Xiaomi set to launch a consumer lending business in India in the coming weeks, making an ambitious tilt at the booming financial services market where data privacy concerns and fierce competition present formidable challenges.
The stakes are high for the world’s fourth largest mobile phone vendor, whose business model relies on low-margin hardware sales with services as a key long-term profit centre. The company reported disappointing second-quarter earnings on Tuesday and its shares are trading at slightly over half their 2018 IPO price.
Xiaomi is betting it can leverage its number one position in India’s smartphone market to tap into the country’s lucrative but crowded financial services sector. Yet, the mounting public concern over data privacy, which has forced tech giants like Google and Facebook to change the way they do business, could make it a bumpy road for the Chinese firm.
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