A Project On

FINANCIAL GROWTH OF XIAOMI IN INDIA FOR THE LAST FOUR

YEARS

By
MAYURI DEY (10405016071)
JAYATREE BANERJEE (10405016082)
AYANTIKA ROY (10405016097)
ANANNA RANI SAHA (10405016112)

BBA (H) DEPARTMENT

INSTITUTE OF ENGINEERING & MANAGEMENT
MAULANA ABUL KALAM AZAD UNIVERSITY OF TECHNOLOGY
KOLKATA
 APPROVAL FORM

STUDENT’S PROFILE
Name Registration No. Roll No.

MAYURI DEY 161042010049 10405016071

JAYATREE
TEAM 161042010038 10405016082
BANERJEE
DETAILS
AYANATIKA ROY 161042010023 10405016097

ANANNA RANI
161042010008 10405016112
SAHA
INSTITUTE INSTITUTE OF ENGINEERING & MANAGEMENT
MAULANA ABUL KALAM AZAD UNIVERSITY OF
UNIVERSITY
TECHNOLOGY

PROJECT DETAILS

FINANCIAL GROWTH OF XIAOMI IN INDIA FOR THE

PROJECT TITLE
LAST FOUR YEARS
DURATION 4 MONTHS

APPROVAL
ACADEMIC GUIDE Prof. Arkaprava Chakrabarty and Prof. Ajanta Ghosh

SIGNATURE

APPROVED BY Prof. (Dr.) Shamindra Nath Sanyal, HoD, BBA (H) Department

SIGNATURE
 DECLARATION
We, MAYURI DEY, JAYATREE BANERJEE, AYANTIKA ROY, ANANNA RANI
SAHA hereby declare that the project entitled “FINANCIAL GROWTH OF XIAOMI IN
INDIA FOR THE LAST FOUR YEARS” submitted by us to the Institute Of Engineering
& Management, Salt Lake, Kolkata, in partial fulfillment of the requirement for the award of
the degree of Bachelor Of Business Administration (H) is a record of authentic project work
carried by our team under the guidance of Prof. ARKAPRAVA CHAKRABARTY and
Prof. AJANTA GHOSH, I further declare that the work reported in this project has not been
submitted and will not be submitted either in part or in full, for the award of any degree or
diploma in any other institute or university.

NAME SIGNATURE
MAYURI DEY
JAYATREE BANERJEE
AYANTIKA ROY
ANANNA RANI SAHA

BBA (H) : 2016 - 2019

PLACE : KOLKATA

DATE :
 ACKNOWLEDGEMENT

I extend my gratitude to my college, Institute Of Engineering and Management for giving us

an opportunity to do a research on “Financial Growth Of Xiaomi In India for the last four

years”. I would like to express my thanks to our Head of the Department Dr. Shamindranath

Sanyal and to our Principal, Prof. Subrata Basak for giving us such a wonderful opportunity.

I am ineffably indebted to my academic guide, Prof. Arkaprava Chakrabarty and Ajanta

Ghosh for conscientious guidance and encourage to accomplish this project work.

At last but not the least gratitude goes to my friends who directly or indirectly helped me to

complete this project report.

Thank you one and all.

EXECUTIVE SUMMARY

The project is about Xiaomi entering the Indian market in 2014 and since then, growing

robustly within such a short span of time. In this process we have tried to find the market

share and shipment of xiaomi as compared to others smartphone brands.

- MAYURI DEY,

- JAYATREE BANERJEE,

- AYANTIKA ROY,

- ANANNA RANI SAHA

 INDEX

Sl. No. CHAPTERIZATION Page No

1 Executive Summary

2 Introduction

3 Scenario Building

4 Objectives of The Project

5 Research Methodology

6 Data Analysis and Discussion

7 Limitations

8 Conclusion

9 Reference

10 Annexure

EXECUTIVE SUMMARY
According to IDC research we have portrait the quarterly market share of Xiaomi comparing
it with other smartphone market. We have even portrait the shipment of xiaomi with the other
smartphone brands. The entire project shows even though xiaomi has entered in india in 2014
it has shown a rapid growth and it has beaten most of the others smartphone brands and grabs
third position after iPhone and Samsung. Xiaomi has introduced so many new strategies such
as offline sale, new trendy gadgets, improvement of smartphone camera, pricing strategy etc.
According to research Samsung is facing tough challenge in competing with the aggressive
pricing strategy of Xiaomi in India. Besides through SPSS we have shown the comparison of
Xiaomi’s revenue with telecommunication revenue, telecommunication wireless subscription,
telecom subscriber, FDI iflow and we have even compared telecom revenue with telecom
subscriber. From the project we found out that if Xiaomi will grow in this way they will beat
all other smartphone brands in years to come.
 CHAPTER I

INTRODUCTION

FINANCIAL GROWTH: The process of improving some measure of an enterprise's

success. Business growth can be achieved either by boosting the top line or revenue of the

business with greater product sales or service income, or by increasing the bottom line or

profitability of the operation by minimizing costs. Financial growth is an increase in the

production of goods and services over a specific period. Economic growth creates

more profit for businesses. As a result, stock prices rise. That gives companies capital to

invest and hire more employees. As more jobs are created, incomes rise. Consumers have

more money to buy additional products and services. Purchases drive higher economic

growth. For this reason, all countries want positive economic growth.

