Xiaomi’s journey since it started selling phones in India in 2014 has been the stuff of legends. In just three years, it has toppled Samsung as the top smartphone brand in the country. In the process, it has developed a stranglehold over the domestic budget smartphone market, obliterating a host of Indian handset manufacturers. But now, Xiaomi is turning its attention towards another ecosystem that is hot and happening — startups. The Chinese phone-maker plans to invest as much as $1 billion in Indian startups over the next five years.
Over 100 startups could benefit from Xiaomi’s capital as it seeks to create an ecosystem of apps around its phone brand, chief executive Lei Jun told Mint in an interview. Lei informed that Xiaomi’s sister unit Shunwei Capital has already invested in six Indian firms in digital content and entertainment. Going ahead it will fund startups in fin-tech, hyperlocal services, online entertainment, and so on. But “minority stakes” only. “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,” Jun stated. ALSO READ: Xiaomi becomes top smartphone vendor in India in Q3, 2017: IDC
Xiaomi intends to drive mobile adoption and app usage in India, which is already the second-largest smartphone economy in the world. “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,” Jun explained. Incidentally, Chinese internet companies like Alibaba and Tencent are already deeply invested in the Indian startup ecosystem. But Xiaomi’s popularity is nearly unmatched. ALSO READ: Xiaomi India teases new smartphone launch; could be the Redmi Note 5
After building a rock solid retail/merchant network, first online and now offline, Xiaomi plans to ramp up its presence in the services side. It will identify apps that can increase mobile activity among users. At present Indians spend an average of four hours per day on apps, according to an App Annie report. Surely there’s enough room for growth, especially when millions of new users are being added each year. “Any apps that increase the frequency of usage of smartphones — we’re interested in this. As long as it is related to acceleration of mobile internet,” Jun said.