XIAOMI vs SAMSUNG

(Blow by Blow)
By Rajiv Singh - FORBES INDIA, AUGUST 2018

Introduction
Asim Warsi (Senior VP, Samsung India) and Manu Jain (Managing Director and VP,
Xiaomi India) are the interviewee of this article. Samsung, the long-standing
champion of the smartphone industry in India, has been barely able to keep up the
onslaught of the Chinese companies that have been trying to capture the flag. Out
of these companies, for the past three quarters, Xiaomi has been the biggest
challenge that Samsung has had the misfortune of facing.
“The number of connected devices (excluding smartphones and laptops) on
Xiaomi’s IoT platform reached approximately 150.9 million units in 2018, a year-on-
year increase of 193.2%. Xiaomi AI assistant Xiaoai had been installed and activated
on more than 100 million smart devices as of December 31, 2018, and had over 38.8
million monthly active users in December 2018.”- China Internet Watch
The fight between these two companies have been a close one in which no one has
come out as the clear winner. At one hand, Xiaomi has been the Quarterly
Champion and on the other, Samsung has been numero Uno for the past two years,
Annually. Asim Warsi emphasizes on this fact by saying that at Samsung, the sales
aren't measured quarterly. He says that they're are here for the long haul.
Similarly, Manu Jain believes the same. Xiaomi is focusing the making India it’s
biggest market. For Samsung, America is its second biggest market. Competing with
Apple in the American market is becoming really tedious for Samsung. Likewise,
Xiaomi is also having a tough time competing with its Chinese siblings (Oppo, Vivo,
etc.) for the Chinese market. So, India is the next best option for both of these
companies.
The Clash of two Giants
Xiaomi disrupted the Indian market by introducing the online-only purchasing
option. This marketing strategy was new and the people of India were unsure of it.
But slowly, through reliable flagship models and services, Xiaomi was able to
capture 28% of the market share. Affordable smartphones with premium and
attractive features is a great combination which Xiaomi was successfully able to in
cash. It also boasts about the fact that one out of every three smartphones sold in
India is a Xiaomi.
“Three out of the top five smartphone models, according to a Counterpoint study,
were from Xiaomi, with Redmi 5A being the bestseller.”
In spite of mutual respect for each other, Samsung and Xiaomi are not engaged in
a friendly match. It’s a fierce battle between equals, reckon analysts, where no side
is willing to settle for the runners-up spot.

Xiaomi’s Marketing Strategy

Xiaomi is a software company to its core. It also has had its fair share of struggles
while establishing its roots in the Indian market. Initially mocked by rivals for
adopting an ‘online-only’ approach in India, Xiaomi had the last laugh. This concept
of online shopping was a calculated risk. By using the concept of “Flash Sale”, it
attracted its customers. When these customers came to know about the scarcity
that often occurred after a particular flash sale, they were attracted and wanted to
ride the bandwagon of purchasing a Xiaomi phone. “We are an innovation-driven
internet company… for which amazing products and honest prices come hand in
hand,” Lei Jun, the maverick founder of Xiaomi, wrote, expressing his bafflement
over the high margin game played by other companies.

“Xiaomi Holds 46 Percent of India's Online Smartphone Market in Q2 2019” -

News18
Samsung’s reply to Xiaomi
It’s a clash of two different companies with two completely different ideologies.
For instance, Samsung only focuses on the hardware. It believes in making the right
device, at the right price for the right target customer (millennials). It focuses on
the feedback it receives from its user base. Then accordingly, it creates the right
device with the right features. For example, when Samsung came up with the J
series it also introduced the video over chat feature. This was a big hit among the
youth. In just a month, 20 lakhs units were sold. The biggest thing to notice was the
fact that Samsung brought this technological change in order to compete with the
existing opposition. It learnt from its mistakes and adapted to the current climate.
Asim Warsi said, and I quote, “The hunger to question the current status and
inquire about what’s new for consumers are what makes Samsung.”
“Samsung India will begin offering finance solutions in partnership with DMI
Finance to customers buying the company’s smartphones, through its digital
platform called Samsung Finance+. The solution is aimed at making finance
options available to consumers who don’t have credit cards, debit cards or a credit
history, thus increasing the consumer base for the No 2 smartphone player in the
market.” - EconomicTimes

Conclusion
While Samsung focuses on only its smartphones, Xiaomi uses its smartphone
lineup to sell its other products such as Air Purifiers, Fitbit, etc. The customer base
it has created through the phones are the same ones who buy its other products.
They have come to trust in the brand image of Xiaomi, just like Apple.
The next big challenge for Xiaomi is capturing the offline market and for Samsung
to taek back its rightful throne at the top. Sharing the crown is not an option.
From here on out, it only gets more tough for these two companies.
References:
 https://mepdf.com/forbes-india-august-31-2018/
 https://economictimes.indiatimes.com/industry/cons-
products/electronics/slowdown-no-worry-as-samsung-growing-across-
channels-samsung-mobile-business-vp/articleshow/71024046.cms
 https://www.news18.com/news/tech/xiaomi-holds-46-percent-of-indias-
online-smartphone-market-in-q2-2019-2308935.html
 https://economictimes.indiatimes.com/tech/hardware/samsung-offers-
finance-options-for-smartphone-buyers/articleshow/71312104.cms
 https://www.chinainternetwatch.com/28668/xiaomi-q4-2018/
 https://www.samsung.com/in/smartphones/
 https://www.mi.com/global