MENS, MILK and Xiaomi

In his book on the Chinese smartphone company, Xiaomi, Jayadevan PK says the startup started to plan to expand into India in 2013. It’s hard to imagine now, but in 2013, India’s transition to smartphones was still slow. India was a MENS club – no, not the sexist one, MENS here stood for phones from Motorola, Ericson, Nokia and Samsung. Along with those companies, like in China, home-grown companies had started to make cheap smartphones – they were the MILK, an acronym for Micromax, Intex, Lava and Karbonn.

 

The timing of Xiaomi’s entry into India in 2014 was lucky – it coincided with a steep fall in Internet prices, brutal data plan wars among telecom providers, and Reliance Jio forcing data prices to absolute rock bottom. The “great Indian smartphone migration” had begun.

 

But first, Xiaomi had a few changes to make. The name, to start with. People outside China didn’t know how to pronounce it! It meant “millet” and alluded to the Communist Party’s use of the “millet and rifle” symbol during the 1937-45 war with Japan. Its mascot was a star, too similar to the communist red star. Such communist symbolism was a bad idea when selling outside China. The company had to rebrand itself.

 

It removed the overt communist symbolism from its site and changed the logo. It shortened the name to just “Mi” to make it easier to pronounce outside China. Did “Mi” stand for anything, asked reporters. It was probably just the last 2 letters of the company’s name and selected because it was pronounced “me”, which sounded similar to the “i” in all Apple products – iMac, iPhone, iPad. But when asked, they said it was short for “mobile internet”. Later, their homepage claimed “Mi” also stood for Mission Impossible, a reminder of the of the company’s wins against all odds when it started off as a Chinese startup.

 

They started small in India – trying to sell just 10,000 phones first via Flipkart. Luckily, Flipkart had decided that online smartphone sales would be a huge market in India and was wooing Chinese brands assuming (correctly) that Indian customers would gobble cheaper brands rather than expensive MENS brands. Oh, and those 10,000 phones? They got sold within 5 seconds on Flipkart. The fear that Indians, like everyone else, would have suspicions about a Chinese brand, had not played out. Round 2 followed on Flipkart, again with 10,000 units only. This time, they got sold even faster - within just 2 seconds!

 

Within 5 years of that small launch, Xiaomi would go on to sell 100 million phones in India, at times even displacing Samsung to become the top-selling phone in India. (Among the MENS, only “S”, Samsung, successfully managed to switch from feature phones to smartphones – the other MEN would all fade away, not just in India, but worldover).

 

Xiaomi had plans to go to the US as well. Apart from being a tough market, there was another problem – the election of Trump and his open hostility and threats of trade war with China. Xiaomi, therefore, decided to avoid the US for some time. And decided to focus more on India.

 

When China’s border clashes and incursions started with India, Xiaomi was afraid of the backlash. There was concern that phone data was being sent to servers in China. The Indian government banned army personnel from using Xiaomi phones. Xiaomi worked desperately to salvage its image – they agreed to join Modi’s Make in India initiative and have phones assembled in Indian factories. It started to open stores and expand into smaller towns. It sold via multi-brand stores like Sangeeta, Croma and Reliance. For now, it has worked.

 

Will Xiaomi continue to shine, in China and India? Only time will tell.