“MI fans are the core of our marketing primarily driven by social media”: Manu Jain, MD, Xiaomi India

Manu Jain, VP, Xiaomi and Managing Director, Xiaomi India in an exclusive talks with PC Quest shares insights about Xiaomi’s operations, focus areas and plans in India

Manu Jain, VP, Xiaomi and Managing Director, Xiaomi India

What are some of the key focus areas for Xiaomi in India? What will be your market share currently in India?
India is the world’s second-largest smartphone market by users and is projected to generate a billion smartphone sales in the next five years. It is currently a 300 million user base smartphone market. Our company’s vision is “Innovation for everyone” and our CEO Lei Jun believes high end technology should not cost a fortune. We will continue to launch high quality devices, in addition to expanding our ecosystem category. One of the most important criteria for any smartphone we launch is that each executive in the company should be able to use it as their primary device. Our long term goals are not limited to product.

Earlier this year, our CEO Lei Jun came down to India and after spending a week in India - we mutually shortlisted three focus areas which are of core importance to us. Doubling our India efforts : manufacturing, service centers, team size etc
• Increased focus on quality
• Increased availability of our products
Further, we are always seeking ways to improve our after-sales and customer care experience. Currently, we have 500+ authorized service centers across 350+ cities, 2 mother warehouses and 26 sister warehouses, 3 repair factories and 2 call centers. Xiaomi is India’s #1 online smartphone brand with more 17.2 % market share and #2 overall smartphone brand with 46.7% market share as per IDC, Q2 2017.

What are the different models you have in the three categories—budget, mid-range and high-end?
Xiaomi has two families of phone, namely the Redmi series and the Mi series. The Redmi series consist of budget range phones, whereas the Mi family consist of both mid range as well as the high end phones.
Our focus is basically to provide consumers with best in class technology at affordable prices, therefore we have phones starting from Rs. 5,999 to Rs. 16,999. Redmi series at present comprises of phones starting from the range of Rs, 5,999 (Redmi 4A). The category also has some of the most popular Xiaomi smartphones such as Redmi Note 4, Redmi 4. Redmi Note 4 after shipping 5+ million smartphones in 6 months is highest shipped smartphone in a quarter in the history of smartphone market in India (IDC Q2 2017). The Mi Family of phones consist of the Mi Max 2 currently, which is priced at INR 16,999.

Technology wise, what will be the USPs of Xiaomi phones over your competitors?
At Xiaomi, we believe in making innovation available to everyone with products that feature cutting edge technologies. This is supported by a unique business model that allows us to be one of the
fastest growing consumer technology companies. We create high quality innovative products that make the benefits of technology and ubiquitous connectivity accessible to everyone. We hold ourselves to very high standards, no matter whether it’s in product quality, user experience or after-sales service. However, one element which strings it all together are our Mi Fans. Mi Fans are the core of our
marketing approach which is driven primarily via social networks and communities. At Xiaomi, we talk to our fans like friends and family by involving them in the product discourse.We talk to them like friends and family via social channels, Mi Community, social channels and this helps us in spreading our story via word of mouth. We also request our fans to provide feedback to us directly and try and incorporate the feedback to elevate our consumer experience. All these things have helped us strike a chord with Indian consumers who are looking for innovative, value for money products.

What are Xiaomi’s marketing plans in terms of TV commercials and print/digital advertisements?
We are a very different company in terms of marketing culture. From day one, Xiaomi has adopted a very unique marketing strategy that is different from other tech companies. We have focused on cultivating loyal fans who then help to promote Xiaomi to their friends, family, classmates, colleagues, and fellow netizens. And we are constantly working to keep those people engaged in conversations that help us hone our products and to create new ones. We have developed MIUI forums, community forums, fan
clubs and a strong social media following. We have an active Mi Community with more than 1+ million daily active users who interact with us on a regular basis. We have 19 chapters of Mi Fan Clubs across India. We have taken small steps into traditional advertising with few outdoor hoardings and digital advertising but the main focus is still organic word of-mouth marketing via our strong Mi Community.

Mi Community is now our home for Mi fans, where we bring together Mi fans and Xiaomi employees in a multi-channel environment, both online and offline, to encourage open feedback and participation across all communities. We invest heavily in communicating with our fans and giving back to our community; It is
essentially the secret sauce for our marketing.

Please update on your R&D base in India and what is happening here?
India is the most important and largest market for Xiaomi outside China and it will continue to be a priority market for Xiaomi. Currently, our R&D center is based in our HQ in Bengaluru which drives incremental software customizations for our Indian audiences.

