World’s fourth-largest mobile phone manufacturer, Xiaomi, is eying to roll out a consumer lending business in India, Reuters reported on Friday.
The decision comes at a time when the financial services market in the country is on a high; where challenges such as data privacy concerns and fierce competition from rivals pose as a threat.
The chances are good for Xiaomi to establish the proposed business because its business plan depends on low-margin hardware sales with services as a key long term profit centre. On Tuesday, the company witnessed a slump in its second-quarter earnings. The prices of the shares are slightly high than the 2018 IPO price.
In light of the mounting public concerns over data privacy in India, the Beijing-based phone manufacturer’s journey could be bumpy as these concerns have forced big players such as Google and Facebook to alter their business plans in India.
But, Xiaomi’s approach towards privacy and data collection has boosted the hopes of those companies who are looking to expand their business globally. According to Reuter reports, the company is not a big player in the financial services space.
Many banks, global tech companies, Fintech startups and others are looking to seal their position in India because of a boom in the digital economy.
According to a source familiar with the matter stated that Xiaomi India is doing well; it has also rolled out Mi Pay, a payments app that competes with Paytm and others.