Xiaomi Shifts to Premium Segment in India Amid Sales Slump, Focuses on IoT

In response to a significant dip in smartphone sales and slipping out of India’s top five smartphone brands, Xiaomi is shifting its focus towards premium products and sustainable growth. The Chinese electronics giant has launched a new value-centric strategy in India, emphasising profitability and brand premiumisation over high-volume sales.

Sudhin Mathur, COO of Xiaomi India, told Moneycontrol that the company is transitioning from a mass-market to a value-first approach. “We are no longer chasing volume or top position. The priority is to build a stable, profitable, and long-term business in India,” Mathur said. He added that while the shift is challenging, it is necessary given the evolving Indian market, which is steadily moving towards higher average selling price (ASP) segments.

Xiaomi’s Q1 2025 performance reflects the urgency behind this strategic change as company’s smartphone shipments dropped 38% year-on-year to 4 million units, according to Canalys. The wholesale revenue has also declined by 45% to $47.2 million. As per the data of IDC, the market share of Xiaomi has also dipped to 7.8% from 12.8% in first quarter of 2024.

To cover this up, the company has streamlined its smartphone portfolio and started manufacturing tablets locally through DBG Technology and smartwatches via Optiemus. Mathur revealed that both Xiaomi and Redmi tablets are now being made in India, and all future smartwatch production will also be domestic. The brand is focusing on select categories like tablets, TVs, and wearables — seen as growth drivers under its broader IoT strategy.

Mathur mentioned that Xiaomi is collaborating with EMS partners such as BYD, Dixon, DBG, Optiemus, and TCL, and these partnerships may eventually increase local sourcing and value addition. However, on the EV front, he confirmed that Xiaomi’s electric vehicle plans are restricted to China for now, with no immediate India launch.

Addressing concerns from retailers, Mathur assured that Xiaomi’s omnichannel model ensures price parity across platforms, with none of its retail partners exiting the network. Despite recent setbacks, he remains confident that Xiaomi will regain momentum — not by chasing the top spot, but by becoming a stronger, value-driven brand in India’s evolving tech landscape.

Source: Moneycontrol