Xiaomi topples Samsung, takes the top spot

Samsung lost out to Xiaomi as it held 24.1% of the urban market, compared with Xiaomi's 26.5%, IDC said

Chinese mobile handset major Xiaomi has replaced Samsung at the top position in the country’s urban market. The Beijing-headquartered company, which entered India three years ago, has managed to garner a higher market share in the top 50 cities during the September quarter. 

Samsung, which had been dominating the space for over four years, lost out to Xiaomi as it held 24.1 per cent of the urban market, compared with Xiaomi’s 26.5 per cent, IDC said.

Xiaomi’s rise was under way for a while but the latest feat became possible after it posted an astounding 120 per cent rise in sales during the September quarter. Samsung, on the other hand, posted 15 per cent quarterly growth. Lenovo (10.3 per cent) held on to its position at the third spot. Oppo (5.2 per cent) and Vivo (5.1 per cent) saw their positions change as they replaced one another.

Xiaomi’s rising market share in the top 50 cities bears significance as together they comprise close to half the smartphone market in the country. Delhi and Mumbai contribute one-fourth of the sales in the top 50 cities. Bhopal, Gurugram and Jaipur have emerged as the fastest growing markets, each of them growing at over 40 per cent over the previous quarter.

According to experts, Xiaomi’s product strategy and value for money offerings helped it grow faster than any other contemporary brand. Although Samsung offers a wide range of handsets from basic feature phones to super premium flagship smartphones in its Galaxy and Note series, Xiaomi kept its eyes trained on the fastest growing price segment Rs 8,000-12,000. 

Also, rather than a confusingly  large number of products, Xiaomi’s portfolio is slim. In total, the firm sells less than 15 handset models in India. This allowed the company to channel its energy and funds towards developing better consumer connect.

During the early part of the year, Xiaomi’s Redmi Note 3 topped the charts as the most selling handset model and during the quarter the Redmi Note 4 hit the jackpot. “Redmi Note 4 alone contributed to more than 40 per cent of the volumes and is also the highest selling model within the top 50 cities of India,” IDC said.

Another factor that helped Xiaomi was its renewed focus on offline distribution, which generates over 70 per cent of smartphone sales in India. Xiaomi’s revenue share from offline stores was stagnant at 10 per cent till mid-2016. Of late, it has managed to increase that share to 20 per cent. “Considering the huge untapped demand in small towns, eventually vendors will be forced to tweak their strategies to reach out to customers in these markets,” said Navkendar Singh, associate research director, IDC India.