Xiaomi the more influent Chinese smartphone company who become the first on china sales, now faces a very familiar enemy of the bigger ones. Counterfeits.
Last year Xiaomi announced the Mi Power Bank battery pack for smartphones and tablets, for a very low price, the product has been highly accepted and the company expected to be a record breaker in sales. However the product has hit the mark of 14.6 million units last year, and that was less than half that the total which has been expected by the company.
Asked about the cause for the low sales the CEO of the company, Lei Jun, said at a press conference in the company’s headquarters: “What is the biggest problem? There are many fakes,” Lei said. “If there were no counterfeits, our sales would be double or triple. The product has been recognized by everyone.”
The Chinese startup last year, overcame Apple and Samsung in the biggest market of the world, China, and now with a — $45 billion — value, Xiaomi must learn to deal with counterfeits of his products, and at the same maintain their focus investing in so many startups with its various products.
The revenue lost to counterfeit products would be equal to at least $115 Million. A high loss value for the company, especially considering the price of the product where quite possibly the profit margin is not so great. For you know, the Mi Power Bank can be find in three options now and the prices ranging goes of $7.90 to $21.
Another product of the company that is a big target of counterfeiters are their earphones, Xiaomi Pistons, we can find a lot of them being sold by on line resellers, for the originals price. And say which one is original or fake, is something hard. For that reason the most secure way to escape from counterfeiters as buyer, it’s buy only from trustful resellers or official retailers.
Gizchina News of the week
Currently we must admit that the market in China, facilitates the production of counterfeits in China and even on other countries abroad. And this is not something new, but something that has been going on for years. Questioned by this subject, China’s Vice Premier Wang Yang ensure that this year there will be an extensive combat to this practice. However we know, not wanting to be pessimistic, this would take a few years to show a real result.
The company now supports at least 27 startups, aiming to expand his range of smart devices, 10 of them already have products in the market. Although people may say that the increasing range of products is risky, or even a loss of Xiaomi focus, investing in so many products, since a high range of them on the market may become something difficult to manage, especially its consequences, such as counterfeiting, The CEO Lei Jung ensures that is a great misunderstanding. Xiaomi now will stay focused on Smartphones, Televisions and Routers, while at the same time will support their partners with another products. And will stay focused on those products for a long time.
Counterfeits, and fake products will always follow the steps of the bigger companies, and still a threat to the good ideas that come from many startups. The journey to discover how face them and deal with it is something that every company needs to learn. If the Xiaomi is coming to be a giant this will not be the last time their will have to face the fakes, and find a way to combat them efficiently is the best way that their good ideas, continue to succeed.
[ Source ]
it’s easy, they have to just put a Xiaomi.com international store with shipping everywhere in the world and will be no more fake products in the market.
There will always be fake products in the market it doesn’t matter if they have an online store or physical stores in every major city in the world. There will still be people looking to make a quick buck off of their success. Look at Samsung and Apple they have online and physical stores but they still suffer from fakes.
No but at least people who are serious about buying real Xiaomi products can get them safely, instead of having to risk buying at dodgy online shops. There will be people who are cheap or stupid and still buy the fake stuff, but this will save the people who want to buy the real deal.
I once bought a fake Xiaomi earphone from a vendor in Alient Express. I have no way of knowing its was fake until I bought a similar earphone from Merrimobile and compared the sound quality of fake and the real Xiaomi.
it’s very easy to test if phone is original or fake, just try to upgrade MIUI, on fake you won’t be able to, on original 2min tops.
An official Xiaomi shop open to the world would be excellent but it probably won’t happen until Xiaomi expands to more major markets.
For now someone who wants a real Xioami needs to just avoid the dodgy online shops and buy from the reputable ones. If a deal seems to good to be true, it probably is. And always pay with paypal, they are very good about settling disputes for make merchandise. I never buy anything online without researching both the product and the seller.
and, they need to do a lot of thing to go out to rest of the world. Xiaomi did open store in US, but, they are not seling smartphones, because they first need to do something about faking of their own, since they use a lot of patents from other, and not paying nothing
You have personal knowledge that they are using patents from others? If they are where are the lawsuits? Samsung and Apple have not been shy about suing companies that use their patents including Chinese companies. Why would Apple hold back against what is becoming its biggest competitor in Asia?
