Xiaomi Corp is overhauling its India strategy after misjudging consumer tastes in mobile phones, a costly lapse that has allowed Samsung Electronics to pip the Chinese company to the top spot in the world's second biggest market for the devices.
While Xiaomi remained focused on selling mobile phones under 10,000 rupees ($120), Indian consumers were willing to pay up for better looking models with richer features. South Korea's Samsung launched products to meet those aspirations and offered innovative financing schemes that made them affordable to most.
Those moves have helped Samsung wrest leadership of India's competitive mobile phones market from Xiaomi, with data from Hong Kong-based Counterpoint Research showing it had a 20% market share for the last quarter of 2022 compared to the Chinese company's 18%.
"The Indian market is witnessing a 'premiumisation' trend. (But) Xiaomi has been caught underprepared for the shift with a budget phones-heavy portfolio," said Tarun Pathak, a research director at Counterpoint.
The loosening of Xiaomi's vice-like grip on the 626 million Indian smartphone users - the second biggest after China - shows how companies that fail to cater to changing consumer preferences in a fast-growing economy with rising disposable incomes are being punished.
Most famously in India, Tata Motors' 100,000 rupees ($1,200) Nano, billed as the world's cheapest car, was shunned by consumers who associated the low price tag with inferior quality.
Indians' push for more expensive mobile phones to consume videos and other content will also benefit social media app providers such as Meta, and iPhone maker Apple Inc, which so far has a tiny market share in the country due to its sole focus on high-end phones, priced
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