Is Redmi Go a Part of Xiaomi’s Offline Expansion Strategy?

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Rural India is a crucial market in the offline channel in the country. Compared to urban India’s 155 per cent tele-density, rural India has only 55 per cent tele-density

pic credits – Mi

Xiaomi has announced the launch of Redmi Go smartphone in India. One of the most economical smartphones from the stables of China-based Xiaomi Corporation, Redmi Go has been announced at a price tag of Rs 4,499. It is to be noted here that Xiaomi had recently announced addition of 20 new distributors in its offline sales network in the country.

The fact that Redmi Go supports 20+ regional languages makes it seem to be aimed towards capturing the rural smartphone market share in India. Meenakshi, Forecast Analyst, Forrester mentions that Xiaomi understands Indian market dynamics quite well. She added that no smartphone company in India has been able to capture the untapped rural market in India.

She said, “Xiaomi understands Indian dynamics quite well. They are not only launching smartphone with cheaper price but also that supports regional languages, key to capture rural market. The objective is likely focused towards capturing feature phone users who are data hungry and are willing to replace their feature phones with smartphones to take advantage of cheaper data plans.”

Xiaomi currently has 50 Mi Home stores and 500 Mi Stores in India. It’s retail network consists of 4,000 preferred partner stores in 50+ markets in the country.

Banking on feature phone to smartphone shift?

Rural India has so far been reluctant to upgrade to smartphones primarily because of the expensive price tags associated with them in the country. Meenkashi had earlier told EFY that rural market will pick up the smartphone trend, as soon as products, at price bands lower than Rs 5,000 are announced.

Faisal Kawoosa, founder, Techarc said, “As per our estimates, rural markets constitute 23 per cent of the smartphone market in India. And in this market Samsung has a huge brand equity apart from other brands like Micromax, Lava, etc.”

It is worth mentioning here that companies including the likes of Samsung and Nokia have better presence in the offline channel as compared to Xiaomi. However, none of these companies have launched a smartphone with such features under Rs 5,000 category in India.

Kawoosa added, “Nokia already has a product in this range, though in specs Redmi has added more meat to the offering. I think it will be an acid test for Redmi in the hinterlands of India to determine if the brand has arrived.”

Upasana Joshi, associate research manager at IDC India, told EFY, “Redmi Go sure look likes a winner but the pricing may just not click in the minds of rural consumer. It might be difficult for a person to upgrade from a Rs 1000, Rs 1500 feature phone to a Rs 4,500 smartphone. The phone is still very costly to appeal to a feature phone user to upgrade to a smartphone.”

Xiaomi, as per a report by IDC, had captured 28.9 per cent smartphone market share in 2018. The company had registered 58.6 per cent growth in India in the same year.

Kawoosa added, “This is a tough call from Redmi. Sub 5k market needs a very deep offline presence, which Xiaomi does not still have. Its offline presence is still restricted and even in the users’ minds it isn’t yet registered as an offline brand compared to Samsung and even Nokia to some extent.”

Meenakshi, sharing the tele-density ratio of urban and rural India said, “Compared to tele-density of 155 per cent in urban India, rural’s tele-density is still around 55 per cent, which hints about large untapped mass market. Though we have large untapped mass market, lower disposable income remains constraint. Chinese brands like Xiaomi understand this and are aggressively targeting rural users with phone price less than Rs 5000.”

Redmi Go features

Redmi Go features a five inch touch screen that offers a resolution of 1280 X 720 pixels. Xiaomi has equipped it with a Qualcomm Snapdragon 425 quad-core processor mated to Adreno 308 GPU, 1GB RAM and 8GB ROM. Xiaomi says that the external storage on the Redmi Go can be increased up to 128 GBs using a micro SD card.

Manu Kumar Jain, MD, Xiaomi India, tweeted, “Kaboom! Here’s another important product specially designed for India. We at Xiaomi India really feel every Indian should get the smartphone experience Swagat hai Aapki Nayi Duniya mein.”

It is worth noticing how Jain is pointing towards smartphone experience for every Indian. The point to be noted here is the fact that urban India has a much higher smartphone user base than rural India.

Redmi Go features a 3000 mAh smartphone battery that the company claims can offer up to 10 days standby time. It supports 20+ regional languages. Connectivity options on the phone include 4G, dual-SIM support, Wi-Fi, Bluetooth 4.1, and a micro-USB port.

One of Jain’s tweets read, “We developed the Hashtag Redmi Go keeping the Indian requirements in mind. And that is why Hashtag Android Go. Light, fast and secure, say hello to more storage, smooth performance, and data savings. Hashtag Aapki Nayi Duniya.”

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