Xiaomi makes worry to Samsung by their latest updates


Xiaomi  which overtook Samsung to become the leader in the Indian smartphone market, has just invested Rs 3,500 crore into its Indian entity, the highest by the Chinese company since it entered the country over four years back.

As per regulatory filings with Registrar of Companies, Xiaomi infused the money into Xiaomi Technology India in two tranches this year: Rs 2,000 crore on March 1 and Rs 1,500 crore on January 17. The firm, counted among the world’s largest technology startups, did not say in its filings where it would use the funds.

Two senior industry executives said Xiaomi would utilise the funds to enter the white goods sector — such as water purifiers, washing machines, laptops and refrigerators — as well as to expand its company-owned Mi Home retail stores to sustain the leadership in the Indian smartphone market.

This fund infusion comes at a time when Samsung has upped its smartphone strategy in India by forsaking profit margin in multiple new smartphones in a desperate attempt to win back leadership.

The money has been infused by the holding company, Xiaomi Singapore Pte Ltd, which owns 99.9% of the Indian entity — the balance 0.1% is owned by Xiaomi HK Ltd, which did not make any fresh investment.

Under the first transaction in January, 3,786 shares of Xiaomi Technology India were offered to the holding company at a premium on a rights basis, while for the second one, in March, 6,959 shares were allotted.

Xiaomi India till now has been conservative in spending, since it relied heavily on an asset-light model and has been ploughing back whatever resources it was generating in the country.

The company had primarily grown sales in India by relying on online sales in Flipkart and Amazon where operating expenses were much lower than selling through brick-and-mortar stores, while betting on digital marketing and word-of-mouth publicity.

Xiaomi also does not own any manufacturing units in India, since it contract manufactures smartphones, televisions, power banks and accessories. An email sent to Xiaomi India did not elicit any response as of Sunday press time.


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