Starting in January, Xiaomi will replace its app store with fintech PhonePe's service for Indian customers. The move is a big win for Indian startups, but also a sign of further realignment for the Chinese hardware giant in one of its biggest markets outside its home country.
Xiaomi, India's second-largest smartphone vendor after Vivo, informed customers over the weekend that it will automatically push an update to the devices of its Indian customers to replace GetApps with PhonePe's Indus AppStore.
“The GetApps team will continue to provide app installation and support services under the name Indus Services App,” says a customer notice seen by TechCrunch.
Xiaomi has shipped more than 250 million smartphones and an additional 100 million other devices in India since it started operations in the country in 2013. However, after a strong start in India, Xiaomi is also facing some struggles. The company scaled back its financial services business in 2022 following a scandal related to illegal money transfers. Also, amid tensions between India and China, market share has declined and management has seen many changes.
PhonePe, backed by investors including Walmart, General Atlantic and Tiger Global, launched the Indus AppStore in February this year in a bid to challenge Google's monopoly in India, the Android giant's biggest market for users. (Vivo offers users both its own V-Appstore and the official Android store, Google Play.)
As in many parts of the world, many businesses in India have expressed concern in recent years about Google's “exorbitant” fees of up to 30% on app transactions, and Android manufacturers have said They are complaining that they are not allowed to use it. Third-party in-app payments on the Play Store.
PhonePe's Indus AppStore seeks to address some of these concerns with free listing fees for the first year, support for third-party payment providers, local languages, and customer support.
Xiaomi and PhonePe did not respond to requests for comment.