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    Xiaomi, India's biggest smartphone maker, now wants to lend you money

    Synopsis

    Xiaomi now plans to foray into consumer finance and business-to-business lending by floating a NBFC.

    ET Online
    NEW DELHI: The sudden rise of Chinese smartphone maker Xiaomi in India should worry companies beyond the smartphone industry. The company is slowly expanding its wings in India — from smartphones to TVs and now to lending.

    Xiaomi now plans to foray into consumer finance and business-to-business lending by floating a non-banking financial company (NBFC), according to its latest regulatory disclosure. The new company, Xiaomi Financial Services India, will soon seek the Reserve Bank of India’s approval to operate as an NBFC.

    Xiaomi Financial Services plans to provide loans to consumers for purchasing electronics, home appliances, lifestyle products, vehicles, furniture, tools, utensils and office equipment, and give credit to firms, corporates or any other entity “For the purpose of purchase and acquisition of goods, merchandise, assets of any nature”, according to the Chinese firm’s RoC disclosure.

    Earlier, in May this year, in partnership with lending platform KrazyBee, Xiaomi launched its first lending product in India on the lines of the microlending product Mi Credit that it offers in China.

    Xiaomi started out in India as a seller of cheap smartphones online but overtook the leader Samsung in a few years. Now it is trying to expand in the smart TV segment. It has announced local manufacturing of Mi LED televisions in India.

    It has partnered with Dixon Technologies to set up a manufacturing plant in Tirupati, Andhra Pradesh that spans across 32 acres and will employ more than 850 people.

    Xiaomi's ambitious expansion plans might include many other products in future. Its regulatory filing in India exhibits its ambition and the threat it poses to Indian manufacturers. From electric and other vehicles small and big, it also plans to sell laptops, gaming consoles, computer accessories, lifestyle products, network equipment, clothes, toys, backpacks and suitcases, and bath and kitchen products. It already sells several of these products in China.

    Xiaomi would channel a chunk of the capital it raised from its July IPO to India, especially to build its ecosystem of internet services, make more startup investments and build India-specific IoT devices, the Chinese company’s India head Manu Kumar Jain said in August.

    He said 30 per cent of the $4.5 billion raised in the IPO would be used for core R&D, 30 per cent on building the IoT platform, 30 per cent for global expansion and the remaining 10 per cent for miscellaneous expenses. Xiaomi's India business does not need significant external investment since it is already profitable.

    Xiaomi has been building a host of internet services in India, which include apps such as MiMusic and file-sharing app Mi Drop as well as its MiBrowser and MiStore shopping apps. Its lending operations will be part of this plan.

    Xiaomi has made investments in 10 startups in India, several of which align with its strategy of building internet services, such as social networking app Sharechat, digital content platform Hungama, and lending startup Krazybee, and it has already launched products in partnership with these companies.


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