How much does Xiaomi plan to invest in brand development in India?
We spent our first two years building a strong foundation and received a lot of love from our Mi Fans in India. This year will be all about doubling our efforts in India,  right from warehouses, employees, service centres, call centers, factory and production. Today, we are the dominant player in the online segment with more than 50 percent market share (as per IDC).
Recently, we launched our fourth Mi Home store in India and we plan to set-up 100 more Mi Home store in the next 2 years. Xiaomi has been online focused primarily till date.
How are you looking to replicate the efficiencies of your online business to offline sales through the launch of physical stores, the Mi homes?
Mi Home is a place for Mi Fans to hang out, interact with each other and experience the latest Xiaomi products. In addition to this, it will also give Mi Fans an opportunity to buy all their favorite Mi products under one roof. Through this launch, we are using the
lessons learnt from operating a very successful and lean online channel to offline retail via our Mi Home stores. Mi Home stores are built on our Internet+ new retail concept, and will have efficiencies similar to the online channel. We will provide a phenomenal user
experience, where Mi Fans will be able to browse and experience our products first-hand at their leisure, before making a purchase.
What are your plans on enhancing your channels and distribution in India. Xiaomi is an internet company and we started off as an online player. We believe in an internet way of working even for our offline distribution model in India. We are now expanding into the offline retail space with our New Retail model. While we enjoy a market share of nearly 50% in the online smartphone market, the overall online market space constitutes of only one-third of the overall market in India. We started building our offline business aggressively from Q1 2017. We have a three pronged strategy for the same which involves our Large Format Retailer partners, Mi Preferred Partner stores and our own Mi Home stores. Currently, we have 12 LFR partners across 12 states: Sangeetha, Poorvika, BigC, Lot, Vijay Sales, Univercell, Fone 4, MyG/3G, Croma, Hotspot, Ezone and Pai. Each of these partners have Mi Zones which is a small area dedicated for Xiaomi smartphones where people can experience our products. In 8 of these stores, we are already no 1 in
terms of volume share. These stores are Sangeetha, Poorvika, BigC, Lot, Vijay Sales, Univercell, Hotspot (Delhi) and Ezone (Kolkata).
Our most innovative outreach is via our Mi Preferred Partner Stores. These are multi-brand retail stores which have Xiaomi differentiated branding and get Xiaomi stocks on priority. Currently, we have 600+ Mi Pp Stores in over 11 cities such as Delhi, Jaipur,
Bengaluru, Chandigarh, Hyderabad etc. By year end, we aim to have 1500+ Mi PP stores across 30+ cities. Mi Home store also plays an extremely important for offline sales as it’s our flagship store. We currently have 3 Mi Home stores in Phoenix Mall, Orion Mall and 1 MG Lido Mall in Bengaluru. Delhi NCR’s first Mi home store
opened on 19th August at Second Level, Ambience Mall, Gurugram from 10 AM. Pre-bookings have started for Mi Home on mi.com from 16 August started taking pre-bookings on Mi.Com.

The ideas is to cut out multiple layers of middlemen and allow Xiaomi to expand our offline presence, keep costs under control so that we can offer our customers high quality devices at a very affordable price. Via our three pronged strategy, we believe we are a truly integrated company when it comes to implementing our O2O strategy (Online to Offline and vice versa). We help direct traffic from our online channels such as mi.com to our offline channels and direct the traffic back to mi.com from our offline stores.

What will be the ratio between your offline and
online sales currently?
From January 2017 – July 2017, our offline sales have grown by 10X and today more than 20 percent of our sales come from offline.

Do you have any Make In India plans going on?
We started manufacturing in India in the year 2015. We were the first smartphone brand to announce our manufacturing plant under Honorable Prime Minister Narendra Modi’s ‘Make in India’ initiative. We partnered with Foxconn for this initiative. Our first ‘Made in India’ smartphone was the Redmi 2 Prime, followed by the Redmi Note Prime, and today all Indian models are made in India except Mi 5. The second manufacturing unit was announced in 2017
March. The facility which is now operational is located in Andhra Pradesh. The combined capacity across both the plants is 1 phone / second when they are operational, not including shift changes, breaks, and holidays etc.
It employs 7500 people from hundreds of villages. 90% of employees are women. More than 95% of Xiaomi’s smartphones sold in India are now manufactured locally.

What is Xiaomi’s update on ‘After Sales Service’ policy, service warranty and ‘Dead After Purchase’ strategy?
In order to provide a great experience, we work on two things: (1) launch phenomenal products, and (2) provide great post sale support. After Sales is as crucial as sales for us and we believe in providing the best in class post sales service to our consumers. For
the same we and our partners have invested nearly 100 crores for after sales service and a hurdle free after sales experience.
Today we have 500+ service centers in India across more than 350 cities in India, including tier 3 / tier 4 cities such as Churu, Mirzapur, Asansol, and many others. We have 2 call centres and 3 repair factories and Mi Fans can get in touch with us via multiple platforms to share their feedback or complaints: Call Centers, Live Chat, Email, walk into a Service Center, request for a pick up & drop - Pick Mi, ping us on Social Media, Mi Community or if you see any of us anywhere - just walk upto us in person, and we will help you.
We also have a Pick Mi service where you can call and arrange for a pickup and drop of your device across 8000 pin codes. Across our service centers, we have an average rate of 95%, of repairing the device in one day and a rate of 86% to repair it within 4 hours. On an average, our call center employees are fluent in 2 no. of languages such as Hindi, English but in future we will support regional languages. We take almost 16,000 no. of calls each day which goes
upto 20,000 (highest number - Last Diwali) on some days, 1500 emails per day, 1000 chats and 200 social media UI.
Additionally we also conduct soft skills training, technical, education, reward and recognition for service engineers. Today, we have a score of 75% CSAT and as per IMRB, more than 90% Xiaomi customers are happy with their service experience. We want to be known as a benchmark in this space for customer experience and
we will do whatever it takes to reach there.