**Xiaomi Shifts Focus to Premium Smartphones in India**
Xiaomi is redefining its strategy in the competitive Indian smartphone market by emphasizing revenue and profitability, particularly in the mid-to-premium segment of devices priced above ₹20,000. This shift comes as the company, which dominated the Indian smartphone landscape from 2017 to 2022 through budget-friendly sales, faces challenges in maintaining its market share.
According to estimates from Counterpoint India, Xiaomi’s market share in volume terms dropped from 24% in 2021 to 17% in 2024. The company’s chief operating officer, Sudhin Mathur, highlighted the importance of adapting to changing consumer preferences, which now lean towards higher-end features. He stated that while Xiaomi once prioritized being the market leader, the focus is now on building brand relevance in the premium segment.
Mathur emphasized that the company aims to enhance user experience through improved software and advanced artificial intelligence (AI) capabilities, making these features accessible at more affordable price points. He noted that the smartphone industry is expected to see flat volume growth in 2025, prompting Xiaomi to recalibrate its approach.
Despite its historical strength in the budget segment, analysts indicate that Xiaomi is experiencing a decline in volume market share due to intensified competition and challenges in offline retail presence. Tarun Pathak, research director at Counterpoint India, pointed out that Xiaomi’s sales predominantly come from the mass market (sub-₹15,000). To successfully penetrate the premium segment, the company must enhance its offline retail strategies and refine its brand messaging.
Pathak also mentioned that Xiaomi’s strategy of focusing on products with a higher average selling price (ASP) has proven effective in China, where it bolstered its retail image, particularly following the launch of its electric vehicle SUV. However, in India, Xiaomi will face stiff competition as various brands adopt similar premiumization strategies, offering feature-rich products at higher price points.
In conclusion, as Xiaomi pivots towards the premium smartphone market, it must navigate a landscape filled with competition while striving to maintain its brand identity and appeal to evolving consumer demands.
**FAQ**
**Q: Why is Xiaomi shifting its focus to the premium smartphone segment?**
A: Xiaomi is shifting its focus to the premium segment to adapt to changing consumer preferences for higher-end features and to enhance revenue and profitability amidst declining market share in the budget category.
