Xiaomi India's Strategic Pivot: Rebuilding Trust in a Changing Market
Xiaomi India, once known for shaking up the smartphone market with aggressive pricing, now faces a new challenge. The company is no longer chasing sheer volume at any cost. Instead, it aims to rebuild consumer trust and reposition itself as a premium technology brand. This shift comes after years of regulatory scrutiny, pricing backlash, and slowing sales volumes.
A Reset Year with Global Attention
Xiaomi has designated 2026 as a reset year. The company demonstrated this commitment through a strong presence from its global leadership during the recent launch of its first products for the year: the Redmi Note 15 and the Pad 2 Pro. Adam Zeng, Senior Vice President of Xiaomi Group and President of its international business department, made India his first overseas visit of 2026, highlighting the market's importance.
"India is an extremely important market for Xiaomi, and we are very excited about the future here," Zeng stated. He emphasized that Xiaomi is evolving beyond just a product company. "Xiaomi today is not only a product company. We are a human, car, and home ecosystem platform company, and we will invest more in our OS, our AI, and our chipsets for the future."
Responding to a More Discerning Consumer Base
Indian smartphone buyers have changed. They no longer seek just the cheapest specifications. Consumers now prioritize device longevity, software support, service quality, and integration into a broader digital lifestyle. Xiaomi's response involves a pivot to what it calls "honest pricing," deeper localisation, and an expanded product ecosystem.
Alvin Tse, Vice President of Xiaomi Global, acknowledged recent difficulties. "The last 3 to 4 years, a lot happened, a lot changed," he told reporters. "But what doesn't change is Xiaomi's attitude and emphasis on the strategic importance of this market." The company admits the era of shock-and-awe pricing is over, citing rising component costs and industry complexity.
Focus on Value and Consumer Experience
Xiaomi now argues that transparency and efficiency can deliver fair value. Tse explained, "However difficult, one day Xiaomi's honest pricing shall traverse cycles." He added that the company's operating model helps it "endure this cycle a little bit better than the peers in the industry."
This philosophy influences everything from margin setting to timing price hikes. Sandeep Sarma, Associate Director of Marketing at Xiaomi India, noted the company absorbs cost pressures where possible. "We are absorbing as much as we can," he said. "We were the last ones to do price changes and even that is not across the board. It is product by product, case to case."
The bet is that Indian consumers, now accustomed to paying in instalments and keeping phones longer, will accept moderate price increases for better quality and support. Replacement cycles have stretched from under one year to nearly three or four years today, altering market economics.
Sudhin Mathur, Chief Operating Officer of Xiaomi India, observed, "Consumers are now holding on to their devices much more. They are looking for much more durability. Service is becoming an important aspect. Software is becoming an important aspect."
Enhancing Software Support and Service Infrastructure
To meet this demand, Xiaomi is doubling down on long-term support. Its new Redmi Note and Redmi Pad lines will receive significantly longer software and security updates than before. This move aims to reassure buyers their devices won't become obsolete quickly.
Service is another key pillar. Xiaomi India already operates over 1,500 service centres nationwide. It is now rolling out premium service hubs that mirror high-end consumer electronics brands' experiences. "We now already have 10 premium service centres and we will go to about 100 in 1 and a half years," Mathur revealed.
This focus on experience extends to retail. The brand, once synonymous with online flash sales, is rebuilding its presence in organised retail and malls. Tse noted Indian buyers increasingly want to touch and try devices, especially in the mid-premium segment. "They want better camera quality, they would like a more fluid operating system, and of course we need to build the retail infrastructure for them to experience our products," he said.
Deepening Localisation Efforts
Localisation is a powerful talking point in Xiaomi's transformation. What began as basic assembly has evolved into meaningful manufacturing. In 2017, only 5% of Xiaomi's components were sourced locally. That figure has now climbed to about 35%, while 100% of its phones and televisions sold in India are manufactured domestically. Wearables and tablets are also now made in India.
"In India we now almost 100% of our phone manufacturing and TVs are now 100% manufactured here," Mathur confirmed. "Quite a few of our AIoT categories, wearables and tablets are also now made in India."
