Push towards premium is a journey, and we’ll persist: Xiaomi’s Muralikrishnan B

After successive tough few quarters that saw Xiaomi lose significant chunk of their market share, Muralikrishnan B, president of Xiaomi India, decided in July 2023 that it was time for a no-compromise approach towards reconstructing the tech company’s India business.

“At the beginning of 2023, is when we realised a few things haven’t gone as planned, and that we have to execute a reset, refresh and recharge. We went with a clearer and cleaner portfolio focusing on offline retail channel growth, 5G growth and ensuring that the experience fundamentals are strengthened,” Muralikrishnan explains, in a conversation with HT.

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“There used to be a time when market share numbers and volumes used to be super important for us. But now I think it is more important to be the preferred choice of customers and there is a lot of work for us to do,” he added.

The Redmi 12 5G launched in August, which was India’s most inexpensive 5G phone at the time (priced around ₹13,000), had already sold 3-million units by November. There’s also the Redmi Note 13 series, a troika that emphasises Xiaomi’s premiumisation push. Earlier in February, after completing a month of sales for the Redmi Note 13 ( ₹17,999 onwards), Redmi Note 13 Pro ( ₹25,999 onwards) and Redmi Note 13 Pro+ ( ₹31,999 onwards; pivotal in taking on the likes of the OnePlus 11R and Nothing Phone (2) at the time), Xiaomi confirmed they’d raked in ₹2,000 crores worth of revenue. Though they didn’t reveal exact sales numbers or share skew between the three phones.

“I believe all the efforts we have taken in building traction with the offline retail channels, and the foundation has been laid to deliver to the premiumisation journey,” Muralikrishnan said.

Is there a case for reconfiguring Xiaomi’s own stores to better showcase the premium devices?

“There are continued discussions on how to enhance the planogram, a retail terminology, so that the pride of place in experience can be given to these premium devices,” said Muralikrishnan.

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Numbers indicate the change in approach is bearing fruit. If we are to weigh Counterpoint Research India Smartphone Shipments Market Share data, Xiaomi’s market lead with 21% share in Q3 2022 (Samsung was second, with 19%) dipped to an 18% share in Q4 2022 (Samsung went ahead with 20% share while Vivo level-pegged). In Q1 2023, the share further dipped to 16%, followed by a further reduction of the share of the pie on Q2 2023 (now 15%). The first signs of recovery were visible in Q3 2023 with the share increasing to 17% (Redmi 12 5G’s impact in latter part of the quarter cannot be underestimated) and Xiaomi’s clawed back some more deficit in Q4 2023 to now hold 18% share.

It’s not just one research firm bringing bullish about Xiaomi’s turning fortunes. CyberMedia Research (CMR) estimates India’s overall mobile shipments grew 29% year-on-year in Q4 2023, Xiaomi (19%), Samsung (18.9%), and Vivo (16%) lead. Before the big decline in early 2023, Q4 2022 also had Xiaomi cornering similar market share – the big difference now is, CMR estimates Xiaomi’s share is now made up of a 19% growth in number of units shipped too. That’s more phones sold, too.

More phones, higher priced phones

Xiaomi wants to sell more expensive phones too, something we often refer to as premium. They’ve tried before, but the timing was perhaps more unfortunate than anything else – first attempts with the Mi 10 and followed by the Mi 11 largely coincided with the pandemic era. Appetite for spending beyond the assured, was limited, and Xiaomi didn’t then have the appeal in the premium space. A lot has changed since then. The fact that everyone is now waiting to see how the Xiaomi and Leica photography partnership unfolds, with the upcoming flagship, the Xiaomi 14 Ultra.

What’s the appetite now, for Xiaomi to attempt the premium push again?

“The appetite is huge. We are 10 years young in India, and we should continue to remain hungry for growth. If the market is getting increasingly premium-ised, that is a direction that we will take,” Muralikrishnan is very clear Xiaomi has the stamina and persistence needed to figure more prominently in the premium phone space in the country, over the next 12 months and beyond.

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“We realise it’s a multi-year journey. Maybe it will take two years, maybe will take three years. We already have the experience from China to fall back upon. There is a clear appetite to launch multiple products delivered to the connected ecosystem and enhance the experience, definitely exists. I can say with confidence,” he adds.

