Chinese smartphone maker Xiaomi has infused fresh capital to the tune of Rs 3,500 crore into its Indian arm, Xiaomi Technology India.
The funds came in two tranches: Rs 1,499.9 crore (USD 217.4 million) from Xiaomi Singapore for 3,786 equity shares in January 2019 and 2,000 crore (USD 289.8 million) from Xiaomi Singapore for 6,959 equity shares in March 2019, according to regulatory filings with the Registrar of Companies.
The company has not disclosed how it plans to use the funds. Xiaomi is betting big on India as its sales have dropped in China after high-end phones started eating into its market share.
Xiaomi is likely to utilise the proceeds 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, reported the Economic Times citing two senior industry executives.
Xiaomi India store in Bengaluru
Xiaomi entered India four years ago and has toppled South Korean Giant Samsung in the smartphone segment in two years’ time. As per latest data from Hong Kong - based market tracker Counterpoint Research, Xiaomi has 28% share of the Indian smartphone market in 2018. Initially, Xiaomi India established a footprint in India through exclusive deals on online marketplaces Amazon and Flipkart.
However, Samsung is still the largest smartphone company in India in terms of revenue. Meanwhile, Xiaomi has upped its ante by foraying into television and wearable verticals.
The company has plans to expand retail formats in the country. As per plans, the number of large format exclusive flagship stores under Mi Home this year is expected to touch 100, while it wants to open 5,000 smaller size Mi Stores in rural India. The company also wants to significantly expand its presence in multi-brand stores through the Mi preferred partner programme, a company spokesperson told ET.
“2019 will also witness more ambitious retail expansion of our offline channel to extend support for newer categories such as Mi LED TVs. In smartphones, Xiaomi is the second largest brand in the offline market with nearly 18% market share as of January GFK smartphone tracker,” the spokesperson said.
He said Xiaomi saw its entire business model shaping up in India across hardware, internet services and retail business in 2018.
“Xiaomi has an extremely lean offline model, and we continue to spend minimal dollars on marketing and operational costs which include running interesting promotional schemes. However, with the scale of offline sales becoming bigger, investments in offline will accordingly grow,” he said.