Latest annual report of the RBI for the fiscal year 2018-19 confirmed that the Indian economy has indeed hit a rough patch. The GDP growth rate of the economy has slipped to 5 per cent in the first quarter of FY20, the lowest in over six years.
Recent collapse of the automobile sector or the rising number of non-performing assets (NPAs), sluggish consumer demand or failing manufacturing sector, all have a hand in this deceleration of growth rate.
However, Xiaomi believes that mobile phones now fall in the ‘essential’ category and thus are less susceptible to any economic slowdown, and expects the Indian market to continue to grow in the higher single digits till the end of the year.
- The first half of the year saw the Indian Smartphones market grow by about 7-9% with Xiaomi posting 14.8% YoY increase in revenue in Q2.
- The upcoming Festive Season promises to continue the trend.
- Xiaomi has observed two distinct sources- existing customers and second or third time smartphone buyers who demand more from their devices and are thus willing to increase their budget for it.
- As a result, the overall average selling point (ASP) of the market has also started trending upwards.
Thus, amid the stalling Indian economy, Telecom sector is showing no signs of deceleration. Mobiles have become the most important part of human lives and have successfully traversed the journey from luxury items to life-essentials in a short span of time in the Indian economy.
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