With the Indian smartphone market booming, Xiaomi has made a splash with its weekly flash sales on Flipkart, an Indian rival to Amazon.com (AMZN). When the Chinese smartphone brand conducted another of its sales on Tuesday, over 300,000 people registered to buy some 90,000 of its Redmi 1S phones priced at 5,999 rupees (or $98). In last week’s sale, the Xiaomi phones sold out in four seconds.
Xiaomi isn’t the only foreign company looking to take advantage of consumer demand for inexpensive alternatives to the iPhone (AAPL). The company with perhaps the most ambitious plan is Google (GOOG), which last month made India the first market for its new Android One smartphone operating system. Google teamed up with local brands Micromax, Karbonn, and Spice, all of which have recently introduced smartphones priced around 6,000 rupees.
India particularly needs better low-cost phones, argues Caesar Sengupta, Google’s vice president of product development in Singapore and head of the Android One project. India’s mobile operators don’t offer the sort of generous subsidies that consumers in the U.S. and other markets take for granted. ”In the U.S., when you buy an iPhone, it costs $600 to $700 but you get a subsidy, so to a consumer it feels you are buying a $200 phone,” Sengupta says. In India, the cost to the consumer is much closer to the actual cost of the hardware.