Expansion in the offline market and adding new online partners through the year, coupled with the large product portfolio and manufacturing capacity to meet consumer demand, have lead to a 150% growth in volumes sales in the quarter, compared to 2015.
“We crossed 2 million plus sales in one-quarter in the third quarter for the first time, compared with our performance last year, we have attained more than 150% growth year-on-year,” Manu Jain, head of India operations said, citing International Data Corporation (IDC). Third quarter this year was the best for the smartphone industry with the highest ever number of smartphones shipped into India – 32.3 million.
“Mi India has been warmly welcomed by users, which is why we are one of the fastest growing brands in the smartphone industry today – one out of every four smartphones sold online was Xiaomi,” he added.
The highest sales are also the reason behind Xiaomi’s leap to No 4 position with 7.5% share – just behind Micromax – in the Indian smartphone market, as per IDC, another first for the company which considers India its most important market after home market China. Xiaomi’s global chief executive Lei Jun expects Xiaomi to become India’s top smartphone brand within five years.
The firm has been selling about 1 million to 1.5 million smartphones every quarter this year, but with the large sale uptick last quarter, analysts expect the company to report its best yearly performance.
During three days of Diwali sale, over 247,000 units were sold through its online site Mi.com – which took them 100 days last year during the same time – and till October 18, its overall sales had crossed 1 million.
Xiaomi started operations in the South Asian market in July 2014 and made a significance presence through its online flash sale model. However, in 2015, it almost went under the radar with few product launches. This year, the company has turned itself around and not only launched five smartphones at affordable prices and Mi air purifier, its first ecosystem product, it increased offline and online partners this year.
Distributors Redington, Just Buy Live, Innocomm, StoreKing and YMS Mobitech, made Xiaomi’s phones available across 8500 retail stores by September this year, up from 1500 in January, by adopting a direct-to-retail model that saved them up to 12% in commissions.
Besides launching its own e-commerce portal, it increased reach through online players Flipkart, Amazon, Snapdeal, Paytm and Tata CLiQ, what together covered 40% of the country, allowing more users to order phones thus increasing sales. In July-Sept period, Xiaomi was the No 2 player in online sales, as per IDC, after Lenovo-Motorola, on the back of 880,000 units of Redmi Note 3 being sold.
Redmi 3S and Redmi Note 3 contribute significantly to the online smartphone market with nearly 50% market share among top 10 phones in India, the company said quoting IDC data.
The online and offline sales were backed by increasing manufacturing capacity – through contract manufacturer Foxconn – such that 75% of the phones sold in India are made from the Sri City factory in Andhra Pradesh. While Xiaomi’s own employee base has tripled to 150 within the year, after sales service centers were doubled to 160 plus to address consumer concerns.