Growth in Telecom Sector :

After the inception in India, over a period of 200 years, telecommunication has indeed grown

by leaps and bounds to occupy an important position in the Indian economy today. Buoyed

by the rapid surge in the subscriber base, huge investments are being made into this industry.

There were around 200 million telephone lines in India which makes it the 3rd largest phone

network in the world after china, and the US. Today, the Growth and Development of

Telecom Sector in India. Telecom market in India enjoys the highest growth rate in the

whole world. The improvement in the standard of living and the development of
infrastructure and connectivity are some of the main reasons for the significant growth of the

telecom industry. In order to capitalise the opportunity of meeting the subscriber needs in

highly competitive market the operators have reduced the tariffs to attract subscribers with

low purchasing power primarily in semi urban and rural India. Through the changing

regulations and events, the Industry players are aiming to achieve acquiring new subscriber

by expanding in semi urban and rural India, and selling more services to existing subscribers.

Several steps were taken to improve the tele-density in the country. The rapid growth in

Indian telecom industry has been contributing to India‟s GDP at large. After independence

the growth in telecom sector in public sector was fair and well planned. The country wide

telecom net wok worth Rs.80000 crores has been set up entirely through public investment. It

had increased the number of telephones in the country from hardly 60000 in 1950 to 21

million in 1999. When the telecom developments of other countries are considered, it is

apparent that the developments in India are not much better. There are not enough telephone

lines in India. There were 7 million phones for a population around 900 million people. India

provides larger number of new telephone connections per year. Between 1988 and 1998, the

number of villages with some kind of telephone facility increased from around 27,316 to

300000 villages. As on January 31st, 2001, the equipped capacity reached a level of 36.7

million and DELs to about 30 million. In the year 2011 the equipped capacity is 546.32 lakh

lines. India is the fastest growing free market democracy in the world. It has a mature and

dynamic private sector, which accounts for 75 per cent of India‟s GDP and a market with

enormous potential due to its large size and diversity. India offers significant business

opportunities to the services, as well as the manufacturing sectors. This is because India

offers benefits such as cost advantage in product development and back- office processing

and the large scale availability of skilled professionals. The middle class population is also a
significant market for any business entity. The target for the 11th plan period (2007-12) is

600 million phone Growth and Development of Telecom Sector in India

XIAOMI first came into Indian market in the year 2014. On 9th March 2016, it launched its

first phone Redmi Note 3.it was a huge opening for the company in the budget segment, and

was well received by Indian customers. With its first international headquarters in Singapore,

Xiaomi announced its expansion beyond the home country of China. Following Singapore,

the company started operations in Malaysia, Philippines and India. The company entered the

Indian market with Mi 3 in partnership with Flipkart, India's leading online retailer. It used

the concept of 'flash sale' to market its value-for-money smartphones.

A flash sale is a discount offered by an e-commerce platform for a short duration of time.

Interested customers had to register for the sale, and Xiaomi sold only few smartphones

through online basis during that time. In India, Chinese brands have always been considered

as cheap and low quality, but Xiaomi changed the total perception of the customers. In fact,

the quality is much higher in comparison to the local brands. With its good quality and

reasonable pricing, Mi phones became an instant hit and the perfect device to upgrade for the

low-end phone users.

Xiaomi continued and launched many more successful mobiles like the Xiaomi Mi4 for Rs.

19,999 in 2015. Xiaomi was highly affordable and was very well received in the market. It

competed with the Samsung Galaxy S5 that was launched at a high price of Rs 50,500 in

2015. Xiaomi understood the taste of the Indian market and continued to launch smartphones

in the mid-price range. Budget offerings helped the brand to expand the footprint and

establish an image of value-for-money products.  

At first, to reduce overhead costs, Xiaomi did not own any offline stores, selling exclusively

from its online store. In recent years, they have been able to sell through offline. It also did
away with traditional advertising and relies on social networking services and word-of-mouth

to publicise its products. As per current standings, Xiaomi happens to be the third biggest cell

phone brand inside the top 30 Indian cities.

Xiaomi has done miracles on the global scene and now 36% of the revenue comes from

international markets. The worldwide growth is 151% on a yearly basis. Although the

increase comes largely from India, Xiaomi said there is progress in Indonesia and European

countries.

Xiaomi is looking to raise at least $10 billion in the IPO, valuing the company at $100

billion. This will most likely be the biggest offering for a 2014.Techcompany in 2018 and the

biggest since Alibaba’s IPO for $25 billion in Xiaomi has filed an IPO in Hong Kong,

marking the first tech company listing in the special administrative region in recent times.

This is a result of loosened rules for allowing companies with multiple classes of shares to

raise equity.

The initial public offering lets public investors join the company that was just pronounced 4th

largest smartphone manufacturer in the world by Strategy Analytics. There is no threat for

Lei Jun who will keep his co-ownership with Lin Bin after the IPO through a special class of

shares.In addition to its booming smartphone business, Xiaomi also backs up dozens of

startups and total sales from its ecosystem doubled in 2017 to reach CNY 20 billion or about

$3.15 billion / €2.6 billion.

