The festive season is here and smartphones have seen an uptick in purchases. In the third quarter, Samsung topped in sales with a market share of 18 percent, shipping 7.9 million units. Xiaomi India was second with 7.6 million units, according to a media report.
Xiaomi India also rolled out its ‘Tech Se Smart, Dil Se Smart’ campaign, which features brand ambassadors Disha Patani and Pankaj Tripathi.
In a conversation with Storyboard18, Anuj Sharma, chief marketing officer, Xiaomi India, touched upon the genesis of the ‘Tech Se Smart, Dil Se Smart’ campaign, premiumisation in the smartphone category, the evolving target audience, celebrity endorsements and a lot more.
Edited excerpts:
Tell us about the genesis of the campaign ‘Tech Se Smart, Dil Se Smart’?
When we were thinking about the festive season a few months back, we were looking at ‘what Xiaomi brings to the table that nobody else does’. Essentially, whenever one is thinking of Xiaomi, they always think of smart products like smart televisions, smartphones or smart homes. We bring in that tech. So, ‘Tech Se Smart’ comes in from there.
The other aspect of it is linked to Diwali. Diwali is the season of gifting, and sharing of joy. I think it’s also the season of people looking at great deals.
Thus comes the aspect of ‘Dil Se Smart’. You either touch somebody else’s life, or you end up giving something to yourself and feel good overall.
So ‘Tech Se Smart’ is largely about the product. ‘Dil Se Smart’ is about the festive offers and deals that one gets during this time of the year.
When Xiaomi launched in India, it was positioned in the entry-level segment. How have the brand’s offerings evolved over time? Does the brand plan to enter the premium space—the Rs 50,000-80,000 market?
When Xiaomi actually launched, the whole idea was to bring innovation to everyone. It was not necessary to be in a particular price segment. If one is looking at phones, they are obviously entry-level phones. There are a couple of mid-premium phones that we call the Redmi Note series. And this year we actually did launch a flagship phone, which comes with one of the best cameras that one can get. It’s a Leica camera and the phone is called the Xiaomi 13 Pro, which sells at about Rs 79,900.
On the television side, we’ve actually been in the market for just a little over 5.5 years. In that period, for the last 21 quarters, Xiaomi has been the leader.
And on television, it was re-imagining how Indian households watch TV. So, I would probably say that Xiaomi was one of the big reasons why India moved to smart TVs. So, when you think of smart TVs in India, it’s largely Xiaomi and going across the board.
When Xiaomi actually launched, the whole idea was to bring innovation to everyone. It was not necessary to be in a particular price segment. If one is looking at phones, they are obviously entry-level phones.
We’ve got large TVs that are 65 inches and 75 inches. So that’s the second part of it. The third part is one’s life overall. And that’s where the smart home part comes in. So, smart homes are a bit exclusive right now. One of our bestsellers, for example, is a smart robot vacuum cleaner. Those don’t really come cheap, but they come in with a lot of tech that consumers really appreciate.
So, in a way, we are across the board. Whether one is on their phone, whether one is at home watching TV, or when one is looking at the overall quality of life, from air purifiers to smart air fryers to vacuum cleaners, we are covering pretty much everything.
Which is your target group and how has it evolved from a buying perspective?
I guess, things have changed significantly over the last three to four years. From just looking at what was the value in terms of price point that consumers were looking at, now the definition of value has changed a bit. So, all that we went through over the last three odd years … this year, luckily, it’s been a lot more stable. During the pandemic, the other challenges that we were seeing were supply chain and availability issues. That’s all been taken care of.
In the case of consumers, they’ve also started realizing that the value is not just defined by the price, but how it can add more to their life.
So, with that, we have also had to change a lot of our product strategies and marketing strategies as well. The people who were buying products have also matured a bit.
In the case of consumers, they’ve also started realizing that the value is not just defined by the price, but how it can add more to their life.
From a pure psychographics perspective, it’s not just the deal seekers, but it’s also people who are looking at upgrading their overall life.
That sometimes comes with the change of demographics. We are still looking at the early adopters, because we are talking about high-tech products. It’s still limited in that space, but that space itself has grown over the last three to four years.
What does premiumisation mean in the smartphone category? If a player in the mid-range category is offering similar features as one in the high-end category, people still seem to flock towards the high-end product. Why?
