After establishing its domination in the Indian smartphone market within five years of its entry, Chinese phone maker Xiaomi now aims to monetise internet services in India to compete with the likes of Netflix, Amazon, Google Pay, and Spotify.
Xiaomi India Managing Director Manu Kumar Jain said that the Chinese technology company wants to earn revenue from streaming of movies and music, digital payments and wallets, and is willing to invest close to Rs 3,500 crore on it, The Economic Times reported.
"Xiaomi globally made less than 1 percent profit margin from hardware or device sales in 2018, and we have stated that will never make more than 5 percent profit margin on hardware. It is the internet services that will make money for us," Jain said.
Devices, retail and services are the three financial pillars for the company, of which the company is yet to explore the last one. "Designing and selling hardware is only half the job for us. The remaining half of the job is to engage with customers and sell internet services to grow fast," Jain added.
The company wants to promote its streaming platforms, Mi Video and Mi Music. Similar to AirDrop, its transfer tool Mi Drop is already gaining popularity with over 100 million downloads. The company recently launched Mi Pay, a United Payments Interface (UPI)-based payment application.
In partnership with KreditBee and ZestMoney, it is looking to enter the credit market with Mi Credit - a marketplace for instant credit. Xiaomi does not have a non-banking finance company (NBFC) license yet. Therefore, Mi Credit is a pilot project wherein partners are offering credit as of now.
The company will also use a chunk of the Rs 3,500 crore for opening exclusive stores, deepening R&D for devices in India, and developing service centres and warehouses. Xiaomi beat Samsung to become the market leader in the Indian market in October-December 2017. It has retained the position ever since. Its phones are popular mainly because of advanced features and high-end software at low prices.