Xiaomi Slides to Third in India’s Declining Smartphone Market, Eyes Recovery with Expanded Portfolio

The Indian smartphone market faced a significant downturn in the first quarter of 2025, with shipments dropping 8% year-on-year to 32.4 million units, according to recent market analysis. This slump, attributed to weak consumer demand and excess channel inventory from late 2024, has reshaped the competitive landscape, with Xiaomi suffering the most dramatic decline among major brands. The former market leader saw its shipments plummet by 38% year-on-year, falling to third place behind Vivo and Samsung. Despite these challenges, Xiaomi is doubling down on its recovery strategy by expanding its product portfolio, including high-profile launches like the Redmi Turbo 4 Pro and its first made-in-India smartwatch, the Redmi Watch Move. This article explores Xiaomi’s market struggles, its strategic response, and the broader dynamics of India’s smartphone industry in Q1 2025.

A Steep Decline for Xiaomi

Xiaomi’s 38% year-on-year shipment drop in Q1 2025 is the steepest among India’s top smartphone brands, reducing its market share from 18% in Q1 2024 to approximately 12% (around 4 million units). This slide to third place marks a sharp reversal for a brand that reclaimed the top spot in Q2 2024 with an 18.9% shipment share. Several factors contributed to Xiaomi’s struggles:

• Weak Consumer Demand:
  The broader market downturn, driven by low consumer confidence and macroeconomic pressures like inflation, hit Xiaomi hard. Its reliance on the mass-budget segment (sub-$200) faced challenges as entry-level smartphone shipments (sub-$100) declined significantly, with consumers prioritizing essential appliances over upgrades.
• Excess Inventory:
  High channel stock from Q4 2024 disrupted Xiaomi’s product launch cycles, leading to reduced sell-in as distributors focused on clearing existing inventory rather than stocking new models.
• Underperforming Launches:
  The early launch of the Redmi Note 14 series and the flagship Xiaomi 15 series, including the anticipated Xiaomi 15 Ultra, failed to generate strong consumer interest. Unlike competitors like Vivo, which saw 13% year-on-year growth with models like the V50 series and T-series, Xiaomi struggled to align its portfolio with shifting consumer preferences.
• Offline Retail Weakness:
  Xiaomi’s historically strong online presence was not matched by offline retail performance, where Vivo’s robust network and Samsung’s premium-focused strategy outperformed. This limited Xiaomi’s ability to capture foot traffic in physical stores, a critical channel in Q1 2025.

In contrast, Vivo solidified its lead with a 22% market share (approximately 7 million units), driven by a balanced online-offline strategy and a diversified portfolio. Samsung, despite a 23% shipment decline, held second place with a 16% market share (around 5.1 million units), bolstered by its premium Galaxy S25 series and a 25% value share in Q2 2024. Other brands like OPPO and Realme saw modest growth of 5% and 3%, respectively, securing fourth and fifth spots.

Xiaomi’s Strategic Response: Expanding the Portfolio

Despite its market challenges, Xiaomi is actively working to regain lost ground by diversifying its product offerings and strengthening its brand appeal. Two recent launches highlight this strategy:

1. Redmi Turbo 4 Pro:
   • Unveiled:
     Ahead of its April 24, 2025, launch in China, the Redmi Turbo 4 Pro is a mid-range smartphone designed to compete in the premium mid-tier segment.
   • Design and Features:
     It boasts a 6.83-inch 1.5K LTPS OLED display (120Hz), a Qualcomm Snapdragon 8s Gen 4 SoC, up to 16GB LPDDR5x RAM, and a 7,550mAh battery with 90W fast charging. Its CNC-machined aluminum frame, soft mist glass back, and IP69 rating offer flagship-level aesthetics and durability.
   • Market Positioning:
     Priced starting at approximately 2,099 Yuan (~$290) in China, the Turbo 4 Pro is expected to launch globally as the Poco F7, targeting India’s growing demand for feature-rich 5G smartphones in the $200-$400 segment. Its premium design and powerful chipset could appeal to young, tech-savvy consumers, helping Xiaomi compete with Vivo’s T3 series and Samsung’s Galaxy A-series.
   • Potential Impact:
     By offering high-end specifications at a mid-range price, the Turbo 4 Pro could help Xiaomi recapture market share in the entry-premium segment, which grew 23% year-on-year in Q1 2024, while addressing its offline retail weaknesses through targeted channel strategies.
2. Redmi Watch Move:
   • Launched:
     April 21, 2025, as Xiaomi’s first made-in-India smartwatch, priced at ₹1,999 (~$24).
   • Features:
     It features a 1.85-inch AMOLED display, IP68 rating, 140+ workout modes, and health tracking (heart rate, SpO2, sleep, stress). Powered by HyperOS, it supports Bluetooth calling and a Hindi interface, catering to Indian users.
   • Market Strategy:
     Manufactured locally with Optiemus, the Redmi Watch Move aligns with India’s Make in India initiative, reducing costs and enhancing brand appeal. Its affordability and robust features position it to compete with budget wearables from Boat, Noise, and Realme, tapping into India’s growing wearable market, which saw Xiaomi achieve 135% year-on-year smartwatch shipment growth globally in 2024.
   • Potential Impact:
     The smartwatch diversifies Xiaomi’s ecosystem, encouraging brand loyalty among smartphone users and attracting new customers in the budget wearable segment, potentially offsetting smartphone shipment losses.

