Chinese smartphone giant Xiaomi saw a sharp decline in revenue from its India operations in the first quarter of 2025. According to data from research firm Canalys, Xiaomi's wholesale revenues (excluding GST) dropped 45% year-on-year, from $85.3 million in Q1 2024 to $47.2 million in Q1 2025. The company's shipment volumes also fell significantly by 38%, marking a challenging start to the year.
This decline pushed Xiaomi out of the top five smartphone brands in India for the first time since Q3 2016, despite efforts to realign its business towards the premium smartphone segment.
Interestingly, while Xiaomi has actively positioned itself as a premium smartphone brand, its average selling price (ASP) has actually decreased by 12% in the March quarter, reaching $118. This trend suggests continued dominance in the budget smartphone segment, undermining the company’s repositioning strategy.
Xiaomi had witnessed a comeback in 2024, when its smartphone shipments grew by 6%, outpacing the industry. The brand also reported an 18% increase in revenue that year, driven by portfolio streamlining and an expanded offline retail presence. However, this momentum was short-lived, as the company faced intensified competition in the budget market and struggled to gain meaningful traction in the premium segment.
Sanyam Chaurasia, senior analyst at Canalys, noted that despite Xiaomi’s premiumisation rhetoric, the data reflects a different reality. “The falling ASPs, driven by high-volume sales in the budget segment, indicate Xiaomi is still perceived as a budget brand,” he said.
Chaurasia added that moving upmarket requires more than launching expensive devices—it calls for a brand overhaul. This includes channel partner engagement and consumer education on Xiaomi’s premium offerings, areas where the company currently falls short.
In response, Xiaomi India COO Sudhin Mathur defended the company's approach. He explained that the drop in volume was a deliberate move as part of portfolio streamlining aimed at focusing on profitable market share rather than chasing numbers in a slowing market.
“The goal is to drive sustainable growth with a focus on revenue and profitability, beyond just selling smartphones,” Mathur stated. He acknowledged that the sub-Rs 15,000 segment remains Xiaomi’s stronghold, but confirmed that expanding its presence in the premium market is now a top priority.
Mathur emphasized Xiaomi’s commitment to the premium strategy, revealing that the company plans to launch several premium devices over the next 8–10 quarters. These new offerings aim to elevate brand perception and improve its positioning in higher price segments.
According to Mathur, Xiaomi's recent flagship models have received a positive market response, which is encouraging the brand to further invest in premium experiences and ecosystem-building.
However, the shift to premium has not been smooth at the retail level. Offline retailers claim that Xiaomi’s in-store presence is being overshadowed by rivals like Vivo and Oppo.
Kailash Lakhyani, chairman of the All India Mobile Retailers Association, said Xiaomi sales promoters face pressure to push premium models without sufficient incentives or salaries. This has reportedly led to waning interest in promoting Xiaomi’s products in physical retail spaces.