For Xiaomi, localisation isn't just about political optics. It enhances speed, resilience, and cost control in a volatile global supply chain. The company steadily increases the share of locally sourced components, from circuit boards to mechanical parts, as Indian suppliers scale up. "We went from 5% to 35% local sourcing," Mathur noted. "It's a continuous process. If there are merits in local components, we will always look at them."
Executives haven't committed to exports from India, citing domestic demand as the priority. However, the message is clear: Xiaomi sees India as more than a sales market. It is becoming a manufacturing and testing base, especially for adapting products to Indian conditions.
Sarma described how Xiaomi now tunes cameras, performance, and thermal management for India's climate, feeding learnings into global product development. "We do power, performance, thermal, gaming and camera testing in Indian conditions," he said. "We started with 3 people. Now we have a team of 10. That localisation is still happening."
Building a Connected AIoT Ecosystem
Perhaps the boldest part of Xiaomi's India strategy is its determination to stop being seen as just a phone brand. Globally, Xiaomi runs what it calls the world's largest connected AIoT platform, with over 1 billion devices linked to its ecosystem. India is crucial to this puzzle, with around 140 million monthly active users.
"A lot of them are on Redmi Note," Tse said, pointing to the newly launched Redmi Note 15 as a gateway into Xiaomi's broader platform. But phones are just the beginning. Tablets, TVs, wearables, robot vacuum cleaners, air purifiers, and numerous smart home products aim to lock users into a web of connected devices that communicate with each other and Xiaomi's software.
"Xiaomi is not just a smartphone company," Tse emphasized. "We are the world's largest connected smart AIoT platform. India is one of the biggest contributors to that."
The numbers reflect this shift. Last year, 15% to 18% of Xiaomi India's revenue came from non-smartphone categories. TVs, wearables, and power banks are growing rapidly, and tablets propelled Xiaomi to the top tier of the Indian market. "We are now number 3 in tablets and very close to number 2," Mathur shared. "Power banks are number 1. Wearables are doing well. QLED TVs saw almost 6 times growth during Diwali."
Streamlining Product Portfolio and Focusing on Value
In 2026, Xiaomi plans to push this ecosystem further by deepening existing categories and widening its portfolio. Robot vacuum cleaners and air purifiers are set for a comeback. TVs will become larger and more technologically advanced. Tablets and wearables will focus on better displays and tighter integration with phones.
"2026 is not just going to be about phones," Mathur stated. "It's about taking a step further into our ecosystem categories and establishing leadership in phones, tablets and TVs."
At the heart of this ecosystem push is a redesigned smartphone portfolio. Xiaomi is abandoning cluttered launches of the past, where multiple Redmi Note models confused buyers. Sarma said the company returns to what made the Note series iconic: a single, highly recommendable device that sets the benchmark. "We said let's start with the best thing possible and then build from there. That's how we get back some of that mojo."
Simultaneously, Xiaomi rebuilds its price ladder. It intends to fill gaps in the mid-premium range in 2026, shifting from a pure volume game to a value and revenue play. "The volume shares tapered, but revenue is still growing 7-8%," Mathur explained. "So we pivoted more from a volume to a value strategy."
This pivot is crucial in a market where higher-end phones are increasingly bought on instalments and seen as long-term investments. Xiaomi India believes it can win back consumers by offering devices that feel premium, supported, and fairly priced.
Challenges and Confidence Moving Forward
None of this will be easy. Xiaomi still faces legal and regulatory challenges in India, and competition is fiercer than ever, with rivals also pushing into the mid-premium and ecosystem space. Yet the company's leadership appears unusually candid about the road ahead.
Zeng's decision to visit India after a five-year gap wasn't symbolic. It signaled that headquarters is paying attention again. "Mr Adam promised more resources for the market this year," Tse said. "We look forward to bringing more mid-premium smartphones and more ecosystem products to India."
For Xiaomi, 2026 is framed as a landmark year, not because of a single blockbuster phone, but due to a broader attempt to reset how the brand is perceived. From honest pricing to longer software support, from deeper localisation to a sprawling AIoT platform, the company bets Indian consumers will give it a second look.
As Mathur put it, "We are very confident about our commitment to India. It's going to be a busy year." Whether that confidence translates into a true comeback depends on how convincingly Xiaomi proves its next chapter is about more than just being cheaper.
