Yes, you read it right. Xiaomi, the pioneer of providing amazing features at extremely affordable prices, has decided to invest in 100 Indian startups. The Chinese company is taking this route to overpower its competitors. While Samsung shipped 9.8 million smartphone units in Q4 of this year, Xiaomi followed closely with 9.2 million shipments. This declaration by Xiaomi has been made to increase company’s reach in the Indian sub-continent.
According to Lei Jun, the chief executive of the company, Xiaomi wants to create an ecosystem of apps around its brand. The investment would be made in a period of five years and as we said, Xiaomi will invest in only those apps which can make its phones gain more visibility.
Lei Jun emphasized the fact that Xiaomi and Shunwei Capital will invest in financial technology, content, hyperlocal services (including mobile repairs) and manufacturing to increase the usage of mobile internet in India!
It is worth mentioning that Shunwei Capital and Xiaomi are sister companies and they have already invested in KrazyBee and Hungama. Now, they are looking to invest another $1 billion in above-mentioned categories of startups. Are you leading a company in these fields?
Lei also made a statement,“In China, in the past four years we’ve invested $4 billion in over 300 companies. In the next five years, we will invest in 100 companies in India. We will basically replicate the most successful ecosystem business model of China in India. We will have all types of services and products and integrate them. That is the Xiaomi business model. We focus on a few key things and everything else, we let our partners provide. We’ve reached just a huge scale in seven years because of this partnership/affiliation model.”
Alibaba Group Holding Ltd and Tencent Holdings Ltd are the two leading internet investors in India and if Xiaomi succeeds in investing the said amount in Indian startups, it will become one of the top internet investors as well!
The Chinese company has already acquired the whole of Indian low-end smartphone market and if it gets some interesting apps under its hood, it will definitely leave Samsung behind in terms of sales and shipment! Xiaomi will only invest in those companies which are looking forward to expanding internet usage in India and make customers loyal to its phones in a market where the ‘next and different’ thing is always in trend. In short, Xiaomi wants loyal customers who keep buying its mobiles and for that, they need some inspiring new companies to invest in.
“Any apps that increase the frequency of usage of smartphones—we’re interested in this. As long as it is related to the acceleration of mobile internet. We only pick minority stakes. The purpose is to work closely (on the business side) with these companies,” Lei said.
The Chinese private company is trying to bring an impressive value for money in the market and we are seriously looking forward to how it turns out! India is one of the biggest markets for Xiaomi as it wants to sell a variety of products here! Air purifiers, televisions, smart watches, etc will be launched in India soon. These products are already a big hit in China and they will enter the Indian market in the next two quarters.
The company has not listed its shares and has no intention of doing it anytime soon. Lei mentioned, “Right now, we do not have such plans. Being a public company has its advantages and disadvantages. We can only go for an IPO when we feel comfortable. We have enough cash. We haven’t made any losses except in 2015 when we lost a little bit of money because of working on the global expansion.”
What do you think about this move by Xiaomi? Will you try to raise funds from the Chinese giant? Let us know in the comments below!
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