These launches reflect Xiaomi’s broader goal to double its device shipments in India to 700 million over the next decade, as stated by Xiaomi India President Muralikrishnan B. By expanding into wearables, premium mid-range smartphones, and potentially other IoT devices, Xiaomi aims to rebuild its market presence and appeal to diverse consumer segments.

Broader Market Dynamics

The 8% year-on-year decline in India’s smartphone market in Q1 2025 reflects a maturing market with limited growth catalysts. Key trends shaping the industry include:

• Premiumization:
  The premium segment (>₹30,000) continues to grow, reaching a 20% volume share in Q1 2024, driven by demand for devices like the iPhone 16 series and Galaxy S25 series. Apple saw its best-ever Q1 in India, entering the top five brands in Q4 2024 with a 10% share, fueled by promotions and the iPhone 16e’s success in Tier 2 and Tier 3 cities. Xiaomi’s Xiaomi 15 Ultra, expected to feature a 200MP periscope camera and Snapdragon 8 Elite SoC, aims to compete in this segment, but its high price may limit its impact in a cost-sensitive market.
• 5G Adoption:
  79% of smartphones shipped in 2024 were 5G-capable, up from 55% in 2023, with models like the Redmi 13C and Vivo Y28 leading the mass-budget segment ($100-$200). Xiaomi’s focus on affordable 5G devices, such as the Redmi A4 5G, could help it regain traction, though mixed early performance suggests challenges in the sub-$100 segment.
• Channel Dynamics:
  Offline channels accounted for 51% of shipments in 2024, with Vivo dominating due to its strong retail network. Xiaomi’s climb to third place in offline channels in 2024 indicates progress, but it must further strengthen its physical retail presence to compete with Vivo and Samsung.

The market’s value grew despite the shipment decline, with wholesale revenue rising 9% year-on-year in 2024, reflecting a shift toward higher-priced smartphones. However, the entry-level segment (sub-₹10,000) saw a one-third decline, impacting Xiaomi’s core strength in budget devices.

Challenges and Opportunities

Xiaomi faces several hurdles in its bid to recover market share:

• Intense Competition:
  Vivo’s 16% year-on-year growth in 2024 and Samsung’s premium focus create a challenging environment. Emerging brands like Nothing (577% growth in 2024) and Motorola (87% growth in Q3 2024) are also gaining traction with innovative designs and aggressive pricing.
• Brand Perception:
  Xiaomi’s unclear positioning between budget and premium segments has weakened its offline appeal. The Xiaomi 15 Ultra and Redmi Turbo 4 Pro aim to address this, but consistent marketing and consumer education are critical.
• Macroeconomic Pressures:
  Inflation and a growing second-hand market are dampening demand for new smartphones, particularly in the sub-$100 segment where Xiaomi has historically excelled.

However, opportunities abound:

• Local Manufacturing:
  Xiaomi’s investment in local production, exemplified by the Redmi Watch Move, aligns with government incentives and reduces costs, potentially improving margins and pricing flexibility.
• 5G and Premium Growth:
  The mass-budget 5G segment ($100-$200) nearly doubled in 2024, offering Xiaomi a chance to leverage devices like the Redmi Turbo 4 Pro to capture upgraders.
• Ecosystem Expansion:
  By integrating smartphones with wearables and IoT devices, Xiaomi can build a loyal customer base, mirroring its global strategy where it ranked third in smartphone shipments in Q4 2024 with 5% year-on-year growth.

Conclusion

Xiaomi’s fall to third place in India’s smartphone market, with a 38% shipment decline in Q1 2025, underscores the challenges of a maturing, declining market. The 8% year-on-year drop in total shipments to 32.4 million units, driven by weak demand and excess inventory, has hit Xiaomi hardest, ceding ground to Vivo (22% market share) and Samsung (16% market share). Yet, Xiaomi’s response—expanding its portfolio with the Redmi Turbo 4 Pro and Redmi Watch Move—signals a proactive strategy to regain traction. By leveraging premium mid-range smartphones, affordable wearables, and local manufacturing, Xiaomi aims to rebuild its market presence in a competitive landscape.

The success of these efforts will depend on Xiaomi’s ability to strengthen its offline retail presence, align its portfolio with premiumization trends, and capitalize on India’s growing 5G adoption. As the market heads toward modest single-digit growth in 2025, Xiaomi’s diversified approach could pave the way for a comeback, provided it navigates competitive and macroeconomic challenges effectively. For updates on Xiaomi’s latest devices, including the Redmi Turbo 4 Pro (set to launch April 24, 2025, in China) and the Redmi Watch Move (available from May 1, 2025, in India), visit Mi.com or follow Xiaomi’s official channels.

Sources:

• Canalys: India’s smartphone shipments grew 5% in 2024, Apple entered top five for first time in Q4
• Counterpoint Research: India Smartphone Market’s Revenue Hits All-time High in 2024
• Moneycontrol: Xiaomi and Samsung see steep shipment declines in India as market contracts in Q1 2025
• Posts on X: @TimesNow, @digitindia, @SmarTradingA, @EquiNews_India
• Gizmochina, GSMArena, XiaomiTime: Redmi Turbo 4 Pro design and specifications
• Exhibit Tech, Zee News: Redmi Watch Move launch details