The Chinese smartphone maker said it’s bought almost 20 million of its Class B shares

since Jan. 17. But because it hasn’t yet canceled them and some employees exercised

their stock options at the same time, the number of those outstanding shares has actually

increased by about 11.4 million in the period, according to the report it will reduce

Xiaomi’s earnings-per-share unless it cancels some repurchased shares. The company

still has almost two months to buy back stock before a blackout period typically

enforced two weeks prior to earnings, expected in late March. Billions of Xiaomi shares

were unlocked for sale this month after the six-month lockup period that followed the

company’s debut expired. That enabled many shareholdersto join the selling, sending the

stock to a record low on Jan. 16. Xiaomi fell as much as 1.1 per cent.before paring the

drop to trade little changed.

The world’s fourth-largest smartphone maker is looking to raise $10 billion from an initial

public offering (IPO) that would value the company at up to $100 billion, much of it built on

the back of its performance in its home turf, China. But Xiaomi has also been a success in

India, currently the company’s second-largest market.Launched in India in 2014. In just two

years, the brand has become the largest player in the world’s second-largest smartphone

market, elbowing out South Korea’s Samsung.India represents our largest market outside of

mainland China and is an example of the success Xiaomi achieved in international

expansion.

Between January and March 2018, Xiaomi controlled a 31% share of India’s smartphone

market, up from just 13% a year ago.Xiaomi’s spectacular success in India is because of the

value-for-money products, and a strong supply chain. The company made the right moves in

terms of localising its offerings, which has added to its success, analysts said.

The company’s IPO is good news for the Indian market because analysts believe that the

availability of additional funds will help Xiaomi invest more here. In all likelihood, this

won’t be restricted to only launching new mobile phones but will spill over to other internet

businesses such as its music streaming service, Mi Music.

 CHATPER II

LITERATURE REVIEW

1. Xiaomi is preparing for a 100 Billion Initial Public Offerings : [ CITATION Kum18 \l

1033 ], As Xiaomi Corporation is promising to forever limit the profit margin in its

business to not more than 5 percent. Lei Jun is making this unusual preparation which

may be the Initial Public Offerings of the year. It thought of distributing the excess

amount to its users if the margin is more than the capital in coming years. It is seen

that Xiaomi has strong profitability from a different wide of service it provides to

customers. Xiaomi could be the biggest IPO since Alibaba Group Holding Ltd 25

Billion debut in 2014. The smartphone maker, valued at about 45 Billion during 2014

fund raising, suffered a lot in 2016 but then bounced back by expanding in India and

rebuilding its sales model, where Samsung the biggest vendor in its rival. Being the

5th largest smartphone vendor it is aiming to take on Apple and Samsung, with top

features but at lower prices than its competitors. According to [ CITATION Pin18 \l

1033 ], India remains Xiaomi’s largest market outside of China, where $1 billion of

the nearly $5 billion raised in the initial public offering (IPO) has been set aside for

expansion. According to International Data Corporation the company commands

nearly 30% market share in smartphones, ahead of Samsung in the April-June period.

The company also proposes to expand its lead in the category, led by product

innovation and a strong distribution push both online and offline. Sector experts said
 the latter (offline push) will be critical to its second phase of growth in India as it

diversifies its operations. Xiaomi has expanded its dominance in the smartphone

market by growing its share beyond 30% in Q4 since it beat market leader Samsung

in mid-2017.

2. Xiaomi opens 500 stores in one day in rural India, creates Guinness record: [CITATION

Xia18 \l 1033 ], Chinese electronics major Xiaomi on Tuesday announced it has opened

a record 500 retail stores in rural parts of India. Called Mi Stores and opened on

October 29, these are similar to the bigger "Mi Home" stores currently operational in

metro cities.

Manu Kumar Jain, Vice President, Xiaomi Global and Managing Director, Xiaomi India, told

reporters that the company created a Guinness record for opening the maximum number of

stores in one single day. Xiaomi plans to open 5,000 Mi Stores by the end of 2019 that will

create nearly 15,000 jobs. He also said that this new business will forever change rural retail

in India.

Xiaomi Started with the online-only strategy but now the company is fast expanding its

presence in offline retail as well. In September, the company launched its fourth flagship "Mi

Home" experience store in the country, in Bengaluru, along with a new office.

With the purpose of strengthening its offline network further, Xiaomi said in September it

wanted to open 100 "Mi Home" stores in 2018 itself.

The report said that the company grew to a new high on the back of its successful Redmi 5A

and Redmi Note 5 Pro series and refreshed Redmi 6/A/Pro portfolio.

But the eight-year-old company wants to be recognised not as just another smartphone

company and it began working towards this mission in 2014.

Along with its products in the smart home portfolio, it is also venturing into non-technology

related segments like luggage, shoes, apparel and more.

Riding on its robust sales in India and Europe, China-based Xiaomi on Monday reported a

49.1 per cent increase in revenue for its third quarter of 2018 as net profit reached 2.48 billion

yuan ($357.23 million).

3. Offline sales helped Xiaomi to become No 1 in smartphone market: IDC [CITATION

Off18 \l 1033 ], A day after a CyberMedia Research confirmed Xiaomi's ascension to

the throne of Indian smartphone market, IDC report has confirmed the same. As per

the International Data Corporation's (IDC) Quarterly Mobile Phone Tracker, Xiaomi

is the leading smartphone seller in India while Reliance Jio dominates the feature

phone segment.