There is a need for Xiaomi to break through into the premium price bands, that is around ₹50,000 and above. There’s data which suggests that’s where the growth is, as well as possible margins. The CyberMedia Research (CMR)’s India Mobile Handset Market Review Report for Q4 2023 indicates that year on year, the > ₹50,000 priced phone segment recorded a significant growth of 65%, compared with the same quarter the year earlier.

Software, Xiaomi understands more so now, plays a big role for the more discerning buyer. The new HyperOS software, gradually lining up to replace the MIUI operating system in the company’s smartphone and tablet portfolio, not only has a completely new core to build with but is comparatively considerably more refined in terms of a user’s interaction with it whilst taking cues of minimalism that’ll hold it in good stead when competing for attention with Samsung’s One UI, OnePlus’ OxygenOS and even Nothing’s Nothing OS.

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It isn’t in isolation. Remember, Xiaomi teased the SU7 electric car in late 2023? That’s very much playing a pivotal role in software development, and will have an inspiration certain HyperOS functionality, in the future. As it will, for smart home and ecosystem devices. This is what the company calls the Human x Car x Home Smart Ecosystem.

“That’s one advantage of being part of this broader Xiaomi ecosystem which is present in over 100 markets. Input from each of those markets always come in and are factored in by our product team. Even for televisions and other ecosystem devices. There is no one single silver bullet here,” says Muralikrishnan, before adding, “It depends on multiple conversations, perspectives on how to continue moving the needle in terms of making the experience better.”

AI in phones, isn’t new

Something that amuses Muralikrishnan is the sudden excitement about AI, or artificial intelligence, phones. Everyone’s now rushing to add more generative AI features and hyping AI features to sell their latest smartphones. “Generative AI has definitely caught the imagination of the public at large. But, again, while I’m not dismissing the power of generative AI, the fact remains that AI as a feature and capability has been inherent in smartphones for many years now,” says Muralikrishnan, with a smile he can barely hide.

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He goes on to illustrate why he’s saying, what he’s saying. “Today smartphone photography is a lot about AI such as portraits and edge detection, perhaps even night mode. There is just so much AI if you talk about processor or game boost modes, which thread to prioritise, battery optimisation and RAM management,” Muralikrishnan illustrates some examples.

“So, for us, when suddenly somebody talks saying ‘hey look, this is AI powered and so on,’ my reaction is but smartphones have always been AI powered for many years now? I just find it a little bit difficult to digest it, but it’s great marketing,” says Muralikrishnan, still smiling. Catching the upward trajectory with smartphones, it has certainly helped lift the dark clouds.

Tablets in focus, but no PCs for now

Xiaomi’s tablet focus in 2023 is steadily paying dividends, something numbers also indicate. Data by Statcounter for India’s tablet market share gives Xiaomi a 4.26% market share in January 2024. It may not seem much at first glance, but to put this in perspective, the January 2023 market share was 2.16%. The powerful Xiaomi Pad 6 and the ultra-affordable Redmi Pad, it may be safe to say, have helped take a lead in the battle with OnePlus’ tablets, the OnePlus Pad and OnePlus Pad Go.

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Credit where it is due, this competition is what has sparked a relevance for Android tablets, often paired with keyboard accessories, as potential productivity device alternatives to the laptop and the smartphone. “The aspirational Indian is not a single device user anymore. They have multiple devices from different use cases. The growth of content consumption specifically has driven a fresh increase in demand for tablets. We’d love to double down on that strategy and accelerate momentum in that specific segment,” says Muralikrishnan.

Many of us remember the company’s first portfolio of laptops, at a time when the PC market found relevance due to forced remote working. The company has since slowed down investments in this segment, amidst consolidation elsewhere. That’s not likely to change in the next year. “We will continue to focus on tablets in that entire segment, because we believe content consumption is a great use case and tablets with the form factor and kind of power and screen sizes they have, just hit the sweet spot,” says Muralikrishnan. If you were hoping for new Xiaomi laptops with Windows 11, perhaps even the Xiaomi Book S 12.4 form factor, don’t. At least for the foreseeable future.