Often clad in business casuals, radiating a calm demeanour accentuated by a greying beard and spectacles, Muralikrishnan B belies the intense focus that has steered Xiaomi back to the pinnacle of India's smartphone market. Under his leadership, Xiaomi has navigated through tumultuous phases, reclaiming its position as the number one smartphone brand in India.
BW Businessworld caught up with Murali, as he is fondly known by colleagues and the media, on the sidelines of Qualcomm's Snapdragon For India event, where Qualcomm hosted the global launch of the Snapdragon 4S Gen 2 5G-enabled processor. During this event, Xiaomi's India President took the stage to announce that it will be the first manufacturer to bring a product with the chipset to India later this year, enabling the most affordable 5G smartphone in India, which will cost less than Rs 10,000.
Muralikrishnan's journey with Xiaomi began in 2018 when he joined as Chief Operating Officer after a successful stint at Jabong. He worked alongside Xiaomi India's founding MD, Manu Kumar Jain. When Jain departed, Muralikrishnan took on the mantle as President of the company in India, bringing a strategic overhaul that would rejuvenate the brand.
Reflecting on his tenure, Muralikrishnan describes his experience as a “fairytale” filled with ups and downs. "Multiple emotions, honestly, I've been part of this journey for the last six years. 2018, I would call this a little bit of a fairytale, ups, downs, the highs, the lows, drama, everything, and that's what makes it fulfilling," he says. This rollercoaster ride has been segmented into distinct phases, each characterised by strategic pivots that have defined Xiaomi’s trajectory in India.
The Early Years: Capability Meeting Opportunity
The initial phase was marked by Xiaomi’s rapid ascent to market leadership. "We understood the consumer, we understood the market situation, and made product the hero," Muralikrishnan notes. This period saw Xiaomi educating consumers on how to evaluate smartphones, achieving market leadership within three years by 2017. The brand also expanded into offline retail and diversified into other product categories, including televisions and air purifiers.
However, the company hit a significant speed bump in 2022, dropping from the top smartphone brand in the country to number four, with a combination of market headwinds, anti-China sentiment, supply chain, and marketing issues dovetailing its fortunes simultaneously. Xiaomi’s market share declined to 17 percent in October-December 2022, down from 21 percent in Q1 2022, according to Canalys. Its share further went down to 15 percent in June 2023, reported Canalys. But it recently again became the top smartphone seller in the country with 18 percent market share, more importantly clocking an impressive 24 percent growth in shipments year on year, the highest amongst the top five smartphone vendors in the country.
"In retrospect, I think it was a case of what got you here won't get you there," Muralikrishnan reflects. The market dynamics had evolved, requiring Xiaomi to adapt. "We used 2022 and the learning that gave us to redefine the way we have to go forward in 2023."
Recalibrating Strategy: 2023 and Beyond
Muralikrishnan spearheaded a strategic overhaul focusing on three key areas in 2023: streamlining the product portfolio, democratising 5G, and strengthening offline retail capabilities. He elaborates, "Our portfolio bloated too much, which led to a sort of inventory situation. We said you'll have to recalibrate and cut down the portfolio tremendously for 2023."
The emphasis on 5G was another critical pivot. "We had done such an amazing job of democratising 4G. We said how do you get a part two on this game by democratising 5G," Muralikrishnan explains. This strategy saw the launch of the Redmi 12 5G, a significant moment that he recalls with pride: "That moment was a goosebump moment, I knew we had something good going."
Strengthening offline retail was the third pillar of the strategy. "Post-COVID, the offline retail channels were growing a lot faster... you have to build capabilities," he says. By the end of 2023, these efforts had paid off, with Xiaomi clawing its way back to the number one position.
The Vision Ahead: Premiumisation and Ecosystem Integration
Looking forward, Muralikrishnan envisions a three to four-year strategic plan aimed at premiumising Xiaomi’s product offerings and fostering a connected ecosystem. "The market is getting increasingly premiumised," he observes. This involves catering to consumers who are willing to spend more on premium devices, a segment where Xiaomi aims to make significant inroads.
The Premiumisation Journey
Xiaomi’s journey towards premiumisation is a multi-faceted endeavour, encompassing not just product innovation but also marketing, customer service, and brand perception. "For the longest time we've been very strong in the entry and mid-level segment, we haven't made big inroads in the premium segment," Muralikrishnan explains. "When I say premium I'm saying any phone above Rs 40,000 ($500)," he clarifies, underscoring Xiaomi’s goal to cater to the aspirational Indian consumer.
One of the cornerstones of this strategy is the introduction of Hero products that create a halo effect across the brand. "Take the 14 Ultra for example, the fact that it has perhaps the best that smartphone photography can offer, creates a certain halo effect, which has a trickle-down impact on the rest of the portfolio," Muralikrishnan elaborates. The Hero strategy not only showcases Xiaomi’s capabilities but also elevates the entire brand's perception.