Upasana Joshi, Senior Market Analyst, IDC India, said Xiaomi taking a lead over Samsung in

the smartphone market and Reliance Jio emerging as the leading feature phone company in

India were the two key highlights of the last quarter of 2017. Joshi also said that the growth

of both the vendors was propelled by their aggressive pricing and Xiaomi’s offline expansion

and higher marketing spends were other key factors for the vendor’s high shipments in the

seasonally low quarter.

According to the IDC report, Samsung had 24.2% market share in Q4 2017 against 26.8% of

Xiaomi. Reliance Industries had 24.1% share in feature phone segment against Samsung's

14.5%. However, for the whole year, Samsung dominated the Indian smartphone market with

overall 24.7% share while Xiaomi has 20.9% market share.

IDC said that Xiaomi tripled its shipments year-over-year and sold more than 2 million units

from its offline channel.

As per the research, the Indian smartphone market witnessed a healthy 14% annual growth

with a total shipment of 124 million units in 2017, making it the fastest growing market

amongst the top 20 smartphone markets globally. The market resumed its double-digit

growth after a temporary slowdown in 2016 caused by factors such as demonetization and a

shortage of smartphone components. This contrasts with China, the world's largest

smartphone market that saw its first decline this year, while the USA was relatively flat.

China-based vendors strengthened their positions in the smartphone category with the

collective share of China-based vendors reaching 53% in 2017 from 34% a year ago.

In 2017Q4, vendors shipped a total of 56 million units in the 2017Q4 making it the highest-

ever shipments in a single quarter.

4. China's mobile phone shipments to India slide 12% in 2017 (Xiaomi and others):

[CITATION Chi17 \l 1033 ], China the world's biggest smartphone market, has produced

fewer mobile phones and the new versions in 2017 pointing to a slowdown in one of

the successful segments of China's manufacturing sector in recent years.

The China Academy of Information and Communications Technology (CAICT) said that

mobile phone shipments reached 491 million last year while only 1,054 new types of cell

phones were rolled out, down 12.3% and 27.1% respectively, Shipments of domestic

mobile phone brands fell by 12.4% year on year to reach 436 million last year, accounting

for about 88.8% of total shipments. China's mobile phone shipments started to fall last

March, with the biggest monthly year-on-year drop of 32.5% in December.

Chinese mobile firms in India, one of the world's fastest growing cell phone markets has

increased in a big way in recent years with companies like Oppo and Xiaomi which is

grabbing major market share.

Analysts said that the Chinese smartphone market is expected to see a reshuffle as

smartphone consumption slows down with almost all Chinese people owning at least one

mobile phone.

In November 2017, about 1.4 billion mobile phone subscriptions had been registered in

China. The number of mobile phone subscribers in China has been increasing since 2011,

hitting a new landmark of more than 1.25 billion users in April 2014.

OBJECTIVES
The objectives of the project research is mentioned below:

● To compare the profitability position of MI with other electronic companies.

● To study the growth of Xiaomi company in Indian market in the last 4 years.

● Creating revenue targets by focusing on emerging markets in India.

● Use of SWOT Analysis and Porter’s Five Forces Model.

 RESEARCH METHODOLOGY

Xiaomi Inc. is a privately owned electronics and software company founded in 2010 by serial

entrepreneur Lei Jun, along with seven other co-founders. The mobile internet company has

established its presence in 70 countries and regions and it is among the top 5 in 16 markets.

Xiaomi currently employs about 18,000 people. In 2017 Xiaomi generated more than RMB

100 billion revenues and expected to get listed in the Fortune Global 500 list in foreseeable

future.

Xiaomi Inc. Report contains the application of the major analytical strategic frameworks in

business studies such as SWOT and Porter’s Five Forces on Xiaomi. Moreover, the report

contains analyses of Xiaomi business strategy and its financial strategy.

SWOT ANALYSIS ON MI STRATEGY

It has been ten years since smartphones are on the market. Most consumers are 20 to 40 years

old. However, MI’s product design and marketing strategy aimed at grassroots. MI’s strategy

concentrates on college students and low-income migrant workers, who prefer the phones

with low price but high performance.

Efficient leadership by founder and CEO Lei Jun, impressive rate of growth and cost

advantages compared to competition are considered as major strengths associated with

Xiaomi. At the same time, the company has noteworthy weaknesses such as low profit

margin, lower smartphone capabilities and functionalities compared to major competitors and

difficulties of sustaining competitive advantage.

Strengths
1.      Efficient leadership by Lei Jun

2.      Impressive growth rate

3.      Cost advantage

4.      Brand value estimated at USD 100 billion.

Weaknesses

1.      Low profit margin.

2.      Lower smartphone capabilities and functionalities compared to major competitors such as Apple and

Samsung

3.      Competitive advantage difficult to sustain.

4.      Lack of experience in the global marketplace.

Opportunities

1.      Increasing presence in cloud segment

2.      Formation of strategic collaborations

3.      Focusing on marketing strategy

4.      Achieving a disruptive innovation in the industry as a result of research and development

Threats

1.       Market saturation in smartphone industry

2.       Increase in the costs of resources

3.      Issues with product functionality

4.      Emergence of CSR-related scandals.

PORTER’S FIVE FORCES MODEL

We will be applying the Porter’s five forces model on Xiaomi to analyze and study how these

external five forces act on the company to affect its target market, its profitability and

competitiveness in the smartphones industry.

