The company, which surpassed Samsung as the top smartphone maker in India for four quarters, is one of the most valuable companies in the world. The company plans to spend Rs 3,500 to expand its services, according to Xiaomi India managing director Manu Kumar.
“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 which will make money for us,” Jain said. “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.”
The company relies on three financial benchmarks — devices, retail and services — and it hasn’t monetized any of its services just yet.
The company has Mi Video and Mi Music, which are both free and each have more than 40 million users a month. The company also recently started a paid subscription plan for Mi Music. The company also operates Mi Pay, a UPI-based payment platform, and its Mi Drop file transfer application has around 100 million downloads.
The company also wants to monetize its credit platform, Mi Credit, which allows customers to get instant loans from partners like KreditBee and ZestMoney.
That doesn’t mean the company is turning its back on retail, either. It recently announced that it planned to have 5,000 stores open in India by the end of 2019.
“It’s been over a year since we started offering our products through offline retail, and we have seen strong growth there,” said Manu Jain, Xiaomi vice president and managing director for India. “Offline retail is a huge segment in our country, with nearly 40 percent of the offline market focused in rural regions, and all of this should increase our offline sales and account for 50 percent of the company’s revenue by the end of next year.”