With the Note 12 Series, Has the Redmi Note Cracked the Premium Code?

As far as tweets go, it seemed rather standard – a head of a brand announcing that a particular device had done very well in sales. However, a closer look at it and conversations with retail sources reveal far more. That was because this tweet was not only about a device that has been one of the bestselling phones in the Indian market (the Redmi Note) but also about its move into a whole new price zone.

More than 3,00,000 Redmi Note 12 series sold in two months!

Alvin Tse, VP of Xiaomi Global, was talking about the sales of the Redmi Note 12 series in India. He said that the phone series had racked up sales of over Rs 1000 crore in two months since its launch. That sum in itself might not mean too much to most of us who tend to evaluate phones in terms of units sold, so let us try to break it down:

Xiaomi has launched three Redmi Note 12 devices so far – the Redmi Note 12, the Redmi Note 12 Pro, and the Redmi Note 12 Pro+

The most affordable of these was the Redmi Note 12, which started at Rs 17,999. The most expensive was the 12 GB/ 256 GB variant of the Redmi Note 12 Pro+, priced at Rs 32,999. Now, if we were to be conservative and assume that everyone who purchased a Redmi Note series device purchased the most expensive one, the 12 GB/ 256 GB variant of the Redmi Note 12 Pro+, at Rs 32,999 (without availing any discounts or offers), we would get over 3,00,000 units sold. Over two months, that’s 5000 units being sold per day.

Impressive though that number is, it would be considered “business as usual” for a device of the stature of the Redmi Note. It was so popular that, at one stage, it could have been one of the top phone brands in the nation in its own right. So, what makes these sales numbers special? Well, similar figures in the past were achieved at much lower price tags in segments where the Redmi Note seldom faced very serious competition. The Redmi Note 12 series comes at much higher price tags. Its competitors include the likes of the Nothing Phone (1), the OnePlus Nord series, and the Pixel 6a, apart from premium mid-segment offerings from Samsung, Vivo/iQoo and Realme.

The Redmi Note price story: Going from sub-Rs 10,000 to Rs 30,000 plus in 9 years

The Redmi Note series is seen by many as the line-up that made Xiaomi one of the top smartphone brands in India. It best represented Xiaomi’s core philosophy of “very good specs at a surprisingly affordable price” and, in its initial days, had a single model that started at Rs 9,999. That changed from 2017 onwards when multiple Note variants with a variety of suffixes (Lite, Pro, Pro+, Pro Max) were launched at different price points and often at different times of the year. The Redmi Note series was known for being available for around Rs 10,000, moved up to Rs 15,000, and then in 2022, got into the Rs 20,000 segment with the Redmi Note 11 Pro+ 5G. There were lower-priced Note 11 devices available, but the showcase Note now began at almost twice the price it did six years ago and almost three times the price at which it was first launched in the country in 2014.

In terms of marketing strategy, this is a rather unusual approach. Brands generally tend to introduce lower-priced variants of more premium devices, such as the iPhone SE, the Galaxy S20 FE, the Galaxy Note 10 Lite, the Pixel 6a, and so on. It is rare to see a brand trying to move a device that is known for being budget-friendly into a more premium price band. It is almost contradictory in some sense. Many might consider OnePlus as another example with its main devices moving up the price ladder, but then a OnePlus was always considered a high-end flagship phone until the Nord series came along. OnePlus phones were supposed to be near-flagship performers and flagship killers, irrespective of their price tags. The Redmi Note, on the other hand, was a solid value-for-money proposition with no flagship performance pretensions, so it seemed odd to see Xiaomi thrusting it into a more premium range.

What made this move all the more puzzling for many was the fact that while the Redmi Note enjoyed a clear edge over its competitors in the sub-Rs 15,000 and even the sub-Rs 20,000 segments, going above those zones placed it squarely in what many call the premium mid-segment, where it has to deal with much tougher competition. Xiaomi ventured into this zone in 2021-22, but not through its Redmi Note series. It had instead opted for devices like the Mi 11x, the Mi 11 Lite, and the Redmi K50i, as well as some Poco devices. It seemed as if the Redmi Note would not step into the premium mid-segment.

“Like doubling the price of a McDonald’s burger!”

The Redmi Note 12 series, however, did just that. In fact, two of the three devices in the series were premium mid-segment – the Redmi Note 12 Pro, starting at Rs 24,999, and the Redmi Note 12 Pro+ starting at Rs 29,999. The Redmi Note 12, at Rs 17,999, seemed to be the odd one out. Yes, the more expensive versions did come with better hardware – high megapixel cameras with OIS, fast charging, and so on – but the Redmi Note 12 Pro and 12 Pro+ were going up against the competition, which had comparable (and, in some cases, better) specs, with no real price advantage. After fighting for years on a superior specs-for-price edge, the Redmi Note was now venturing into a zone where it did not have a very strong perceived price edge and where there were well-entrenched competitors. “We have always fought on a performance-to-price ratio,” Anuj Sharma, CMO of Xiaomi India, had remarked at a briefing introducing the product. “But that does not mean that we cannot fight purely on performance too. The Pro series is proof of that.”

Not many thought that the move would work. The Redmi Note’s reputation of being a very good value-for-money budget device was supposed to be an albatross around its neck in a higher price segment. After all, had not Redmi itself preferred going into the Rs 25,000 – 30,000 with a different series of devices (the K series)? It was believed in some circles that Xiaomi was gambling with the goodwill around the Redmi Note brand by moving it into a higher price zone. “People expect a Redmi Note to be very affordable,” one of our acquaintances told us. “Imagine doubling the price of a McDonald’s burger? Will people still buy it or look at other options? Remember, you get better options as prices increase!”

The Note Pros lead: Cracking the premium code?

On the evidence of the past two months, however, it does seem that the Redmi Note has managed its move up the price ladder very smoothly. What is especially surprising is that, as per our source, the sales of the Redmi Note 12 series have been dominated by the sales of the more expensive models – the Redmi Note 12 Pro and the Redmi Note 12 Pro+ rather than the most affordable of the series, the Redmi Note 12. Considering the competition those two devices faced, their performance is very impressive indeed. There are devices with better designs, better processors, larger batteries, newer software, and comparable cameras in the price range of the Redmi Note 12 Pro and 12 Pro+. The fact that consumers have still gone the Note Pro way might be proof that Xiaomi might have just overcome its history of being mainly a price warrior.

It might be very early days, but the sales of the Redmi Note 12 series seem to indicate that Xiaomi is close to cracking the premium phone code (albeit mainly in the mid-segment) in a market it had earlier dominated by fighting on price. This, of course, does not mean that it will abandon its affordable price roots, but it does open the door for more devices in higher price segments from the brand.

Small wonder then that one of our colleagues asked at a briefing: “Could there be a Redmi Note 12 Ultra in the coming days?” Notably, Xiaomi did not rule it out. We would not either. The Redmi Note seems to have entered a new era in India. And so has its parent brand.

(Note to McDonald’s: No, do NOT double or triple the price of your burgers. Please!)