Xiaomi to Slash Smartphone Line After Conceding India Missteps

Xiaomi Corp. plans to focus on 5G smartphones and a leaner product portfolio in India, trying to claw back market share lost to rivals including South Korea’s Samsung Electronics Co. in its second-biggest market.

In the quarter to March, Xiaomi ranked fourth behind Samsung, Oppo and Vivo in India’s smartphone market, according to researcher IDC Corp. (REUTERS)

Xiaomi Corp. plans to focus on 5G smartphones and a leaner product portfolio in India, trying to claw back market share lost to rivals including South Korea's Samsung Electronics Co. in its second-biggest market.

China's Xiaomi held the smartphone lead in India for years before regulatory headaches and a too-vast product portfolio — which by its own admission confused customers — led to its decline. In the quarter to March, Xiaomi ranked fourth behind Samsung, Oppo, and Vivo in India's smartphone market, according to researcher IDC Corp.

India is one of the most intensely contested markets for the world's biggest phone brands, with companies such as iPhone maker Apple Inc. pushing to boost sales in the planet's most populous country. Xiaomi is betting on a gradual recovery, deepening its ties with local partners and simplifying its product offering.

“This year will be number one? No, we will not be,” Muralikrishnan B., President at Xiaomi India, told reporters at a news conference late last week. “These are long-term playoff games.”

Key changes including fewer smartphone launches, an increased focus on customer experience and the growth of sales through brick-and-mortar stores will help the company pivot back to its earlier success, Muralikrishnan said.

In the past, the company launched “just too many products, too many options,” he said. “To a certain extent, we reacted to what competition was doing.”

Xiaomi is also making some other key changes in India, its most important market outside of China. Pushed by New Delhi, it is deepening local sourcing and also handing some of its smartphone assembly in India to homegrown Dixon Technologies India Ltd.

To curtail spending, the company laid off as many as 30 employees in June and more job cuts are likely, the Economic Times newspaper reported. Muralikrishnan, however, said Xiaomi India hasn't let people go this year and doesn't plan to do so.

“You will, in the interest of efficiency, in the interest of clarity of roles, restructure your organization whenever required to suit the needs of the strategy,” he said. “Now to all speculations on us firing people — that is something that I will flatly deny as untrue.”

Xiaomi will unveil a new 5G smartphone Aug. 1 priced at $200 to $250, Chief Marketing Officer Anuj Sharma said. The move is part of the company's strategy to sell affordable, locally assembled 5G models.