Xiaomi to develop e-commerce business model

Xiaomi, the world's third-largest smartphone maker, is developing a full-fledged e-commerce business model for its phones and other devices which it plans to introduce soon in the Indian market.

Xiaomi India head Manu Kumar Jain told reporters here on Friday that they are looking to invest in few startup technology companies to develop an eco-system.

He said investment would be made in setting up e-commerce business including warehouse and logistics. He, however, did not disclose the quantum of investment.

Currently the major portion of the Chinese smartphone maker's sales come through its portal (me.com) and channel partners Flipkart, Amazon and Snapdeal.

Xiaomi will also be investing in expanding research and development centre in Bengaluru, setting up a manufacturing facility and expanding exclusive sales and service network.

The R&D centre in Bengaluru currently employs only four professionals but it will have a 100-member team by the end of this year. The team will design new mobile technology features for Indian consumers.

Jain said the company was in talks with various state governments for setting up its manufacturing facility. It plans to make the phones through a contractual manufacturer.

Xiaomi has sold over a million smartphones in the first four months of its entry into the Indian market in July 2014, making it the fifth-largest player in the domestic market with a share of four percent.

The five-year-old company, which rolled out its first smartphone in August 2011, sold 61.1 million units globally last year, as against 18.7 million units in 2013.

The company is also looking at introducing non-phone products like smart Internet-connected devices in the Indian market. It plans to launch Xiaomi Mi Box, a tiny box that turns an ordinary TV into a smart TV, by the end of current calendar year. Xiaomi smart TV will be available next year.

Jain said Xiaomi was also aggressively looking at parking investments in Indian startups, especially in the areas of Internet technology and connected devices.

One of the top angel investors in China, it has already invested in over 20 startups in the home country.

Xiaomi's founder Lei Jun had in February this year secured $160 million for his China-focused venture capital fund Shunwei China Internet Fund to invest in more Chinese startups. Founded in 2011, the Shunwei China Internet Fund currently has over $900-million assets under management.