Xiaomi debuts in premium range: How will market see the movement?

Re-energizing the brand with a shift in product line, Xiaomi is targeting a new strata of customers with Redmi K20 and K20 Pro

e4m by Shreshtha Verma
Updated: Jul 26, 2019 8:20 AM



Re-energising the brand with a shift in product line, Xiaomi is targeting a new strata of customers. But are the consumers ready to let go off the image of the brand that they have had over the years? Mostly yes. Brand loyalty always has a vital role to play in such movements by brands.With its new flagship products Redmi K20 and K20 Pro, Xiaomi has debuted in the premium range market. Now, it is competing with brands such as Samsung and OnePlus. Looks like the brand is all set to shed off the image of an ‘affordable smartphone’.

According to Anurag Gupta, CEO SVG Media, the market is welcoming this new range from Xiaomi. "I think the consumers will react very favourably to the new launch by Xiaomi and we will see a lot of people upgrading from a budget of 15k to 20k and this will create yet another segment," says Gupta.

He believes that Xiaomi is not the first brand to upgrade its range and enter a new segment. Brands such as Samsung and Nokia have also done the same in the past. As a matter of fact, according to Gupta, every brand targets to cater to diverse audience with a personalised approach.

But will Xiaomi be able to survive the clutter, and most importantly compete with the already established players in the category? Gupta thinks K20 will be able to create a market in two manners - one from people who upgrade from a budget of Rs15000, and the other from those who will save money and go for K20 rather than Samsung and OnePlus.

"What is interesting in the mobile phone category is that the segment evolves with time and launch of new products. Initially, there was Apple at the top end and then Samsung leading the top range with its Android-based phones. OnePlus created a new segment with better pricing than Samsung. Xiaomi came and disrupted the entire lower end with prices matching the likes of Micromax, Intex, Lava and other homegrown Indian brands," explains Gupta.

"When it comes to target marketing, there have been various brands that have straddled multiple price points in various categories from phones to refrigerators and have managed to carry it off perfectly," remarks Gupta.

Earlier, people used to wait for launch of new smartphones by Xiaomi because they were affordable. When Redmi came with K20 and K20 Pro, there were assumptions that people might not accept the new product. However, shockingly, customers look equally eager for a higher range too. After all, nobody can predict the consumer's mood.

Talking to exchange4media, Anup Sharma, an independent strategist and mentor at The Lentils Institute, shared some insights about brand expansion and the Indian market.

According to Sharma, the Indian market is full of diversity, so it is not at all tough for a brand to carry off with such experiments. Xiaomi expanding its marketing is not a big deal, almost every brand does it. They come in the market with a lower range, make their space, and once they win the faith of people, they start expanding their market.

Explaining how consumers perceive such extreme transformations in the pricing, Sharma said, "Consumers today are not brand conscious, they're tech conscious. So as long as a brand is serving high-end technology, consumers are open to accepting."

When asked what potential challenges a brand could face while expanding their market, Sharma says the biggest responsibility is to maintain the quality.

“The Indian market is very diverse and huge. It is the brand's responsibility to meet the expectations of the diverse audience. And if a brand manages to do so, a smooth market expansion is not a tough thing,” he says.

Anuj Sharma, Chief Marketing Officer, Xiaomi India said: “Guided by our core philosophy - innovation for everyone, Xiaomi as a brand has always worked towards being a consumer-centric company. We bring the best of our innovative technology with incredible specs at a truly honest pricing to our consumers, while ensuring that we seek their valuable feedback.” 

When it comes to Xiomi, experts believe that it was just the right time for the brand to move towards the premium range. Xiaomi has already become one of the most trusted smartphone brands in India, and it cashed the consumer's faith at the right time. To expand its business and make significant shits, a brand should be very careful about the market trend and timing. It has been seen in the past that brands survive such shift only if they manage to sustain the quality and standards.


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