Muralikrishnan also emphasises the importance of a comprehensive consumer experience. "It's not just about launching expensive devices," he asserts. "For that customer, they want a premium experience in the entire value chain, hardware, software, packaging, delivery, customer support, after-sales, everything has to step up."
This philosophy led to the creation of the Xiaomi Priority Plus service, offering a bespoke customer service experience. "You can call and talk to an agent without going through IVR, you can have your device picked up and dropped at your residence, priority appointment, we'll try and get you a green channel on pretty much everything," Muralikrishnan details. Additionally, the service includes features like a free screen replacement within six months, waived labour fees for out-of-warranty repairs, and exclusive support for high-end products like premium televisions and robotic vacuum cleaners. "Such initiatives aim to provide a seamless and premium experience, reinforcing Xiaomi's commitment to end-to-end premiumisation," Muralikrishnan notes.
Ecosystem Integration: A Connected Future
A pivotal part of Xiaomi's strategy is the development of a connected ecosystem, leveraging Xiaomi’s diverse product range. "With people getting technology savvy... we believe Xiaomi is uniquely positioned to once again pioneer the connected ecosystem," Muralikrishnan asserts. This involves integrating various devices through HyperOS, creating a seamless and interconnected user experience. From 350 million devices, Murali reveals that in the next decade or so, Xiaomi wants to double the number of devices it has sold.
"In order to deliver to that incremental 700 million goal, the way we see this is... can every household have at least one Xiaomi product?" Muralikrishnan envisions. This broad goal aims to embed Xiaomi products in every Indian household, expanding the company’s footprint across diverse categories, from smartphones and TVs to trimmers and vacuum cleaners. Success in Numbers
"With our focus on driving the smartphone x AIoT connected ecosystem, we hope to double the number of shipments to approximately 700 million in the next decade," Muralikrishnan shares.
Expanding into New Categories
Under Muralikrishnan’s leadership, Xiaomi has not only focused on its core smartphone business but has also ventured into various new product categories. "We've expanded into televisions, air purifiers, power banks, audio devices, and more recently, tablets and vacuum cleaners," he highlights. Each new category aims to disrupt the market, much like Xiaomi did with smartphones. "We made tablets relevant again with devices like the Redmi Pad Pro 5G, offering a no-compromise option for content consumption and productivity," he adds.
Reworking the Wearable Strategy
Acknowledging past missteps, Muralikrishnan is candid about Xiaomi’s wearable strategy. "Competition has definitely gone ahead. We have asked ourselves questions on getting the right product market fit," he admits. Recent launches, like the Redmi Buds 5, 5C, and 5A, have shown promising results. "The combination of product, marketing, distribution, and experience is coming together now," he says, indicating a renewed focus and optimism in the wearable and hearable segment.
Focusing on Tablets over PCs
Xiaomi’s strategic shift away from PCs towards tablets is driven by consumer insights and the evolving digital landscape. "Today, the secondary device for content consumption for a vast majority of the aspirational Indian ends up being a tablet," Muralikrishnan explains. The rise of remote work and online learning has further fuelled this demand. "People are looking for devices that offer the perfect balance between productivity and entertainment, and tablets fit this need perfectly," he adds.
The Redmi Pad Pro 5G exemplifies this shift, offering a rich content consumption experience without compromise. "It's such a rich content consumption device, and if you want it for productivity, there are those bells and whistles too," Muralikrishnan states. Tablets like the Redmi Pad Pro 5G come equipped with high-resolution screens, powerful processors, and long battery life, making them ideal for a variety of uses, from streaming videos to attending virtual meetings.
"With the Redmi Pad Pro 5G, we have aimed to create a device that can seamlessly transition between different roles, whether it’s for work or play," Muralikrishnan elaborates. This strategic focus on tablets is a response to the growing consumer preference for versatile devices that cater to multiple needs, marking a significant pivot in Xiaomi's product strategy.
Challenges and Opportunities: A Balanced Perspective
Despite the challenges, Muralikrishnan remains optimistic about Xiaomi's future. He acknowledges the difficulties faced in recent years but views them as learning experiences that have strengthened the company. "Strong companies... are defined by not just how you ride the wave, but also how you deal with adversity," he notes.
The future strategy includes ambitious goals, such as launching a device powered by the Qualcomm Snapdragon 4S Gen 2 chipset and expanding Xiaomi’s footprint in the premium segment. "Our goal over the next 10 years is can I double that number, 700 million incremental devices," Muralikrishnan states.
Muralikrishnan’s leadership has not only stabilised Xiaomi but also set it on a path of innovation and growth. His calm yet determined approach, combined with a deep understanding of the market, has revitalised Xiaomi’s fortunes in India.
