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Hugo Barra feels there’s still some time before Xiaomi reaches developed markets

Yash GargJanuary 18, 2015

Xiaomi has seen thundering success every market it has set foot in. Starting from its homeland of China to the islands of Indonesia, the company’s devices have been well received not only by the tech-savvy, but also buy the budget conscious.

Many Xiaomi products also end up in European and American households, but that’s courtesy of re-sellers in China. This also shows that there’s a good market for Xiaomi in these developed markets; Hugo Barra, the company’s international face, however, revealed something recently that won’t make a lot of Xiaomi fans in these countries very happy. As it stands, Xiaomi is accused of taking design inspiration from ‘other’ companies. Some even call it the Apple of the East for that, a tag which the company doesn’t particularly like.

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“It’s probably gonna be a few years before we reach these tier one markets,” is what Barra had to say when quizzed about when the company was planning on setting up shop in the Europe and Americas in a recent BBC interview. Barra added that he thought the markets were a lot more competitive than the ones they already operate in, which is why it will take the company longer to get there. Barra said that he beleived Xiaomi is capable of having a much greater impact in developing countries, thanks to the company’s policy of selling devices at near-cost.

It’s a shame it’ll take them time to get into the aforementioned markets. But it’s good to see Barra talk to-the-point without beating around the bush too much; that’s an attitude which could take the company to new heights.

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Yash Garg
Yash is a blogger by profession, builder of things by passion and foodie by birth. You'll usually find him talking about technology, music, travel and the game of cricket on the streets of Pune when not busy writing or speeding his way through the country! Read more on retro handheld gaming on RETRO91
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Guaire
January 18, 2015
They announced my country in their 2014 expansion list and most probably they can’t make it even in 2015.
They can’t keep their words.
- barry
  January 18, 2015
  - Guaire
    January 18, 2015
    If I decide something need to criticize I won’t ask anyone to give permission like I didn’t ask anyone when I have praise Xiaomi.
    It’s a fact, they announced their expansion list and didn’t keep their promise.
    - Airyl
      January 18, 2015
      - Guaire
        January 18, 2015
        Well, they announced their 2014 expansion list at April 23 so we wait patiently through the whole year. We had faith on them.
        Even approaching the end of the year when we realize the fact they couldn’t make it in 2014 we thought OK it takes time. We guessed early 2015 is sure.
        Then in an ordinary day Hugo Barra explained their new expansion strategy. It’s nothing about things taking time. They choose it consciously. Basically they sacrificed rest of the countries for the sake of primarily India and secondarily Indonesia.
        They won’t enter some of that countries even in 2015.

realjjj
January 18, 2015
Yeah except that’s nonsense.
First calling those markets tier one is a bad idea. The developing world is the bigger market ,with more potential and slightly different needs. Success in those so called tier one is not really success in today’s world ,the real goal needs to be the developing world. Operating on the same principles as 15 years ago just because that’s what you were taught in school is not ideal.
The US are not even early adopters of technology anymore (see solar, electric cars, 4k), the regulators
are non existent, the political system is deeply dysfunctional while consumers are way too vulnerable to
marketing and fashion, it’s not tier one, it’s tier weird.
Then he shouldn’t bundle the US and Europe just like he shouldn’t think Western Europe when saying Europe. The US market is controlled (and has been killed) by carriers and as a result it is utterly uncompetitive while consumers are careless with their spending. In Europe the East and the West are pretty different and in the end even carriers plans are very different than in the US while consumers are are more reasonable with their spending and value matters more.
It’s also a must to point out that China is the most competitive market in phones and India likely the second.
The real reason is likely that it’s harder for them to sell software and services. In the US they shouldn’t even try unless the rules of the game change.
I do think they should hire customer support execs from Western Europe , nobody does it better and building a great customer support reputation would help them change their image.
- MaxPower
  January 18, 2015
  I totally agree with you, and I believe they won’t even try to get into the US.
- Airyl
  January 18, 2015
  Wait, is your whole rant simply about the US being a dysfunctional market?

Eric
January 18, 2015
Xiaomi should never set foot in western countries. Or else Apple would sue for all their money
Angry Mobile Nerd
January 19, 2015
India 2014 GDP per capita: $1625 USD
USA 2014 GDP per capita: $54678 USD
This is why tier 1 markets still very important, because that’s where all the money is. You want to sell bread by the crumb or bread by the loaf? You decide.
- MaxPower
  January 19, 2015
  - Angry Mobile Nerd
    January 19, 2015
    Obviously you don’t get what I was getting at. Go, sell your bread by the crumb, you will sell tens of millions of bread crumbs and learn the hard way. Afterwards you will see it’s a lot easier (and profitable) to sell bread by the loaf. Apple has already proven this.
    And if you still don’t get my symbolism: low end phones = bread crumbs and high end phones = loaves. And China’s GDP per capita is in a different class than India and Indonesia’s. Consumers have a lot more money in China. You can sell bread loaves in China and you will sell millions of them.
    - MaxPower
      January 19, 2015
      I did get what you meant, but you can’t compare Apple which has fanboys that would even buy a iToilet with a company like Xiaomi born a couple of years ago. Their strategy makes sense to me for the simple fact that before Lenovo bought Motorola, Xiaomi was the 3rd manufacturer after Samsung and Apple without even go internationally. They are also spreading as many devices as they can so they can sell their services through MIUI. We can debate about everything, but numbers are saying Xiaomi is right.
      - Angry Mobile Nerd
        January 19, 2015
        What numbers? Xiaomi isn’t a public company yet, they haven’t released detailed sale figures and have never said a word about profit. You know business analysts have estimated Xiaomi’s net profit margins to be 2%? They go on to estimate Apple’s profits are most likely 150x that of Xiaomi. If they go international a simple fluctuation in currency rates could wipe them out. I’ll tell you Xiaomi’s plan: they just want to a) sell a lot of phones at any price to get them into the top #3 world manufacturers and b) build a brand and last c) go public, make a huge killing on the IPO, and cash out. cha-qing! $$$. Hugo Barra can’t wait for the last step (go public, cash out) because he knows he’s going to get super rich when that happens.
        China has the largest population in the world with a strong up and coming middle class, it’s actually quite easy for any Chinese company in any industry to become the #1 manufacturer of just about anything just because the shear number of consumers they have access to at their doorstep.
        
        MaxPower
        January 19, 2015
        You keep comparing Apple, a company listed on Fortune 500 with Xiaomi that just came out to the market. The numbers I meant are the 62M devices sold last year only and the company valued 40B making it the most valuable private tech company, and the revenue of last year set to 12B. It’s a growing company, which is investing a lot too: they bought a semiconductor company few months ago and news of yesterday they are going to purchase 2.98% stake in software company Kingsoft for $68 million.
        I’m not saying your scenario is unrealistic, you could be right, but I don’t get why all these investments if you are planning on going on stock market and cash out.
        Look what happened to Alibaba, they started the same way, with a small margin profit to then becoming bigger than eBay and Amazon put together.
        MaxPower
        January 20, 2015
        One more thing about Apple: like realjjj said above, the US market is controlled by carriers and there’s no antitrust authority whatsoever. With the carriers Apple is in a dominant position selling their toys like gold because people don’t get that their 2 year contract is actually a mortgage.
        My wife still thinks she gets her phone for free. In Europe instead Apple has been sued several times from the European authority.
        That’s just to understand who is Apple and why the have that kind of profit.