When you’re looking at the phone category, a large majority, which is 75-80 percent of the consumers in India, are still buying devices below $200. We can probably take it as below Rs 15,000 in India.
Value has been redefined. It’s not just a sum of its features, but they’re also looking at: Is that coming in from a house that they can trust? Is it bringing anything beyond just the basic specs and features that basically ease their life?’
The mid-premium and then the premium segment is basically then contributing 20-25 percent of the overall market. That area still has a lot of space to grow. For the same features, I think most Indian consumers are smart enough to choose what they think will give them better value.
Value has been redefined. It’s not just a sum of its features, but they’re also looking at: Is that coming in from a house that they can trust? Is it bringing anything beyond just the basic specs and features that basically ease their life?’
I think those aspects have started coming in. Most Indian consumers have also started attaching that aspect to their valuation of a particular product.
How has the smartphone market of India and its audience evolved?
Once a person starts moving into the mid-premium segment and then the premium segment, that’s a segment that has started to evolve, and is looking at differentiated features. From a smartphone perspective, ‘Can I get something that nobody else can provide?’ This is where we have been focusing on the camera part of it. So, we ended up partnering with German camera-maker Leica to bring in Leica Optics.
Our first phone with Leica Optics was launched earlier this year. We’ve also started looking at those unique aspects and differentiated features that we can bring to the market.
What is your take on celebrity endorsements? How has this tool enhanced the brand value of Xiaomi India?
For the first five or six years of our existence, this was the time when the entire smartphone industry was just coming up. We did not have any. The first time we had a brand endorsement was actually towards the end of 2017, which was for a selfie phone.
And with the celebrity endorsements, what ended up happening was we saw an increased connection with consumers in retail especially. For the initial years, Xiaomi was largely an online company. So, we’re seeing improvement in our awareness numbers and in some cases even the consideration for those segments has started moving up.
And then in 2019 we worked for a couple of years with Bollywood actor Ranveer Singh. This year we’ve gone for a more specific play, where earlier this year we signed up Bollywood actor Pankaj Tripathi. This is because he brings in that trust and that aspect of respect that the consumers are looking for.
And we did a tie-up with him for the Redmi line which is more of our mid-premium and value tie-in. And then we also did another tie-up this time with Bollywood actor Disha Patani where it was for our design-focused SKUs.
And with the celebrity endorsements, what ended up happening was we saw an increased connection with consumers in retail especially. For the initial years, Xiaomi was largely an online company. So, we’re seeing improvement in our awareness numbers and in some cases even the consideration for those segments has started moving up.
What consumer and market trends have you seen in 2023 in the smartphone market category?
From a broad trends perspective, I think it’s changed quite a bit.
In the post-pandemic (phase) world, one is obviously looking at the overall value rather than just the specs. The second and probably the biggest thing that’s happened this year is the adoption of 5G. The actual rollout from Airtel and Jio started only last October and it was rolled out in a few cities.
A larger part of cities and towns in India are covered by both of these operators. So, with that, the demand for a handset that has 5G has also kind of gone up and which is where we saw a couple of our devices getting tremendous success. I think the last launch that we did was the Redmi 12 series and that actually brought in 5G under $200. We managed to ship more than a million devices in about four weeks’ time.
For this particular festive season, 5G is going to be one of the key drivers or key reasons why people would buy a new device.
What are some of the festive trends that you’re witnessing this year? How is Xiaomi gearing up for the festive season?
From a product perspective, there are three things that we are seeing. One is 5G. I was just talking about how people want 5G devices that are coming. That’s actually helping a lot in terms of our portfolio and adoption of newer devices that we’ve launched.
The second one is the festive period and the Cricket World Cup happening at the same time. This basically means that more people want to watch content and they want to watch it on larger screens. So, a lot of people are also looking at upgrading in two ways. One is for family viewing, where people are going for a larger TV. Hence, larger smart TVs are seeing an uptick. This time, I think like every year, normally a 32-inch TV is the bestseller. But, this year is the year of 43 inches. We have a 43 inch 4K TV that is seeing a lot of acceptance from consumers. People are looking at a larger display. The third aspect is with Diwali and people going for either a new house or a renewed look.
We are also seeing the adoption of some of our smart-home products. But, one is getting it at a great price because there is a festive offer happening on Mi.com or Flipkart or Amazon or even our retail stores. We are seeing that adoption go up.
