Redmi, which has mainly driven the company's strong growth in the recent growth. Under the Mi smartphone lineup, the company currently offers Mi A3, Mi A2, and Mi Mix 2. Apart from phones, Mi smart TVs and IoT products such as web cameras under the portfolio.

Reddy pointed out that Mi branded devices will have a better look and feel, and deliver a more premium experience. For a show of strength, the company gave a preview of its Mi Mix Alpha concept phone. Described as a "futuristic phone", Mi Mix Alpha comes with a wrap-around-like flexible display. It has features such as 5G support, display acoustic sound, and a 108-megapixel camera.

Xiaomi didn't allow us to touch the phone, which could cost roughly ₹2.5 lakh if commercially launched in India.

That said, a dual-brand strategy isn't a new concept. Already, Huawei has a sub-brand Honor whereas BBK Electronics has brands such as Oppo, Vivo, and Realme. Until a couple of years ago, Lenovo and Motorola also aggressively pursued the dual-brand strategy for smartphones.

"If the positioning is distinctive, it definitely helps you cater to different sets of audiences. That's a challenge even in front of us -- how do you go beyond people who are your regular set of customers," said Reddy.

"… the philosophy cannot change just at the point of sale. For example, just sales and marketing teams cannot alone decide. It should start from the way the product is designed. And that's where two sub-brands actually help you widen the entire customer base that we're willing to target," he added.

In the case of Xiaomi, the company has a big perception battle since it is mainly regarded as a budget smartphone maker. The company, however, did experiment with a relatively more expensive, Redmi K20 series.

Faisal Kawoosa, founder and chief analyst techARC, said, "The biggest challenge for the brand is breaking the 'affordable' barrier. At a time when brands have successfully graduated to premium segments, examples like Vivo and OPPO, Xiaomi is still an affordable segment brand. So, the two-brand strategy will help them to differentiate in entire things product to delivery go overall experience."

"Dual brand hasn't worked for brands which haven't brought in a real differentiator. If two-brand strategy only confuses consumers and other stakeholders, it's a failure, else it can work. The difference has to be really convincing," he added.