Sunday, December 2, 2018

There’s still scope for huge growth in India: Manu Jain - economic news of india - world economic news - economics news for students - indian economy news

Advertisement
There’s still scope for huge growth in India: Manu Jain
With its 2017-18 revenues nudging Rs 23,000 crore, Xiaomi India has had a meteoric rise since its debut in 2014. In four years, it has become India’s largest smartphone seller and a leader in smart TVs, outpacing older players like Samsung, Panasonic and Sony in key categories. Often called the Chinese Apple, Xiaomi has brought respectability to the Made in China brand, once known for cheap and cheerful products. Manu Jain, managing director, Xiaomi India, speaks to ET about his and Xiaomi India’s journey. Edited excerpts:What has been your journey like, from McKinsey to Xiaomi?At McKinsey, I worked on global projects with CXOs who were mostly from old economy, bricks-and-mortar companies. I realised that the future lay in technology. In 2011, I left McKinsey to work with a tech startup. Many discouraged me, saying I was making a mistake leaving McKinsey. In 2012, I co-founded Jabong. It was here that I discovered the power of smartphones. How different is the work culture in McKinsey and Xiaomi?In my network, I have often heard people say that one year at McKinsey is like five years in any other organisation. I would say that one year at Xiaomi is like two years at McKinsey!How would you describe Xiaomi India’s ascent to the top?For our launch, we decided to go 100% online. Many said online-only was a flawed strategy. I was sceptical too. We set a target of 10,000 but when we launched in July half a million customers lined up. The Flipkart website crashed. 66899193 Today, we have eight product categories. We are the largest smartphone seller, No. 1 in smart TVs and fitness band. We have a 30% marketshare in power banks. We have three flagship brands — Redmi (affordable range), Mi (flagship series) and Poco (for tech enthusiasts).What’s the secret of Xiaomi’s success?Our vision is good quality, good spec and honest price. We keep our margins very small on hardware — just 5%. We make money on the ecommerce and ecosystem.We also listen to the market closely. Take a small thing like colour. In many countries, white colour sells the most. In India, black sells the most. We have four colours here but no white. Here’s another example. When we launched Mi Mix 2 in India, an incredible product with full-screen display, ceramic back and gold camera rim, we thought it could have done better. We asked people. They said they didn’t care about ceramic back or gold rim. They just wanted us to lower the price and let them save Rs 5,000-6,000. We realised that unlike China, buyers here don’t value such features. When we launched our Poco series, we removed such features. It has helped us price it lower, and it is doing great. 66899226 66899235 From smartphones to backpacks, Xiaomi has a plethora of products. What is your product strategy in India?Here’s how we look at our India portfolio. We don’t bring anything that’s prohibited, like drones. Market relevance is important. Take Segway. We don’t think it is relevant here, with pot-holed roads.Even when the product is relevant, the question we ask is: Do we have the right product? We have a very good water purifier but it doesn’t have a water tank, so crucial in India. So, we are now redesigning it for India. In premium products like Mi8, we have to ask the question: Do we cater to 90% of the market and focus there or should we look at 10% of the market? We have consciously chosen to focus on the masses. This year we launched our Poco brand. 66899288 66899313 How important is India for Xiaomi?India is the world’s second largest smartphone market. It also has the second highest number of internet users. It is a very important market for us. Here’s how Xiaomi looks at its global footprint — China, India and the rest of the world. India is special. It is our first major success outside of China. Now we are taking the learnings from India to other markets like Bangladesh and Indonesia.What’s your view on Make in India and its success in the handset industry?China is very developed but India is developing fast. Four years back, there was no manufacturing hub here and we had no component suppliers. In 2015, when our first factory went live, no vendor wanted to come here. Today we have six factories across Andhra Pradesh, Noida and Tamil Nadu, employing over 12,000 people.We are taking baby steps. We began assembling three years ago. Slowly, localisation is increasing. Today, printed circuit boards are being locally sourced for about 95% of our phones made here. We recently held a conference attended by 50 global suppliers to get them to set up factories here for components like camera sensors and touch panels. If that materialises, we would see investments worth Rs 50,000 crore creating 50,000 jobs.The toughest thing about Make