Rivalry among Existing Firms in Xiaomi Porter’s Five Forces Analysis:

Smartphone industries are very competitive and they are competing on different factors

including price, quality and consumer needs. Especially when it comes to Chinese

smartphones, there are some major competitors including Oppo,Vivo and some others. And

all these Chinese smartphones have also obtained their fair share of customers, where Apple

and Samsung are still the major players.Thus, Xiaomi is facing extremely fierce competition

in the market.

Threat of New Entrants in Xiaomi Porter’s Five Forces Analysis

Threat of new entrants into the internet technology is low. There are entry barriers for

potentially new market players. Economies of scale is one of the major factors and entry
barrier for new companies. Xiaomi is able to offer its products for competitive prices because

it purchases raw materials in bulk and benefits from the economies of scale to a large extent.

The smartphone industry is already loaded with intense competition existing in the

market.Also, there are a lot of barriers to entry for new companies as it takes huge cost to set

up this kind of industry. Thus, in case of Xiaomi, it is actually facing low threat from new

entrants.

BARGAINING POWER OF SUPPLIERS

If suppliers have strong bargaining power then they will extract higher price from the Xiaomi

company.

Bargaining Power of Buyers in Xiaomi Porter’s Five Forces Analysis

Bargaining power of buyers in technology and the mobile internet industry is significant. This

is caused by primarily high level of competition in the global marketplace. Nevertheless,

companies try to reduce buyer bargaining power through developing their ecosystem. If the

buyers have strong bargaining power then they usually tend to drive price down thus limiting

the potential of the Xiaomi' company to earn sustainable profits.

Xiaomi is working towards reducing the bargaining power of buyers through strengthening

its corporate ecosystem in general and increasing inter-dependence of products and services

within its ecosystem in particular.

INDIA’S REVENUE SMARTPHONE SHARE OF XIAOMI

● In terms of revenue, the market grew even faster from 2015 to 2017 but later in 2018

the revenue decreased a bit.

● In 2015 the revenue was 66.81 billion which then increased in 2016 being 68.43

billion and even increased in 2017 being 114.62 billion.

● In India Xiaomi has shown a rapid growth in terms of Market share as well as

revenue.

● In 2018 it has decreased with a difference of 34.9 billion. The revenue in 2018 was

79.65 billion

Market Share Of Xiaomi

● In 2015, Xiaomi had 4.90 per cent market share which has slightly decreased in 2016

and again started increasing in 2017 and 2018.

● In 2016, the average market share of Xiaomi was 3.60 per cent.

● From 2016 to 2017 xiaomi has increased with the market share of 6.30 per cent

● xiaomi recorded its highest ever market share in India during 2018. In 2018,

Xiaomi had 8.30 per cent market share .

USAGE OF XIAOMI PHONE ON THE BASIS OF AGE

● For the last four years since Xiaomi entered into Indian market it is seen that 32%

people of 30-34 age use xiaomi phone. The smartphone market is specially targeting

the teenage students as teenagers use smartphones a lot.

● It is followed by 25-29age people where 25% of the people are using Xiaomi

smartphone.

● 14 per cent of xiaomi users are aged between 20- 24 years.

COMPARISON OF XIAOMI WITH OTHER SMARTPHONE

BRANDS

MARKET SHARE IN 2017

● In 2017, Xiaomi had 30 per cent market share, compared to 26 per cent share of

Samsung. 

● In 2017, Vivo had a market share of 10 per cent, OPPO had 9 per cent and Micromax

3 per cent. Which were the other three brands that found a place in the list of top five

smartphone brands in the country. 

● The results show that other smartphone brands such as iPhone are in top three position

with a market share of 22 per cent.

● In this pie chart it is seen that in 2017 xiaomi has the highest market share than any

other smartphone brands.

MARKET SHARE IN 2018

● Xiaomi surpassed Samsung to become the market leader in 2018 with 21 per cent

share in the Indian smartphone market .

● In 2018, Vivo 10 per cent, OPPO 9 per cent and Micromax 3 per cent were the other

three brands that found a place in the list of top five smartphone brands in the

country. 

● The results show that Apple, which experienced lower than expected sales of iPhones

in some emerging markets in recent times, especially in China, has made a large

impact in the Indian smartphone market with a market share of 34 per cent and xiaomi

is trying to overtake the others. 

INDIA’S SMARTPHONE MARKET SHARE IN 2016

Xiaomi shipment clocked 6% in third quarter which is September 2016 with 9% growth in

the last quarter.

Samsung lead the Indian smartphone market with 29% in quarter one & then slowly

decreasing with 26% in quarter two, 22% in quarter September 2016 and 24% in quarter

December.

Lenovo climbed fifth place with 9% market share in qarter September and December.

Others such as IPhone with a shipment market share of 39% in quarter one. Later increased

by 41% in quarter two, 44% in quarter three and then decreased by 35% in quarter

December,2016.

