No More Top Gun: Top 7 Reasons Why Xiaomi Lost Out On The Top Spot In India

It was the top smartphone brand in India for 20 quarters, but in Q4 2022 Xiaomi finally slipped from the top spot. And the Chinese brand not only lost the top spot, but also slipped to third place behind Vivo, according to Canalys' report on the Indian smartphone market. There are many reasons for this shift in Xiaomi's wealth, but these seven are the most important.

Too much online addiction

Xiaomi has built a strong offline presence in the Indian retail market in recent years, but by mid-2022 the brand seems to be placing most of its smartphone eggs in the online basket.

Very high expectations from online sales, which is far from Xiaomi's expectations. “Retailers primarily focused on online channels experienced poor holiday ecommerce sales performance in the third quarter of 2022… Xiaomi aiming to clear inventory of previous models across ecommerce channels experienced significant delays for their products across online channels in Q3 2022 ,” said the Canalys analyst.

Error in the premium category

While the mid-range and affordable segments account for the majority of sales, Xiaomi has recently been looking to have a significant presence in the premium segment. And in 2022, it tries to climb up the price ladder by introducing devices like Xiaomi 11i Hypercharge and Redmi K50i in the premium mid-range segment and Xiaomi 12 Pro in the premium segment.

The brand has brought the Redmi Note into the Rs 20,000 range. Regardless, the gamble didn't quite pay off. Some phones have done decent business, but Xiaomi has failed to hit the volumes that OnePlus or Samsung could threaten. Limited resources also went into launching these devices which could be better used to push traditional box cows like the Note series.

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Problems with ED

Xiaomi faced several issues with the Indian Enforcement Directorate (ED) throughout the year. ED had seized €5,551.27 million from the Chinese brand in April 2022 under the Foreign Exchange Management Act (FEMA). This affected the brand's image (already struggling to get past the "China" label), and many say it affected its ability to perform well as well.

Poor procurement management

Despite all the claims of being an Indian brand, actually the components of Xiaomi phones (and other brands too) come from abroad. In the last quarter of this year, supply problems affected most smartphone brands in general and Xiaomi in general. This has negatively impacted the brand's ability to meet demand for existing devices and launch new ones. Some feel the brand could have managed stock better, but that is entirely a matter of opinion.

Mixed product portfolio

Xiaomi spent 2022 confusing consumers. The brand has released devices under three brand names namely Xiaomi, Redmi and Poco and in most cases the devices are very similar to each other. Customers often have to choose between several Xiaomi devices with different brand names or series, which causes a lot of confusion, especially since Samsung cleared their wallets and made it lighter and easier to understand. In the past, Xiaomi was primarily concerned with price offerings and an excellent performance / service ratio, trying to appeal to a much more diverse audience, which made its approach seem complicated and even confused loyal customers.

wrong note

The Redmi Note series has long been Xiaomi's top-selling device in India. Redmi Note 4 has played an important role in establishing the number one brand in India. However, in 2022, the misleading image of Xiaomi products also infects the Redmi Note. The brand has introduced several Redmi notes during this year, some of which have not even said what they stand for and what they give others; and prices range from 11,000 to 20,000 rubles.

The overall numbers may be impressive considering the sheer number of phones launched, but 2022 was the year that Redmi Note lost ground.

In software, not old gold

While its competitors stepped up their software update game and users expected better security and new software, Xiaomi spent the year on Android 11 and 12.

At the time of writing, the brand does not have a single phone running Android 13 in India, unlike Samsung and Vivo.

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