While people are looking at new devices, they are also a lot more open to financing. So, we are also experimenting with something called Xiaomi Easy Finance, which gets people whichever device they want in a much easier way. We have just started rolling that out. It’s in beta phase but we are seeing good adoption there.
Who are Xiaomi India’s main competitors? What are the marketing and advertising strategies in place to stay ahead of them?
From a television perspective, I would probably say right from other brands that make televisions to movie halls, they all are our competitors. In fact, one thing that’s changed over the pandemic is family viewing.
In 2010, as more and more people got hold of smartphones, we saw individuals in the family going and watching their own content. So, streaming services were coming in. But with the pandemic, because one was at home, the rise of family viewing started going up again.
So, because of family viewing and the pandemic, a lot of movies started getting released on streaming platforms. It’s created a habit where people are looking forward to watching movies at home. That’s where smart TVs come in.
A larger screen means that one can get that whole movie hall kind of experience. At home, one has got televisions with Dolby Vision and Dolby Atmos built in. So, I guess that the competitive platform is quite wide. But, we are trying to bring that comfort into one’s living room.
In the case of smart vacuum cleaners, there are a lot of big players out there. If I look at smart lights again, there are a whole bunch of players. So, from a technology perspective, we end up competing with a lot of organizations individually.
Xiaomi usually competes in the entry level and mid range smartphone market. Can you share some figures on the market size and Xiaomi’s share in it?
As of last quarter, we continue to be the number one player in terms of smart TVs. I think, from an overall television market perspective, we are at about 11 or 12 percent of all shipments and then this festive season, it should kind of go up. From a smartphone perspective, I was looking at some news reports that came out from analysts. We are at about 17-18 percent of all shipments that are happening.
It’s a fairly competitive place but we are very happy with the progress that we have been able to make this year.
Which of your marketing strategies has been most successful in luring audiences?
Every campaign is special. We are very happy with the Diwali campaign that’s happening. At the online level, we have seen a good success rate from the adoption of smartphones, television and even tablets. So far, I think, the acceptance of the ‘Tech Se Smart, Dil Se Smart’ campaign, both from a consumer perspective and the trade has been fairly good.
Brand ambassadors Disha Patani and Pankaj Tripathi are involved in the campaign and are giving their inputs in terms of getting the best tech product that is ‘Tech Se Smart’. This is followed by making the right choice in terms of getting the best offers from Xiaomi, which is the ‘Dil Se Smart’ part of it. All of it seems to be coming well together.
There are many brands coming up with foldable phones. What are the marketing strategies in place to cater to the needs of the evolving target group?
We have not launched a foldable phone in India yet. We have got a couple of incredible models but we are still trying to figure out the best possible combination before we get into that.
There are three things that are holding us back from introducing a foldable phone. The first one is obviously the price. I don’t think you can get a good foldable phone under Rs 1.5 lakh. This means that you are catering to only that top 0.2-0.3 percent of the overall market. It does not really make too much sense from a Xiaomi perspective considering our vision is innovation for all.
There is a particular price point that we hope to hit. And, if that happens, then we can start looking at a larger market share. The second aspect is because of the technology that is used in foldable phones, durability stands as a question. There are two aspects to durability. One is dust resistance, and the second is water resistance.
This has been really hard to do for all the foldables out there and that ends up leading to a lot of customers having issues with their devices. In certain countries where it’s not too much of a concern in terms of dust, it is manageable. In a country like India, we would probably end up seeing a lot more consumer issues coming up with that, so we still need to test that properly.
Because of the technology that is used in foldable phones, durability stands as a question. There are two aspects to durability. One is dust resistance, and the second is water resistance.
And the third aspect is from a user perspective. Foldable phones are essentially getting almost two phones folding into one. When you do that, it adds thickness and it adds weight. Most people have a threshold of about 200 grams-225 grams. If it goes above that, it starts becoming uncomfortable.
I think we will probably continue our research and development (R&D) processes. Hopefully, we can solve it and Xiaomi will bring in something that makes a big difference to the industry.
Which are the most profitable markets for Xiaomi? How profitable is the Indian market for the brand?
We are a publicly listed company and are listed on Hong Kong Stock Exchange. India is an important market for Xiaomi. That’s why we have been focused on the Indian market for the last nine-plus years now, and we continue to focus on it in a big way.