Xiaomi, the Chinese smartphone maker, has announced a multi-year partnership with Indian fintech company PhonePe to preinstall the latter's Indus Appstore on its Android smartphones sold in India. This move marks a significant shift in the country's app market landscape, as Xiaomi's devices will now come with an alternative app store to Google's Play Store.

According to the agreement, PhonePe's Indus Appstore will replace Xiaomi's GetApps on its Android devices, although Google's Play Store will still be available on the devices. The partnership, which was first reported by TechCrunch last year, aims to provide a locally driven app marketplace experience to Indian users.

PhonePe's Indus Appstore is designed to cater to the Indian market, supporting 12 local languages and featuring a video-led discovery feed. The app store boasts a collection of over 500,000 apps across various categories, making it a formidable competitor to Google's Play Store. One of the key differentiators of Indus Appstore is its promise to charge zero fees from developers for in-app purchases, a move that could attract more developers to the platform.

However, alternative app stores have historically struggled to gain traction, largely due to the challenge of establishing trust with users and convincing them to install yet another app store. By partnering with Xiaomi, PhonePe is attempting to overcome this hurdle by having its app store preinstalled on new smartphones. The fintech company has not disclosed any numbers on the performance of its app store, making it difficult to assess its impact on the market.

Xiaomi's decision to partner with PhonePe is seen as a strategic move to strengthen its position in the Indian market. "As India's digital ecosystem continues to grow, the demand for a locally driven app marketplace has never been more critical. At Xiaomi India, we have always championed 'Make for India' innovations, and this partnership with Indus Appstore is a strategic step in that direction," said Sudhin Mathur, COO of Xiaomi India.

The implications of this partnership are far-reaching, with the potential to reshape the Indian app market landscape. If successful, PhonePe's Indus Appstore could emerge as a significant competitor to Google's Play Store, providing users with more choices and developers with alternative revenue streams. As the Indian digital ecosystem continues to evolve, this partnership is likely to be a key milestone in the country's app market history.

It remains to be seen when this partnership will come into effect and whether existing Xiaomi devices will also receive the Indus Appstore update. The companies have not provided a timeline for the rollout, leaving users and developers eagerly awaiting further details.

As the Indian app market continues to grow, this partnership between Xiaomi and PhonePe is a significant development that could have long-term implications for the industry. With the Indus Appstore poised to become a major player in the market, it will be interesting to see how Google responds to this new challenger and how users adapt to the changing app store landscape.