Would you like to start by the looks of some xiaomi phones!?
or to other things…anyways you can read about it on many places. .it’s not just xiaomi. ..i am shore that you have seen 1:1 copy of iphone, galaxy and many other brand name phones from china. And you know why don’t they suing them?
Because it’s China, not USA or EU. In China, they can do what they whant…and if apple wonts to be there on the market, they need to keep plaing chinas game. Few years ago they did not have right to sell in China, until they redrowed all suits. And look…two years now, no lowsuits agenst chinese copycats.
but still, Xiaomi cant sell phones in US and EU…and it’s not just them. And it’s nlt just for apple patents…it’s motorola (lenovo), nokia…. you can google about it
The looks of Xioami Phones look like like Xiaomi Phones. Some elements may be inspired by other phone brands but that is not stuff that can be patented. They don’t sure the 1:1 brands because they have little impact on sales outside of China and don’t have enough sales to warrant a lawsuit. Xiaomi does. Xiaomi actually competes against Apple in several countries. Apple withdrew a lot of their lawsuits because the courts said you can’t sue for basic design elements that are found in every phone. Apple tried to patent every little detail of their phones including stuff that had been available on phones for years. Its the same reason HTC isn’t suing Apple, despite the Iphone 6 borrowing heavily from the One series of phones. Again you have no actual knowledge you are going off of internet rumors.
Xiaomi was involved in a patent battle with Ericson in India, but that had nothing to do with the design of the phones it had to do with how they connect to networks. Every cell phone company uses patents from other companies, they wouldn’t be able to make phones if they didn’t. The question becomes whether they license those patents. Unless you have insider knowledge that Xiaomi doesn’t, I tend to believe Hugo Barra who says they do in fact license every patent they use.
i dont need to have insider info for that…i can read,and i know why they do not go to sell in US, which is…well 2. biggest market.
and you are right …it’s not just how they look, but let saz MI2, MI4, MI Note, they are everything but original.
and what you are sainng is if HTC can copy, Xiaomi can copy to!?
but,again…i’m not talking just about Xiaomi…
and….now, when i see how much do you write, i am shore what i write can’t change your mind…. you are well payed to wrote that what you are writing. (no way you are so big fanboy. no one is writing so many posts for free)
Why Xiaomi doesn’t sell smartphones in the US/EU:
1. Carrier subsidies
2. Stigma
3. Patent cross licensing
@bojanradovanovic:disqus read this article: https://www.techinasia.com/chinese-smartphone-makers-eager-sell-phones-west/
(Yes, first post; No, I don’t get payed for writing this; No, I’m not a bot)
Yes….”3. Patent cross licensing”.
And since Xiaomi don’t have much of patents that they own, they nead to pay feed for every phone they sell. and it’s not cheep…or, they can expect lowsuit. and that’s the reason why don’t they go to that big markets.
as easy as that.
Our Xiaomi worker wrote : “Every cell phone company uses patents from other companies, they wouldn’t be able to make phones if they didn’t. The question becomes whether they license those patents”. and i can certainty say…Nokia, Samsung,Lenovo,Apple and rest of brand name manufacturer will wait them on penalty, because they DO license all patens, and they do it just to use it at cort.
ps Interesting article, since i live in EU i don’t have any carrier subsidie as they have in US, and no stigma for me (redmi 1s, was my 4. phone from China, and i had Huawei, Lenovo and Neken)…but i can add one more thing and that is tax on total price of phone and shiping, so they are not any cheaper then some other phones and second is a problem with warranty.
