Why Ratan Tata Acquired Xiaomi, not Micromax?

It should not come as a surprise for those who know Ratan Tata’s enthusiasm at ano car and no-nonsense approach to buy big or small companies, if it makes perfect sense.

No wonder, Xiaomi has made a cut with Ratan Tata when the Chinese smartphone make said on Sunday that the chairman emeritus of the Tata group, has acquired a stake in Xiaomi Technology in a deal expected to bolster the company’s presence in India.

The Chairman of Tata Group, Shri Ratan Tata meeting with the Union Minister for Railways, Shri Suresh Prabhakar Prabhu, in New Delhi on March 13, 2015.

The Chairman of Tata Group, Shri Ratan Tata meeting with the Union Minister for Railways, Shri Suresh Prabhakar Prabhu, in New Delhi on March 13, 2015.

“This is the first investment by any Indian into Xiaomi,” the company said in a release.¬†“Mr. Tata is one of the most well-respected business leaders in the world. An investment by him is an affirmation of the strategy we have undertaken in India so far,” said Lei Jun, founder and chief executive of Xiaomi.

“This is just the start of an exciting journey, and we are looking forward to bringing more products into India,” he added.¬†Without giving the details of the stake or price, the statement typically said that “in December last year, Xiaomi raised $1.1 billion at a valuation of $45 billion”.

On Thursday, Xiaomi hosted its first global launch outside China, unveiling in Delhi its high-end flagship smartphone Mi 4i model, that supports six Indian languages, at Rs.12,999.xiaomimi

Ratan Tata’s preference to make simple budget car for the people of India early in 2000 for Rs.1 Lakh (then $3000) raised eyebrows of many auto makers around the world. He made it come true and released Nano for entry level or budget segment.

In fact, Ratan Tata’s move to bring down the cost of a car within the ambit of an ordinary family came after he saw too many families plying on two-wheeled scooter in India. His dream came to reality in 2006 when Nano began to roll out and it is still the lowest-priced car in India.

Coming to Xiaomi Mi phones, no wonder the budget and accessibility factor must have moved Ratan Tata to make a huge investment in the upcoming but highly realistic mobile making company that has hit the headlines not only because of its low price but also for attracting the attention of millions of youngsters who are hooked to its phones with modern features.

In fact, being an Indian and a pro-Indian business magnet would have possibly bought Micromax, an Indian mobile phone manufacturer but the difference lies in feature-rich and imagination-capturing tactics of Xiaomi, which is just 5-year-old but makes headlines wherever it goes.

Despite Micromax expansion plans into Yu Yureka and Cyanogen monopoly in India, mere Indian is not the mantra but the budget products are, especially in a n emerging market like India with huge exponential numbers.


(With inputs from IANS)


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