Lei Jun, the co-founder, and CEO of Xiaomi is back in India along with executives from 80+ ecosystem companies. And in a freewheeling chat with select media at the new Xiaomi India HQ office in Bangalore, Mr. Jun acknowledged the demand for devices running Stock Android and said the company is working to bring more Android One devices to the country in the near future.
Without getting into the specifics, Lei Jun hinted at launching Android One-based Redmi smartphones specifically in India. “Yes, we plan to have more Android One devices. Some of our users in India seem to like stock Android, and we are willing to bring in more devices with Android One including the Redmi series“, said Mr. Jun.
“We are sorry”
Acknowledging the issue with regards to the products being out of stock all the time, Mr. Jun said “We want to apologize to our users for the experience. We don’t consider the ‘out of stock’ label as a medal of honour. We are consistently trying to ease the supply-to-demand ratio, but the demand is really high for some of our products“. Mr. Jun specifically pointed out that Xiaomi is finding it tough to meet the demand of two of its latest products – the Redmi Note 5 Pro and Mi TV 4. “We have increased our production capacity by 3X (two factories to six) in the last one year and currently running at full capacity, but with Redmi Note 5 Pro, there is a supply issue with some key components“. He particularly pointed out that a ‘light assorting chip’ which is part of the camera module on the Redmi Note 5 Pro is of short supply. He also said that the demand for RAM has increased within the industry and crypto mining is making it worse.
Manu Kumar Jain, the Xiaomi India Head and Global VP added that except for Redmi Note 5 Pro and Mi TV, rest of the products are on open sale and have no availability issues. And the company is utilizing machine learning to keep away scalpers who buy online and sell offline at higher prices. On the question of certain Mi Preferred partners and resellers charging a large premium in certain parts of the country, Manu Jain said that the company is cutting off the relationship with such dealers as and when they are alerted.
“We want to manufacture the TVs in India”
Mr. Jun was particularly forthcoming with his desire to set up manufacturing plants for televisions in India. “A present, we need to pay almost 20% import duties, so it’s important to manufacture/assemble smart televisions in India.” He hopes to pass on the benefits of reduced taxes back to the customers.
On the question of how difficult to get hold of a Mi TV in the country, Mr. Jun blamed the initial forecast of demand. “We had to double our initial forecast which I thought was extremely aggressive just days after the launch of Mi TV, and currently, our forecast is 2.4 times our initial forecast. There is also the issue of space and logistics when it comes to TVs. We can’t afford to bring more TVs than we can store in our warehouses.”
“Expect more premium devices in the next one year”
One obvious question you get to hear at most Xiaomi pressers is how the company is finding it tough to sell phones beyond Rs 15,000 and how they can beat the market perception. One would assume Mr. Jun to sidestep the question, but he took it on straight. “We are still in our fourth year of operations in India. We have managed to be successful in five categories – Redmi 4A/5A (Rs 6,000), Redmi 4/5 (Rs 7,000 ~ Rs 10,000), Redmi Note 5/Pro (Rs 10,000 ~ Rs 15,000), Redmi Y1 (< Rs 10,000) and Mi A1 (< Rs 15,000). We want to take this step by step. We want to only introduce products which will be a hit in the Indian market. In the next two years, we want to have successful products in < Rs 20,000, < Rs 30,000 and Rs 30,000+ categories.”
He went on to explain why Mi Mix and Mi Mix 2 didn’t do particularly well as compared to others.
“Some people will ask why can’t you bring products like OnePlus in that price segment. But a lot of features and specifications of OnePlus phones are decided specifically for India. Unfortunately, the Mi Mix wasn’t designed specifically for India. It did well in China and globally. So we are trying hard to figure out the specific things needed for India, and by this time next year, you should see some products in this price range.” And jokes, “Hopefully I don’t have to answer this same question about premium phones next year!”
Is Xiaomi considering a smartphone with a notch?
Interestingly, Mr. Jun had a few things to talk about the recent trend of having Notches on smartphones. “Somehow the media in China doesn’t like the idea of the notch on display. What do you think?” When the general consensus amongst the Indian media present was that people are not in favor of the notch for multiple reasons, Mr. Jun said, “It’s indeed a very high-pressure move for all smartphone vendors. People want a full-screen display, but we need to make space for camera, sensors, etc. There is no perfect solution yet.”
And finally, with regards to the offline expansion, Lei Jun said he is very happy with how things have gone till now. “According to IDC, we have 11-12% share in the offline market right now. It’s not as good as our 56% share in the online smartphone market, but I will be happy with 30% share by next year. And in the next two years, my target for Manu is to become No.1 offline smartphone player.“