Xiaomi underestimated India demand, to ramp up production

Aug 13 2014, 01:50 IST
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SummaryEven as the fourth batch of Chinese mobile device manufacturer Xiaomi’s Mi3 handset was sold out in 2.4 seconds on Flipkart

Even as the fourth batch of Chinese mobile device manufacturer Xiaomi’s Mi3 handset was sold out in 2.4 seconds on Flipkart on Tuesday, the company's India head Manu Kumar Jain defended the sales strategy. He said that Xiaomi grossly underestimated the demand in India and now plans to ramp up production of the handsets.

“We are changing the production plan at the factory (in China). We are slowing down the production of some other handsets meant for other countries and ramping up the production of Mi3 in India. Hopefully, the quantity would be higher in a few weeks. We understand a lot of people are disappointed and I apologise for that,” Jain told FE.

Xiaomi sold 20,000 units in the latest sale on Tuesday — the fourth in less than a month since its launch in India on July 22. Flipkart, its sole distributor, had asked users to register in advance for a chance to buy the phone. But even as there were over a lakh of registrations, only 10,000 units were available in the first and second flash sales. The company ramped it up to 15,000 units in the third sale on August 6, but still couldn’t keep up with the demand. In fact, Xiaomi’s first sale in India saw Flipkart website crashing for a while, before returning to normal.

The next sale of the handset, priced at R13,999, is on August 19. “We are talking to disgruntled customers to see how we can do this differently. This is not a strategy. We did not do any marketing,” said Jain. He added that the registration process helps the company draw up a weekly demand forecast and plan better.

The company’s India Facebook page had less than 10,000 likes before the first sale on July 22, currently it stands at 33,000, and Xiaomi thought the phone would only appeal to tech enthusiasts. “We knew India was going to be big, but we grossly underestimated the demand. No one had any clue. This was a new geography. These are India-specific handsets and there is a limitation to ramp up the production line in China,” said Jain.

According to Jain, the handsets made for India come with country-specific stickers, software, box, user manual and pricing label. Jain added that countries have different specifications and regulatory requirements. “Units dispatched to Thailand or the Philippines or India are all different. We are changing the production line according to the demand,”

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