Roll No.

Name
S004 Alok Kumar
S010 Apoorv Sarvesh
S035 Jaibihari Singh
S067 Pratyush Kumar
S084 Shaily Gogia
S092 Sumana Biswas
S104 Vikash Kumar Jha
Date: 24 August 2023
Can beaten Xiaomi reclaim its crown? One Pager Summary

Part 1: Introduction Manu Jain, the head of Xiaomi in India had claimed while joining the company
that they would build a brand like no other and that their devices would sell themselves. And they
did. Xiaomi cracked the Indian market with its flash sales strategy. In 2016, the company crossed a
billion dollars in revenue and in 2018, it sold over 41 million units, toppling Samsung to become
India’s No.1 smartphone brand.

Part 2: The Rise Xiaomi’s rise was fuelled by a number of factors coming together. The company
worked on high-demand low-supply mismatch through its flash sales model, which created
exponential word-of-mouth marketing for the brand. By the time it launched in India, it was already
known as the ‘Apple of China’ and capitalized on this by launching its first device, the Mi3, in July
2014. The go-to-market strategy was through digital marketplaces and the first lot of 10,000 phones
sold out in minutes. Xiaomi got its product strategy right by riding on the experience from China
where 4G had already started. They were able to stay ahead of rivals by offering features such as
dual and triple cameras, better chipsets, and more storage memory. Even the wave of anti-China
sentiment following the clashes in Galwan did not impact its prospects much. Other companies did
not anticipate online sales to take off in the way they did, and Xiaomi was able to capitalize on this.

Part 3: The Fall However, Xiaomi’s fall has been equally dramatic. By the December quarter of 2022,
Samsung had reclaimed its position as the top smartphone brand and Xiaomi’s market share
continued to slide in the first two quarters of 2023. The company is facing multiple headwinds,
including regulatory pressure from the Indian government, a shift in the phone market towards
more premium smartphones, strong demand in offline stores (an area considered to be Xiaomi’s
weakness), and an exodus of executives. In December 2021, the income tax department carried out
searches on tax evasion charges and in April 2022, the enforcement directorate questioned Manu
Jain on Foreign Exchange Management Act violations. All this happened at a particularly bad time for
the company as demand for smartphones began to taper.

Part 4: The Future A new management team is in place and a bounce-back strategy is being chalked
out for 2024. However, rivals such as Vivo are not sitting idle and are looking to capitalize on
Xiaomi’s struggles. The big question is whether Xiaomi can repeat its past success and reclaim its
crown. The sales mix of smartphones changed, with entry-level phones (where Xiaomi ruled)
becoming a declining market. The company’s product portfolio itself was bloated and they missed a
trick by not adequately spending on brand building to lure premium buyers. Xiaomi’s recipe for a
comeback is built on fixing all the issues it is facing, starting with decluttering its portfolio and
becoming a leaner and more nimble organization while expanding its offline footprint. The company
is also increasing its focus on affordable 5G handsets and has expanded its offline presence. The
company claims to have made good progress towards localization in phone assembly, with a goal to
increase value addition by 50% by broadening and deepening components sourced locally.

Part 5: Conclusion Xiaomi is focusing on stabilizing its operations first instead of driving the highest
volumes. Its new strategy of focusing on 5G in the affordable segment seems to be good, but this is a
very crucial period for the company and could be one of the most challenging. To bounce back,
Xiaomi will need many more successful days like when the Redmi 12 5G went on sale on Amazon
India and sold out on the first day itself.

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