in India is training people to produce quality products.There is a perception that working in a Chinese firm is tough. I, too, had heard such stories. People warned me before I joined. The perception is that companies from the East have cultural issues. I have never experienced it. When I met the cofounder Lei Jun, he told me to think of Xiaomi as an MNC headquartered in China. That is how Xiaomi works. Most cofounders have worked in the West and have been exposed to a multicultural environment.What is it like to work at one of the world’s fastest growing companies?It is incredible. I would prefer to solve big problems in a small company than small problems in a big company. But here the pace is enormous — every month, every day we are doing something new. My wife says she hasn’t seen me happier.Not that everything here was smooth. Lots of things went wrong. But one thing we are incredible at is in quickly finding out what went wrong, fixing that and moving on. Our philosophy is it’s okay to make mistakes. You will make them if you are doing something different. In fact, there’s a problem if you aren’t making mistakes; it means you aren’t trying new things. What is unacceptable is that you make mistakes and don’t learn from them.We hire people for passion and not so much for experience. Here most people are in their 30s and are experimentative.What about your offline rollout?Our pilots last year were a disaster. We analysed and figured we were making the mistake of copying others who were following the FMCG model, offering high dealer margins. We were not good at it. So, we decided to sell handsets like a technology product: go deep rather than wide. We are a pull brand not push. With no marketing spend, today we have 20% market share in offline. We struggled, made mistakes and learnt. Now we have one of the leanest distribution networks.How is the relationship between India and the HQ?In most MNCs, strategic decisions are taken at the headquarters. Communication is mostly on email. You have a quarterly-annual plan to work on. The biggest difference is we are involved at a strategic level, not just for India but even for other markets. I am a global VP, part of a 10-12-member executive team. Lei Jun often asks my opinion on things. In meetings, he will listen to everyone before making up his mind. Once we had six-plus hours of nonstop philosophical discussions on a range of things like India, our future, what kind of people Xiaomi should hire, etc.The level of communication here is very high. Jun and I talk on a daily basis, often three-four times day, on our internal chat app. We take decisions on real-time basis. We have quarterly/annual plans but even when we are deviating from them we don’t need to wait for long. Decisions are made superfast.Amid not-so-smooth diplomatic ties, how tough is it to lead a Chinese firm in India?We have not faced any issues. Recently, when Lei Jun came here, we sought an appointment with the PM. He gave time instantly. We got a 15-minute meeting but it became an hour-long. We have been very aligned and ahead of government plans. We were the first to announce local manufacturing and data localisation.Initially, there were challenges as there was a perception that anything Chinese would not be of good quality. We have been able to change that without spending a single marketing dollar.What worries you?My biggest worry is that we become arrogant and complacent, thinking we have become No. 1, and lose focus on what’s important.What are the filters you use to hire people?Initially, I interviewed every single person we hired. For us, culture fit is as important as skill. We ask potential recruits to spend a few hours or half a day at our Bengaluru office and meet three-four people who have nothing to do with where he is to join. It is to see cultural fit.What’s your take on the smartphone industry?It is one of the most cut-throat industries. It is more like the fish industry where a product gets old very fast and goes waste. So too much inventory is a problem and we have to be very careful. The good thing about India, unlike China, is that half the market is still feature phones. So there is huge scope for growth.What is your work day like?I normally work 8-to-8. I leave for work with my five-year-old son who gets dropped off at school. In the evening, I spend time with the family. If I have work, I do it after my son sleeps. Weekend is sacrosanct for the family. I am a member of the fitness startup CureFit but I am able to manage just two three days a week. My reading has gone down but am regular with newspaper reading.It’s a habit. My communication is mostly on chat besides email. We are very active on social media.
Source: ET
Share This
Previous Post
Next Post

Pellentesque vitae lectus in mauris sollicitudin ornare sit amet eget ligula. Donec pharetra, arcu eu consectetur semper, est nulla sodales risus, vel efficitur orci justo quis tellus. Phasellus sit amet est pharetra