Author(s): Raghu Gopal
Last week, Chinese handset maker Xiaomi announced a partnership with MobiKwik to embed the service into Xiaomi's MIUI 8 mobile operating system. MobiKwik is a leading Indian e-payment service used by about 30 million people. The service enables users to pay most common bills from their smartphones. Xiaomi will enable MobiKwik users to quickly top up their accounts and pay bills.
MobiKwik users running the MIUI 8 update will be able to manage their finances and pay bills upon receiving payment reminders. Tapping on the reminders takes users directly to their MobiKwik wallets, where they can authenticate the payment. This proactivity prevents late payments for users.
Xiaomi has become a top global smartphone competitor within a few years of its founding in 2009. Though its primary market is still its home country of China, Xiaomi has become a popular brand in other Asian markets including India. As competition from other Chinese and Indian smartphone makers grows, Xiaomi is looking at partnerships and geographic expansion to regain lost momentum.
The partnership between MobiKwik and Xiaomi should be beneficial to both companies, each riding on the brand awareness of the other: for Xiaomi as it attempts to consolidate its share of the Indian market by offering such e-payment services; for MobiKwik, the partnership will allow it to grow its customer numbers as it takes on FreeCharge and Alibaba-backed e-payment firm Paytm. Together, these two firms dominate the mobile payments market in India, which is estimated to top $1 billion in 2016.
Xiaomi is no stranger to installing third-party software and services on its devices. In fact, this is a major element of its smartphone business model. Hardware is partially subsidised by revenue earned from pre-installing apps. It's not an unusual approach among phone makers or operators, but Xiaomi has a reputation for taking this to another level. For MobiKwik, the association with Xiaomi should provide it with visibility at a time when the mobile payment market in India is becoming mainstream.