The fall and fall of Xiaomi: Slips to 7th spot amid stiff competition, offline woes

XIAOMI India

China’s Xiaomi, once the dominant player in India’s smartphone market, slipped to seventh place in January, trailing Vivo, Samsung, Oppo, Apple, Realme, and Motorola, according to IDC’s latest monthly data.

Analysts and industry watchers attribute Xiaomi’s decline to challenges in the offline retail segment, where it faces intense competition from Vivo, Oppo and Samsung.

“Xiaomi, excluding its sub-brand POCO, which was the third-largest brand in January 2024, slipped to the seventh slot,” Upasna Joshi, research manager at IDC, told Moneycontrol.

“Offline channel stress while competing with Vivo, Oppo, and Samsung, along with inventory from past months, is one of the key reasons for the decline.”

Xiaomi, which led the Indian smartphone market for approximately five years, from late 2017 until late 2022, is struggling to position its brand.

Its push in the premium smartphone segment is yet to yield results. Excess inventory from previous months, fewer launches in January and a focus on budget models (Rs 10,000–12,000 segment), which are struggling in the market, have further impacted the Chinese brand’s position, Joshi said.

“Xiaomi faced stiff competition from players like Motorola in the online channel, which also led to a dismal performance in the month,” she said.

In January, Vivo led the market followed by Samsung and Oppo. Apple, the iPhone maker, was the fastest-growing brand in the month and reached fourth place followed by Realme, IDC's data show.

Ajay Sharma, an industry veteran and independent market consultant, said Xiaomi hasn’t been able to position itself effectively.

“Previously, it served consumers as a mass-market brand but now they are putting forward an image of an aspirational premium brand like Apple. They seem to be confused. From Rs 7,000 to Rs 1 lakh, no brand can play the game successfully except Samsung,” Sharma said.

A query sent to Xiaomi India didn't elicit any response.

Xiaomi’s yearly market share has been continuously declining. From a 17 percent in 2022, it slipped to fourth place in 2023 with a 12.4 percent share, which slipped to 12 percent in 2024, IDC said.

The Chinese company’s recent struggles come amid churn at the top. President Muralikrishnan B resigned in November, just two months after the company appointed former Motorola India head Sudhin Mathur as its chief operating officer. In February, Xiaomi brought in Sandeep Singh Arora as India’s chief business officer to oversee business development.

Talking to Moneycontrol in December, Mathur described the management transition as “smooth and seamless, adding the company maintained regular communication with partners to keep them informed about the changes”.

As part of its 2025 strategy, Xiaomi is positioning itself as a "smartphone + IoT" company and plans to expand its portfolio with new products, including integrated smart home devices and other Internet of Things (IoT) products. It also plans to sharpen its focus on the premium smartphone segment.

Last year, Xiaomi sought to revitalise its operations by hiring several senior executives from Samsung India, bolstering its leadership in retail, marketing, and business development. However, the impact of this move has yet to be seen.

The company also faces scrutiny over alleged foreign exchange violations. Xiaomi has denied any wrongdoing even as it faces probes by the income-tax department, the Directorate of Enforcement and the customs department. It has challenged these proceedings in the court of law.

Xiaomi's sub-brand POCO is embroiled in a dispute with offline retailers who have accused it of anti-competitive practices, causing losses to retailers and the government.