Xiaomi, a major electronics brand from China has recently announced a price hike in their most selling smartphone Redmi Note 5 Pro and Mi TV in India. They claim the reason to be various unavoidable reasons like taxes and INR depreciation. We are here to see the deeper reasons behind the price hike, outcomes and alternates for these in the India Market. But before that let’s have a look at the specs of both the devices and what place they have had in the Indian market so far.
Redmi Note 5 Pro
No doubt Redmi Note 5 Pro is the budget king of India. The phone was the first to run on the Qualcomm Snapdragon 636 chipset globally. The phone has functionalities and specs far ahead of many of its competitors. Three months ahead of release still manages to sell out lakh phones in secs every week which none other had managed to do in the Indian scenario.
A grey market even exists where these phones are bought and resold at a higher price. The phone’s camera is unbeatable in the segment with great portrait shots with its dual camera and for its wide dynamic range.
Specification of Redmi Note 5 Pro
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MI TV 4 (55”)
Xiaomi has been making TVs for a while now but did not sell initially anywhere out of China. Recently when Xiaomi decided to bring its TV to India it was an overwhelming hit here. It took over the budget segment by a storm. It has never stayed in stock more than few mins since the release. Due to the super sharp display feature-rich interface and the cheapest price tag they were never enough to be bought.
Specification of MI TV 4 (55”)
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The scenario of Xiaomi in India
Xiaomi with its products loaded with tons of features for a comparatively little price has
always been the talk of the market and seldom stays in stock.
By far both the Redmi Note 5 Pro and the MI TV 4 (55’) has never managed to stay in stock apart from the flash sales. Which also garners complains about frustrating the customers with very less demand to supply ratio. Xiaomi usually meets the requirement of the customers in one to two months of flash sale and then has open sale form then. But with these products, the need has drastically grown leading to 3 months of flash sales and still many customers left out unsatisfied.
To counter this Xiaomi made some measures. They for once made cancellations of about half of the orders based on repetitive buying from the same account within 30 days,
repetitive purchase from a same mobile number or even IP address was followed up.
Though a small number of legit buyers were affected by Xiaomi’s aggressive actions. It was
required to put the grey market vendors off the shore. They were making the good profit
through unauthorized sales.
Then Xiaomi proceeded to make payments compulsory during order time for the phones to
be confirmed, another step in eliminating grey market vendors. Xiaomi made another daring step of disconnecting themselves with the authorized resellers who came into notice of selling their products for higher prices.
Xiaomi has 3 manufacturing plants up and running in India. 3 more are under development. Of the 3 running one was initially dedicated to power banks which also recently picked up mobile manufacturing.
As said by CEO of Xiaomi, till date 95% of the smartphones sold in India are manufactured in India. The newer 3 factories will take 6 to 9 months to run and hence to avoid ‘no stock’
the scenario they have planned to import more spares and pre-assembled smartphone and TV.
But the real issue comes right there, recently Indian government passed a bill on increase of duties for importing various electronic accessories which are as follows- 10% increase for
general electronic components, 10% increase on PC Boards, 15% on LCDs, 10 to 20% of
lithium batteries and 5 to 15% on chargers which can result in a notable 10 to 15% price hike as a whole.
Xiaomi opts to import some spares as it will take some period to develop their factories and
to meet the customer needs. This stands one main reason for the price hike.
Since the beginning of this year, there has been a depreciation in Indian Rupee value against Chinese Yuvan and that too contributed to the price hike of the Xiaomi Devices.
Manu Kumar Jain, Indian Chief of Xiaomi tweeted saying the price of RN5 Pro and MI TV 4
(55”) are hiked due to increase in import duties and INR depreciation. The Price of Redmi Note 5 Pro is increased by 1000 INR, so the new selling price for the 4 Gb variant is 14,999 INR but the 6 Gb variant stays the same at 16,999 INR.
The MI TV 4 (55”) previously sold for 39,999 INR will now be available for a price of 44,999
that is a 5,000 INR increase which is bit huge. They also added that the people who have preordered will get the products at an old price and the price change will only be affected by 1 st fo May.
The superiority Xiaomi had over other competitors is the price tag they come with. But with
the rise in price, we feel they have eased their competitors. Especially, VU and Kodak who
recently released similar panel alike the MI TV 4 around the same price. The Redmi Note 5 Pro has become vulnerable than before against the Asus Zenfone Max Pro M1 with almost similar internals and little less powerful camera packed with stock android. This I think is a
deliberate push from the Xiaomi to their competitors which is good for the customers but
not for the brand itself.