The strategy of the Chinese technology conglomerates is simple in the fledgling Indian Internet economy – invest in startups working in areas of interest and then leverage it to push own products. Alibaba has been doing it aggressively through a series of investments for its portfolio company – Paytm.
Following a similar approach, Xiaomi’s investment arm Shunwei Capital had led an $8 million investment round in KrazyBee in October last year. Seven months later, it all sets to launch CreditBee, a micro-lending platform on the lines of Mi Credit.
The yet to be launched product will offer loan in the range of Rs 1,000 to 100K for a period of three months, reports ET. The product seems to target millennials (mid salaried class and students pursuing professional courses). It is slated to charge an interest rate of 3 per cent from borrowers.
Targeting upper student segment, KrazyBee solves the pain of loan access to e-commerce purchases, two-wheeler loans, student education loans and top-ups (hostel fee, purchase books, fund projects, buying train or flight tickets etc.)
After China, India has become the next largest market for Xiaomi smartphone and other businesses. Within three years of its launch, Xiaomi turned profitable in the country in FY17.
Xiaomi registered the maximum growth during FY17 with sales surging 696 per cent to Rs 8,379.3 crore. It made a profit of Rs 163.9 crore. A year ago, it had revenues of Rs 1,046.2 crore with net loss of Rs 46.9 crore.
Buoyed by growth potential in India, it also set a target to hit $2 billion revenue mark in 2017, twice the amount from preceding calendar year.
The Chinese phone maker had toppled Samsung from top slot and accounted for 24 percent of India’s smartphone market in the third quarter ending September 2017. This is over 7 per cent rise from the last quarter when its market share was at 17 percent.
The credit marketplace segment in India has become overcrowded and it won’t be an easy ride for Xiaomi. However, the size of the gap in credit access to fresh professionals and student is large and can accommodate several players.