Xiaomi is gearing up to make a strategic shift in India, as it plans to replace its existing app store with an offering from the fintech company PhonePe starting in January. This decision signifies a significant victory for the Indian startup and highlights Xiaomi’s ongoing adjustments in one of its most critical markets outside China.
As the second-largest smartphone vendor in India, trailing only Vivo, Xiaomi is set to automatically update its users’ devices to replace the current GetApps platform with PhonePe’s Indus AppStore. This transition was communicated to customers over the weekend. In a statement, Xiaomi reassured users that app installation and support services would continue under the new name, Indus Services App.
Since launching operations in India in 2013, Xiaomi has made a substantial impact, shipping over 250 million smartphones and an additional 100 million other devices. However, recent years have posed challenges for the company. Following a scandal concerning illegal remittances, Xiaomi halted its financial services operations in 2022. Additionally, the ongoing tensions between India and China have led to a decrease in market share and significant shifts in its executive team.
On the other side of this partnership, PhonePe, which counts Walmart, General Atlantic, and Tiger Global among its backers, introduced the Indus AppStore in February to rival Google’s dominance in India, the largest market by user numbers for the Android powerhouse. Like Xiaomi, Vivo also offers its users both its V-Appstore and access to Google Play, the authorized Android store.
A growing number of companies in India and elsewhere have criticized Google’s hefty fees—reaching up to 30%—on app transactions. Many argue that Google’s policy against third-party in-app payment systems on its platform is restrictive. PhonePe’s Indus AppStore aims to alleviate these concerns by waiving listing fees for the first year, supporting third-party payment providers, and offering services in local languages along with enhanced customer support.
While Xiaomi and PhonePe were not immediately available for comment, this partnership marks a noteworthy recalibration for both companies as they maneuver through India’s complex and dynamic tech landscape.
