China’s Xiaomi, the top-selling smartphones brand in India, has infused Rs 3,500 crore ($507 million) into its Indian entity, marking its largest investment into the country since it foray about four years ago.
According to the company’s filings with the Registrar of Companies sourced by paper.vc, Xiaomi Technology India Pvt Ltd has secured the aforesaid investment in two tranches from Xiaomi Singapore Pte Ltd. The first transaction worth Rs 1,500 crore was made in January wherein Xiaomi Singapore subscribed to 3,786 shares of Xiaomi Technology India while the second transaction of Rs 2,000 crore took place earlier this month in exchange for 6,959 shares .
Xiaomi Singapore Pte Ltd owns 99.9 per cent of the Indian entity while the balance 0.1 per cent is held by Xiaomi HK Ltd.
While the company did not disclose how it will use the funds, The Economic Times in its report said that Xiaomi would utilise the funds to enter the white goods space in the country by manufacturing products such as water purifiers, washing machines, laptops and refrigerators. The company may also expand company-owned Mi Home retail stores for a stronger foothold in the Indian smartphone market.
Xiaomi currently operates 26 exclusive stores and few hundred stores through its franchise partners. The company is also heavily reliant on e-commerce platforms such as Flipkart and Amazon for the sales of smartphones.
According to Counterpoint Research, Xiaomi was the leader in the Indian smartphone market with 28 per cent market share in 2018. On the other hand, Samsung, Vivo and Oppo had a market share of 24 per cent, 10 per cent and 8 per cent, respectively in 2018. In terms of revenues, however, South Korean giant Samsung was the leader.
Xiaomi entered India in July 2014, and currently has four offices across Bengaluru, Delhi NCR, Mumbai and Kolkata. It sells smartphones under popular brands like Redmi and Mi. While in recent quarters, Xiaomi has launched smart TVs, air purifiers, and fitness bands, it reportedly gets over 90 per cent of its revenue from the sale of smartphones.
India is a key market for the Chinese company as demand back home is shrinking. But the competition is getting fiercer between both Xiaomi and Samsung as both are eyeing a larger share of the Indian market.
In January, Samsung launched its Galaxy M-series in the affordable and mid-level price segments targeting young millennials. Priced aggressively starting at Rs 7,990, the M-series will compete against the popular Redmi-range from Xiaomi. It is a strong attempt by Samsung to try and regain the top spot in 2019.
Meanwhile, Xiaomi’s most devices are priced under Rs 15,000.