INDIA’S SMARTPHONE MARKET SHARE IN 2017

Xiaomi has replaced Samsung and emerged as the number one smartphone vendor in India in

the quarter ending December 2017. Xiaomi has replaced Samsung from the top for the first

time, according to IDC’s (International Data Corporation) latest quarterly mobile phone

tracker. Xiaomi is followed by Samsung, while Vivo has moved up to the third place. Xiaomi

registered a three times year-on-year (y-o-y) increase in shipments and held 25% of the

market share in the December quarter. The company received major traction through offline

retail stores and sold more than 200 million units through various retail partners in the

quarter. Xiaomi’s offline expansion and higher marketing spends were other key factors for

the vendor’s high shipments in the seasonally low quarter, IDC India. Samsung’s market

share has remain same in quarter ending September 2017, but its growth in terms of

shipments has been slower in comparison to Xiaomi in quarter ending December 2017. Vivo

managed to move up to the third slot despite the fact that its market share declined from 9%

in the September quarter to 6% in the December quarter. The market share of Oppo, another
Chinese phone maker, also reduced from 8% in the September quarter to 6% in the December

quarter. Huawei being in the fifth slot has a 1% in all quarter, Apple has a shipment market

share of 37% in all the quarter year.

INDIA’S SMARTPHONE MARKET SHARE IN 2018

Q1 2018 Highlights
● The Indian mobile phone market grew by 48% YoY in Q1 2018 driven by strong

demand from the feature phone segment. The smartphone market remained flat YoY.
● The performance of Chinese brands remained strong, accounting for 57% of the total

smartphone market in Q1 2018, up from 53% during Q1 2017. This is the highest ever

contribution by Chinese players in the Indian smartphone market.

● Huawei’s Honor brand captured the fifth position for the first time ever,

in the Indian smartphone market due to the strong performance of

Honor 9 Lite and Honor 7X across online channels.

Q2 2018 Highlights
● Smartphone segment contributed to half of the total handset market during Q2

2018.

● Top five brands captured a record 82% share of the total smartphone market during

the quarter

● Apple had a slow quarter as it underwent changes in its distribution strategy. Apart

from this, its domestic assembling is yet to pick-up pace, which means the Cupertino

giant is still relying on imports for its sales in India.

● Xiaomi recorded its highest ever shipments in India during Q2 2018. The growth

can be attributed to its strong product and supply chain strategy that has allowed it to

launch products with a longer shelf-life than its competitors and that too in the

important sub INR 10000 (<US$150) segment.

Q3 2018 Highlights
● Smartphone segment contributed to half of the total handset market during Q3

2018.
● Top five brands captured 77% share of the total smartphone market during the

quarter.

● In the smartphone segment, Xiaomi recorded its highest ever shipments in India in a

single quarter driven by the new Redmi 6 series and expansion in offline channels.

● Samsung record shipments were driven by J series. Demand for J6 and J8 remained

strong. Apart from this it also launched the Android Go edition, Galaxy J2 core,

giving it a much-needed offering in the sub $100 segment.

Q4 2018 Highlights
● India’s overall mobile phone shipments grew 11% and smartphone shipments grew

10% with feature phones growing faster (11%) than smartphones during 2018

● In terms of revenue, the market grew even faster with a growth rate of 19% during the

year with Samsung, Xiaomi, vivo, OPPO and Apple being the market leaders by

revenue.

● Jio was the overall market leader across all handset types in 2018, with a market share

of 21%.

● Samsung has been holding the pole position by shipments in the smartphone

market since 2012 when it dethroned Nokia. It was also the category leader in

feature phones since 2015.

TELECOM GROWTH IN TOTAL SUBSCRIBER AND TELE-

DENSITY
India is currently the second largest telecommunication market and has the second highest

number of internet users in the world. India’s telephone subscriber base expanded at a

CAGR of 79.38 per cent, reaching 1,206.22 million during FY15–18.

Tele-density (defined as the number of telephone connections for every 100 individuals) in

India, increased from 79.38 per cent in FY15 to 92.84 per cent in FY18.

Total telephone subscriber base and tele-density reached 1,206.22 million and 92.84 per cent,

respectively, at the end of October 2018.

WIRELESS SUBSCRIPTION IN LAST FOUR YEARS

Wireless subscriptions have grown robustly over the past few years.

Between FY15-18, wireless subscriptions in the country increased at a CAGR of 79.38% to

1,183.41 million.

The growth in wireless subscriptions has led to a significant rise in wireless tele-density.

Wireless tele-density of India has increased more than five-fold from 79.38% in FY15 to

92.84% in FY18.

At the end of October 2018, wireless subscriptions stood at 1183.41 million while wireless

tele-density reached 92.84%.

SURGING TELECOM REVENUES

Indian telecom sector’s gross revenue grew from US$ 41.69 billion in FY15 to US$ 39.49

billion in FY18. Gross revenue of the telecom sector stood at rupees 116228 crore (US$

39.49 billion) between April to September 2018.

FORIGEN INVESTMENT FLOWING IN INDIA

FDI inflows into the telecom sector during April 2000 to June 2018 totalled to US$ 31.75

billion.

During this period, FDI into the sector accounted for a share of nearly 8.15% of total FDI

inflows into the country.

TELECOMMUNICATION USERS ON THE BASIS OF AGE

As we can see from the above graph, the people who are in the age group of 21 to 28 years

are the ones who are the maximum users of mobile phones. These segment constitutes the

young executives and other office going people. They are 65% of the total people who were

interviewed. The next age group are the people who are 28 to 35 years old. They are 20% of

the total. They are those who are at home or have small businness units etc. And the next age

group is the youngest generation who are 15 to 21 years old. They are school and college
going students and carry mobile phones to flaunt. They are 15% of the total interviewed

people.

