Xiaomi, a major smartphone manufacturer, has announced that it will replace its current app store in India with PhonePe’s app store starting in January. This change is significant for PhonePe, an Indian fintech startup, as it suggests that Xiaomi is adjusting its strategy in India, which is one of its largest markets outside of China.
Xiaomi, which is the second largest seller of smartphones in India after Vivo, will automatically update its customers’ devices to swap out its existing app store, called GetApps, for the new Indus AppStore from PhonePe. This transition was communicated to customers over the weekend.
According to a notice sent to users, the team responsible for GetApps will continue their work under the new title, Indus Services App, which will focus on helping users with app installations and support.
Since entering the Indian market in 2013, Xiaomi has sold over 250 million smartphones and more than 100 million other types of devices. However, the company has faced some challenges in recent years. After dealing with a scandal involving illegal money transfers, Xiaomi shut down its financial services operations in 2022. Additionally, rising tensions between India and China have led to a decline in Xiaomi’s market share and frequent changes within its leadership team.
On the other hand, PhonePe is a well-supported company, with backing from major investors like Walmart and Tiger Global. It launched the Indus AppStore in February of this year, aiming to compete with Google’s dominance in the app store market in India, where Google has a vast user base. Vivo, another smartphone brand, also provides its own app store alongside Google’s Play Store.
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Many businesses in India, similar to those in other countries, have raised concerns about the high fees that Google charges, which can be as much as 30% on app transactions. They also dislike Google’s restrictions that prevent the use of third-party payment systems on the Play Store.
PhonePe’s Indus AppStore aims to address these issues by not charging a listing fee for the first year, allowing the use of third-party payment providers, supporting multiple local languages, and providing customer support.
Both Xiaomi and PhonePe did not respond to requests for further comments about this change.
