Xiaomi, the smartphone brand that is such a hit in China, is making its move in the other giant Asian market, India. Flipkart, the e-commerce site that is a local rival of Amazon.com, is the exclusive seller of Xiaomi phones in India, promoting the Xiaomi Mi3 mode as “the fastest Mi phone ever.” The phone sells for 13,999 rupees ($228), but in order to buy it, Flipkart shoppers need to register in advance. That’s not so easy. “Registration for Mi3 sale is closed,” according to Flipkart.
Getting other Xiaomi phones is no simpler. Flipkart yesterday conducted a flash sale of Xiaomi’s Redmi 1S phone for 5,999 rupees ($98). “Beat the rush, improve your odds!” Flipkart advised, reminding would-be buyers to register in advance and log in two to three hours before the scheduled start of the sale. Over 400,000 people registered, but they needed to act fast to get a Xiaomi phone. Once the sale started at 2 p.m., it lasted all of four seconds before the supply ran out, says Hugo Barra, Xiaomi’s vice president in charge of international markets.
India’s consumers, even more than their counterparts in China, are very conscious of both price and quality, says Barra. “They are without a doubt the most demanding users that we have encountered,” he says, “on product features, value for money and overall quality of service.” Not that he’s complaining. Consumers are demanding, Barra is quick to add, “in ways we are really excited to see.”
Xiaomi, which has expanded to eight markets in Asia, started selling phones in India in July—and only through Flipkart. Unlike in other markets, Xiaomi doesn’t conduct sales via its own website. Still, India is already its second-largest market, behind China, and the flash sales indicate the Chinese company is creating in India some of the same sort of buzz it has generated in China. The difficulty of getting a Xiaomi phone is an important part of the brand’s success, says IDC analyst Bryan Ma. “The measurement of sales for Xiaomi in India seems to be in units per seconds, rather than units per quarter,” he says. By selling out so quickly, Xiaomi has succeeded in turning its phones into “a rare item that people desire.”
Taking advantage of its online success, Xiaomi is planning its next moves in India. Barra, formerly of Google (GOOG), on Monday announced (via his Google Plus account) that another ex-Googler is joining Xiaomi. “The one and only +Jai Mani (aka J$) has just joined the Mi India team as our lead product manager,” Barra wrote, adding, “you’ll remember Jai from his memorable on-stage demo performances at Google I/O and Nexus launches.”
The hire “speaks to the scope of Xiaomi’s customization effort as it expands into new markets,” Bloomberg Intelligence analysts John Butler and Matthew Kanterman wrote in a report published on Tuesday. For the Chinese company, the ability to tailor its user interface for different markets “should help it to gain share from rivals Samsung, Huawei and others.”
There’s still a lot of ground for Xiaomi to cover. In the quarter that ended in June, Samsung (005930:KS) shipped 29.3 million smartphones. While the Korean giant remains the undisputed leader in Android phones, its shipments for the quarter fell 23 percent, compared to the first three months of the year, according to data compiled by Bloomberg, and dropped 26.5 percent compared to the same period in 2013. Meanwhile, Xiaomi shipped 5.4 million phones in the second quarter, up more than 25 percent from the previous quarter and 157 percent higher than its shipments in the second quarter last year.
What of those consumers who managed to register for Tuesday’s flash sale in India but weren’t fast enough to buy a Xiaomi phone? They’ll get a second chance on Tuesday, when Xiaomi holds its next sale, but they’ll need to restart the process. “Registrations will not be carried over,” Flipkart warned on its site. “You need to register again for the next sale.”