TELECOMMUNICATION USERS ON THE BASIS OF

OCCUPATION

As the above graph shows that 55% of the total people interviewed are working. So these

people are the ones who are the maximum users of mobile phones. They are the young

executives, managers, tele-callers etc. who require mobile for their official purpose. The next

category is the households, who are either housewife, small units which operate from their

home etc. They are 20% of the whole. The next segment is the students. They are 15% of the

whole and 10% of the whole is categorised who are the professionals.
 XIAOMI’S PATENT PORTFOLIO DISTRIBUTION

(GEOGRAPHICALLY)

The graph above represents the geographical distribution of Xiaomi’s patent portfolio. These

are the countries where Xiaomi has filed patents in: Xiaomi has majority of their patents,

12621 to be precise, in China. After China, the USA is the top second country where Xiaomi

has 2039 patents in its portfolio. The increase in number of US patents is an indication of

Xiaomi’s increased efforts to enter the US market.

 Model Summary

Model R R Square Adjusted R Std. Error of the

Square Estimate

1 .647a .419 .128 2.13720

a. Predictors: (Constant), MiRevenue

Europe with 1399 patents is the top third country where Xiaomi holds the maximum of its

patents, followed by Japan at fourth spot with 1072 patents. Interestingly, in our previous

update of this article, Xiaomi only had 408 patents in Europe with no new about when they

were planning to enter the market.

Xiaomi earlier was only selling accessories like headphones, fitness bands, and power banks

from since May 2015 using their retail stores. You could say that it was an attempt to build

the market interest till they work on a stronger patent portfolio to finally make a big splash

using their smartphones.

After 2 years of waiting, their portfolio grew stronger, Xiaomi felt enough confident to enter

Europe’s market by placing their first step in Madrid, Spain. The company launched Mi Mix

2 and Mi A1 smartphones in November 2017 in an event held in Madrid.

Then comes their presence in Japan which is currently almost zero. In terms of their patent

portfolio, Xiaomi has pumped up their arsenal quite well throughout the years. Till 2016,

with just 172 patents Japan was at the seventh place in top countries. And now, they have

more than 1000 patents in Japan, taking it to top fourth place. It won’t be surprising to see

Xiaomi entering Japanese market next year.

Next on the list is South Korea, where consumers have an appetite for the high-end

smartphone at cheaper prices, was vital for Xiaomi’s sales expansion outside the home

country.
Interestingly, in an attempt to enter Korean markets, with 144 patents in its arsenal at that

time, Xiaomi launched its first smartphone in South Korea on 4 January 2015 through mobile

carrier KT Corporation. A couple of days later, on January 6, Xiaomi pulled back its

smartphones from Korean Market due to some legal matters, according to a report by Korean

Times. Speculations were that lack of Korean patents might be a strong reason beneath the

matter.

Xiaomi took the lesson and further strengthened its Korean portfolio to make a foray into the

market. Less than 6 months later, Xiaomi made a re-entry in South Korea by opening its first

offline store in Seoul. At the moment, the company has 954 Korean patents in its arsenal.

India with 880 patents sits at the sixth spot followed by Russia at seventh with 785 patents.

Xiaomi’s progress in India has been tremendous after the pull back that occurred with

Ericsson’s lawsuit against them.

Xiaomi overtook Samsung in 2017 and became the top smartphone company in India.

Looking at just this year, they sold more than 10 Million devices in 2nd quarter of 2018, a

number that was never achieved by any smartphone company before.

XIAOMI’S PATENT PORTFOLIO GROWTH

(GEOGRAPHICALLY)
As we have already talked about how their portfolio has grown with different pace in

different countries. Here’s a table to show timeline of Xiaomi’s patent portfolio growth

globally.

LIMITATIONS

 As XIAOMI first came into Indian market in the year 2014 so we didn’t get much

data.

 The data collected for this project are based on the preceeding years and not in the

current year.

 The data based on Xiaomi is less (are mostly in Chinese language) as Xiaomi is a

Chinese smartphone brand.

CONCLUSION
The history of relationship of telecommunication technology and telecommunication services

has been closely linked. It has been a history where key events have followed a generally
smooth parabolic curve commonly employed in technological projecting. This curve is

actually the connection of a series of successive curve represented by emerging technologies

and series. Just as one technology has begun slowing down and producing marginal returns

and just when service demand seemed to be outpacing the technology, the next bright new

technology has come right along on cue to herald a new golden era. Yet, advances in

telecommunications in developing countries will occur. Some new services, such as

broadcast satellite service, could allow major leaps forward by developing countries without

them first establishing a broad national telecommunications infrastructure. Such

technological leap-forging may be vital, since a growing gap between “Information and

Telecommunication Rich” societies and “information and telecommunications.

In a classic case of “turning a bad thing into a good thing,” however, Xiaomi used its near-

fatal stumble to fashion a radical new business model. With sales rebounding, and the

company expanding globally, it’s worth examining the inner workings of that unusual model,

and how it helped to power the company’s remarkable resurgence.

