We continue with the #InsightsPodcast series, and on this edition we have with us Manu Kumar Jain, Managing Director of Xiaomi India- a leader in smartphones, televisions, and many other products. Manu walks us through the journey of setting up Xiaomi in India and scaling it to become one of the best mobile phone brands in India in a very capital efficient way.
Starting by talking about his childhood days, Manu remembers growing up in Meerut in a large family with a business background, where the ultimate aspiration was to set up shop- the larger the shop the more successful one was. Unlike most of his cousins, Manu decided to pursue engineering from IIT Delhi and then did his MBA from IIM Calcutta, post which he worked with Mckinsey for five years before co-founding Jabong. He ran Jabong for 2 years before moving out and then joined Xiaomi to start their India business.
Talking about Early days at Jabong, Manu gets candid about how his first thoughts on selling fashion online was that “it was a stupid idea”, but after some persuasion from his co-founders he was able to take the leap of faith, only to get pleasantly surprised that a lot of people were willing to buy shoes and clothes online. Riding on the wave of mobile first online consumers, Jabong grew from thousand orders a day to ten thousand orders a day, to become a top two player in the online fashion space.
Hugely fascinated about mobile as a category and having heard about a Chinese company trying to do things differently by online as the primary channel for sales, Manu connected with the founders through his network out of pure interest to learn more about the company’s journey. After multiple exchanges between Manu and the founders, sharing learnings with each other on the China and India landscape, Lin Bin, Co-Founder & President of Xiaomi, offered Manu to join them to start their India business.
At a time when India had more than 300 smartphone brands, Xiaomi went ahead with an online only sales strategy when everyone else was spending huge marketing dollars on advertising and sponsorships. From very early on, the expectation from the board was to be profitable and not burn at a day-to-day operations level. This led Xiaomi to take a product focused approach and leverage social media to take its consumer delight story to the masses. What others spent on marketing, Xiaomi spent on quality of the phone giving the customer a better hardware and a better camera.
“We can’t make more than five percent margin from any of our hardware products by board resolution. We believe in a concept called as honest price. We cut down all possible costs like marketing, distribution, working capital, inventory cost and pass on that benefit to the user without keeping a profit margin for ourselves.”
The social media angle that bolstered Xiaomi’s rise to the top continues to be a core part of today’s focus. Mi community today has more than 70 million MAUs and physical fan clubs in more than 25 cities.
Finally, sharing learnings for young entrepreneurs, Manu talks about the importance of having mentors who do not have a vested interest in your company or you, so that the conversations are brutal and honest. Last but not the least, Manu stresses about the importance of investing in the team and ensuring that good performers grow within the company, from both and equity and cash perspective. Spending time with the team has always been in the top three priorities for Manu. “One-on-one or group sessions are not only meant for year-end appraisals but should be a part of your weekly and monthly schedule time. And these are not performance reviews but to ask how they’re feeling, how they’re growing and for discussing about stuff informally too, within work and outside work.”
Tune in to the podcast to hear more interesting bits and insights from Manu’s journey of scaling Xiaomi to its today’s scale.