Xiaomi has been the number one player in the Indian mobile phone market from late 2017 to 2019 as per reports from Counterpoint Research as well as IDC. This has been possible on the back of the budget and mid-range smartphone offerings which have repeatedly delivered fantastic value for money. Another factor that has helped Xiaomi retain its number one spot is the move from being an online-only brand to the offline market. However, if you look at the top 5 smartphone brands in India, you will notice that three out of the five brands are owned by the BBK group. This essentially means that the BBK group which owns OPPO, Vivo, OnePlus and Realme brands holds the largest market share in India and not Xiaomi. It's just the beginning of 2020 and from the way things are progressing, it seems both Xiaomi and BBK group are getting ready to go to open war with each other.
If we go over the Indian smartphone market landscape in the past five years, one can see that Xiaomi and BBK group has constantly been trying to cut each other down. January 2014 was when BBK entered India with its OPPO brand which focused mainly on the offline market and received a good response. Xiaomi arrived next in July 2014 but with an online-only model and instantly gained unprecedented sales with its first device itself. This made the BBK group sit up and pay attention to the evolving online market in India and as a result, we saw both OnePlus and Vivo arrive in India in December 2014. OnePlus catered to the niche power users while Vivo was for the masses at attractive pricing in the online and offline space. Over the next few years, Xiaomi topped the entry-level and medium price market with its Redmi series while its Mi series of premium phones didn’t gain too much traction and was eventually abandoned for the Indian market. On the other hand, BBK group’s three brands garnered great success – OPPO and Vivo did great in the entry and mid-level range while OnePlus made its mark in the premium segment.
Head-to-head competition
Trouble is that everyone wants a bigger slice of the pie and since the pie is the multi-billion dollar smartphone market of India, both Xiaomi and BBK group have been trying to take the other’s market share. BBK group forayed into the online segment with Vivo and OPPO to take on Xiaomi and Xiaomi went into the offline market to win over market share from Vivo and OPPO. In 2017, Xiaomi experimented with a new sub-brand, POCO, which was a power user device to compete with OnePlus. While there was only one device launched in the sub-brand, it did impact OnePlus’s positioning. BBK group didn’t’ sit idle – they launched a sub-brand, Realme in 2018 under OPPO, which went into a head-to-head competition with Xiaomi by doing exactly what Xiaomi does ranging from aggressively priced smartphones, fan events, and even marketing strategy. Seeing the success it received, BBK group spun it off as an independent brand in 2018 itself.
As per IDC, Realme had 14.3 percent market share in Q3, 2019 and this is something that shook up Xiaomi. Xiaomi, which saw a continuous growth in the Indian market with its aggressive pricing, no longer had the exclusivity of offering a smartphone with the best specs and features in the entry-level and mid-range price segment. As it stands today, Realme has a competing device for each of Xiaomi’s current smartphone portfolio under the Redmi brand and this is impacting Xiaomi’s business in India as its market share has become stagnant.
Xiaomi is not the one to back up from a fight and for 2020 it is laying down its plan to win more market share with the same multi-brand approach as the BBK group. Xiaomi made Redmi into a separate brand in 2019 for China that will focus on entry-level and mid-range devices while the MI brand will focus on premium range. In India, since the Mi range was not available, there were no official changes made to the brand and it continues to sell under Xiaomi India. But for 2020, Xiaomi India is gearing up to take the fight to the BBK group.
A week ago, Raghu Reddy, Head of Categories and Online sales, Xiaomi India, showcased the company’s 5G concept smartphone, Mi Mix Alpha, with the Indian media at a select roundtable meet. At the meet, Reddy also shared the news that Xiaomi India is working on bringing the Mi series smartphones back and that we should see the premium devices soon in India. Keep in mind that even though the Mi series phones never came to India, they always saw traction and demand from interested consumers in India – this demand is one of the reasons why a lot of Indian YouTubers imported the Mi series device from China for unboxing and reviews. So who does this impact the BBK group? Considering that OPPO has been gaining a foothold in the premium segment with their Reno series, the launch of Mi series can be counted as a head-on competitor to the brand by Xiaomi.
The next big-news followed mere days later as Manu Kumar Jain, Managing Director, Xiaomi India, announced on social media that POCO will now be an independent brand. If it will be structured under the Xiaomi umbrella or it’s a standalone company is not clear at the moment. POCO as a brand gained its share of fans with just one device in its portfolio, the POCO F1 and consumers have been speculating for the launch of the second device under the POCO brand for the whole of 2019 with no answer from any spokesperson. It has gained so much hype that the question “Where is Poco F2?” can be found on almost all social media posts by the company spokespersons.
The announcement of POCO becoming an independent brand now is a clear indication that the goal here is to use the popularity of the POCO brand in India to disrupt the positioning of OnePlus and to eat into its market share.
Aggressive moves
Obviously, BBK group is also not the one to back away from a challenge. As it stands, Vivo’s premium sub-brand IQOO from China is rumoured to be launching in India in March as per 91Mobiles. The announcement came just two days after POCO was announced as a separate brand and is the BBK group’s reply to Xiaomi India’s announcements. IQOO smartphones are similar to POCO in terms of delivering top-end specifications at an aggressive price. So if Xiaomi uses POCO to undercut OnePlus in terms of pricing or features, BBK group can use IQOO to undercut POCO in a similar fashion.
At the moment, the brands under the BBK group makes up for more than 50 percent market share in India. Xiaomi India is needed to make big changes to stand up to the rising competition and they have started strong in 2020 with two big announcements back to back. Opting for a similar tactic as its biggest competitor is a smart move and if Realme can grow by being inspired by Xiaomi’s strategy, then Xiaomi can also grow by using BBK group’s multi-brand strategy. However, the BBK group is also ready to counter Xiaomi’s aggressive moves and 2020 is setting up to be an interesting year for the smartphone market. The back-to-back announcements are Xiaomi India’s bugle call as they go head-on with the BBK group and irrespective of whichever side comes out on the top, it’s the Indian consumer that will get to reap the benefits with some great smartphones being available at attractive pricing.
Karan Bajaj is a senior tech journalist based in New Delhi.
First Published: Jan 22, 2020 6:00 AM IST
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