Like many businesses in the internet age, Xiaomi had initially relied on a dual business model

of selling hardware products and online services. Most revenue came from the sale of

affordable phones and smart TVs, which serve as platforms for Xiaomi’s online

services. Still, it’s hard to argue with Xiaomi’s numbers. Strategy Analytics says Xiaomi’s

phone shipments soared 91 percent in the third quarter — in a market growing only 5 percent

annually worldwide. Analysts say Xiaomi’s revenues could reach 110 billion yuan, or $17

billion, this year. Xiaomi’s “pain point”-solving products have created a passionate fan base

at home and abroad. The company’s Mi phone user interface (called MIUI), the Android-

based operating system that runs on Xiaomi smartphones, now has 300 million activated

users. According to Shou, those users spend close to five hours a day on their phones, helping
to explain the near Comic-Con fervor of Mi Fan clubs worldwide. The venture capitalist says

Xiaomi may be on a path to being one of the most valuable companies in the world.

REFERENCE

Bibliography
 China's mobile phone shipments to India slide 12%. (2017, January 10). p. 1.5.
 Dey, M. (2018). Xiaomi opens 500 stores in one day in rural India creates guinness
record.
Offline sales helped Xiaomi to become number one in smartphone market. (2018, February
14). p. 1.5.
Pinto, V., & Dutta, A. (2018, October 8). India remains Xiaomi's largest market outside of
China. p. 1.

Correlations

MiRevenue TelecomSubscri
ber

Pearson Correlation 1 .719

MiRevenue Sig. (2-tailed) .281

N 4 4
Pearson Correlation .719 1

TelecomSubscriber Sig. (2-tailed) .281

N 4 4
 Correlations

MiRevenue FDIInflow

Pearson Correlation 1 .647

MiRevenue Sig. (2-tailed) .353

N 4 4
Pearson Correlation .647 1

FDIInflow Sig. (2-tailed) .353

N 4 4

Correlations

MiRevenue TelecomRevenu
e

Pearson Correlation 1 .016

MiRevenue Sig. (2-tailed) .984

N 4 4
Pearson Correlation .016 1

TelecomRevenue Sig. (2-tailed) .984

N 4 4

Correlations

MiRevenue WirelessSubscri
ption

Pearson Correlation 1 .715

MiRevenue Sig. (2-tailed) .285

N 4 4
Pearson Correlation .715 1

WirelessSubscription Sig. (2-tailed) .285

N 4 4

Model Summary
Model R R Square Adjusted R Std. Error of the
Square Estimate
a
1 .719 .517 .276 87.65828

a. Predictors: (Constant), MiRevenue

This table provides the R and R2 values. The R value

represents the simple correlation and is 0.719 (the "R"

Column), which indicates a high degree of correlation.

The R2 value (the "R Square" column) indicates how

much of the total variation in the dependent variable, MI

Revenue can be explained by the independent

variable,Telecom Subscriber.

Model Summary

Model R R Square Adjusted R Std. Error of the

Square Estimate
a
1 .647 .419 .128 2.13720

a. Predictors: (Constant), MiRevenue

This table provides the R and R2 values. The R value

represents the simple correlation and is 0.419 (the "R"

Column), which indicates a high degree of correlation.

The R2 value (the "R Square" column) indicates how

much of the total variation in the dependent variable, MI

Revenue can be explained by the independent variable,

FDI inflow.
 Model Summary

Model R R Square Adjusted R Std. Error of the

Square Estimate

1 .016a .000 -.500 1.14553

a. Predictors: (Constant), MiRevenue

This table provides the R and R2 values.

The R value represents the simple

correlation and is 0.16 (the "R" Column),

which indicates a high degree of correlation.

The R2 value (the "R Square" column)

indicates how much of the total variation in

the dependent variable, MI Revenue can be

explained by the independent variable,

Telecom Revenue.

Model Summary

Model R R Square Adjusted R Std. Error of the

Square Estimate
a
1 .715 .512 .267 89.44204

a. Predictors: (Constant),
MiRevenue

This table provides the R and R2 values. The R value represents the simple correlation and is

0.715 (the "R" Column), which indicates a high degree of correlation. The R2 value (the "R

Square" column) indicates how much of the total variation in the dependent variable, MI

Revenue can be explained by the independent variable, Wireless Subscription.

 Correlations

TelecomRevenu TelecomSubscri
e ber

Pearson Correlation 1 -.646

TelecomRevenue Sig. (2-tailed) .354

N 4 4
Pearson Correlation -.646 1

TelecomSubscriber Sig. (2-tailed) .354

N 4 4

Correlations

TelecomRevenu MiRevenue
e

Pearson Correlation 1 .016

TelecomRevenue Sig. (2-tailed) .984

N 4 4
Pearson Correlation .016 1

MiRevenue Sig. (2-tailed) .984

N 4 4

Correlations

TelecomRevenu FDIInflow
e

Pearson Correlation 1 -.359

TelecomRevenue Sig. (2-tailed) .641

N 4 4
Pearson Correlation -.359 1

FDIInflow Sig. (2-tailed) .641

N 4 4
 Correlations

TelecomRevenu WirelessSubscri
e ption

Pearson Correlation 1 -.650

TelecomRevenue Sig. (2-tailed) .350

N 4 4
Pearson Correlation -.650 1

WirelessSubscription Sig. (2-tailed) .350

N 4 4