INTERVIEW: The sub-₹30,000 smartphone segment has nearly doubled in the last one year, says Xiaomi India’s chief business officer

• Budget smartphones sell the most in India, and yet, it turns out that the needs of the post-Covid world have pushed Indians into buying more expensive smartphones.
  
• While the budget smartphone segment grew in single digits in the last year, Xiaomi India’s Raghu Reddy says the sub-₹30,000 segment almost doubled.
  
• Even though 5G is yet to launch in the country, Raghu says it is one of the top features customers look for in the ₹20,000 and above price segment.
  

The post-Covid world has seen tech adoption at a scale that neither companies nor individuals were ready for, nor had they planned to. From laptops to smartphones, work from home or online classes – people have had to make tech upgrades that were not considered necessary before.

And this has had a major impact on what kind of smartphones people buy now.

We have seen the impact of tech upgrades in the enterprise segment as well, with Indian IT giants TCS and Infosys reporting strong earnings over the past year, despite the pressure of employees having to work from home.

To understand the impact of this on the consumer side, we caught up with Xiaomi India’s chief business officer, Raghu Reddy.

Here are the key takeaways

Post-Covid world has pushed people to move upwards for their smartphone upgrades

Xiaomi has been in the Indian market for a long time now, known for its value-for-money offerings. A big part of this success has been driven by the Redmi brand of smartphones.

That is now changing. According to Raghu Reddy, when compared to 2020, the company observed that the ₹20,000-30,000 and ₹30,000 and above smartphone segments nearly doubled in 2021.

The value-for-money segment, which is below the ₹15,000-20,000 level, witnessed only single-digit growth, Raghu added, despite this segment being highly crowded with several options available across all brands.

“A lot of these customers are also people who've been owning smartphones, I mean, they've already gone through three or four smartphones. So, when they're upgrading, they definitely know what they want. And they're definitely looking for more powerful options,” Raghu told Business Insider, explaining that customers are aware of the options available and they now want better phones.

Powerful processor still more important than everything else

Smartphones have continued the upward trajectory when it comes to power and performance. Xiaomi’s entry in India was with the Mi 3 – a smartphone that was powered by the then-flagship Snapdragon 800 chipset, blowing the Moto G with Snapdragon 400 out of the water.

Over the years, the processor specifications continued to gain prominence even amongst the casual smartphone enthusiasts, regardless of whether or not people understand the intricacies of the Gigahertz, Megahertz, number of cores and other metrics.

This, Raghu says, continues to be the top feature that customers look for.

“The first thing that people look for is really a very strong processor because they know that what they're doing so much with the device, they will want their processor to ensure that everything works very smoothly. So that happens to be, you know, the foremost factor in the customer’s mind,” he said.

Other things like cameras, 5G, fast charging and display-related details are secondary, and almost on an equal footing with each other, Raghu said.

However, at ₹20,000 and above price points, 5G is one of the top features that people are looking for, according to Raghu, since people will use their smartphones for at least 2-3 years.

By then, we should likely have functional 5G services available in the country.

Looking beyond smartphones – the Mi ecosystem

Xiaomi sells a wide range of products – many vastly different and unrelated to smartphones, its staple. Some of these include things like robot vacuum cleaners, water and air purifiers, smart bulbs, screwdriver kits and even sunglasses.

The company first introduced its robot vacuum cleaners in India via a crowdfunding platform, which is unique in its own way and also helped the company mobilise a word-of-mouth campaign that we usually don’t see in these categories.

This, Raghu says, proved to be a successful launch for the company and that it will launch upgrades for products that have done well. He also added that Xiaomi will evaluate if there could be more interesting products that can be brought to India via the crowdfunding route but stopped short of divulging more details. That said, we should know more in the coming months.

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