Xiaomi isn’t a hardware company, unlike Apple/Samsung they don’t care about per device profits. So why go after the hard markets like US/Eu if there are still many soft ones left. Patents is probably not even in the top 10 of reasons why they won’t expand to the US for now. (or EU for that matter – at least not with smartphones)
Xiaomi is having great success in developing markets thanks to their Redmi series. We have already seen how budget headsets do in the US with the Moto G. While it has been a sales success it hasn’t sold near the amount of units the Redmi 1s has for Xiaomi in developing markets. Xiaomi will enter America soon but not for the US, for Mexico and Brazil, where the demand for cheap budget phones is much stronger.
Whatever you said is just your opinion since you didn’t bring any source about which patent they might have used without paying.
They operate in India, and since Ericson was able to open a dispute about patents then I would think that Apple could do that too.
The reason they didn’t is that there was no patent infringement.
You speak about USA without any knowledge of the cellphone market.
Truth is that xiaomi wouldnt be able to sell so many phones like they do in China or India.
The reason? Because people don’t buy cellphones here, they get them from carriers with 2 year contract. That’s why you can only see iPhone and galaxy here in the US.
It’s a marketing choice, nothing behind it, but people always see a conspiracy behind it.
To expand internationally you have to put lot of money ahead, for support center,int’l fees etc. It’s not profitable to expand to the us right now, it will probably never happen for the reason I explained you.
i see.
yo have big knowlege about cellphone market, however you wrote: “Because people don’t buy cellphones here, they get them from carriers with 2 year contract. That’s why you can only see iPhone and galaxy here in the US.”
and now, try to explain what is ZTE doing there(t-mobile, at&t)?
if Samsung (apple,Zte… etc.) can have contract with carriers, why can’t Xiaomi, Meizu and rest of them (tele2 in Croatia have Meizu on contract also)?
it would increase their sale (and profit), make them more famous and known, so brand worth would be bigger.
but, they don’t try to do that….even they did open shop in US, they don’t sell smartphones.
one more problem, not just HW patents…its usage of android.
google is giving it for free, but with one condition: gapps!!!
if they sell it without it in china, no one can do nothing about it. but, if they go to US and europe market…google would sue them.
and xiaomi is not xiaomi without MIUI…and MIUI with gapps is not MIUI anymore. it don’t brings money to Xiaomi.
I know that there’s ZTE here, i live in NY and I’m a Knicks fan, and there’s the ZTE logo all over MSG.
What kind of market share do you think ZTE has?
The ZTE sold here are off contract, usually are linked to payasyougo option.
You won’t find the Nubia series, only 40$
Phones sold at Walmart for example.
And why would xiaomi pick the US over India or Brazil or Russia where most people get unlocked phone off contact? Like I said, it’s a market choice.
I don’t know about gapps, we should ask our Indian fellows if gapps is included, i think it is, but again, not sure about that.
Android is open source software, there is no requirement to use Google Apps. Again you speak of something you have no clue about. There is already a company in the US that uses Android but not Google Apps, Amazon. The Fire and Kindle both use a forked version of Android, neither has access to the Google Play store. You can download some Google Apps on them (just like you can with every UI available in China) but they are not built around them like stock Android is.
As for contracts with carriers, there is no incentive for ATT or Verizon to enter into a subsidizing contract with brands most people in the US have never heard of. Not to mention the prices of Xiaomi and Meizu phones would have to increase significantly for subsidization to work. Which means prices in China, the biggest market in the world, would also have to increase significantly which would ultimately be the end of Xiaomi in China. Prices are all tied together no matter where they sell. If they were to enter the US they would be like Blu (Gionee), offering unlocked phones off contract.
The reasons they haven’t entered the US yet are numerous but have little to do with patents. Xiaomi is still a very young company which doesn’t quite have the production capacity or distribution network to enter a market like the US. They don’t have the brand awareness that they have in other countries. Give them 2-5 years and you will start to see the name Xiaomi around the US, sponsoring sporting events, trade shows etc. They need to get the name Xiaomi in peoples minds before they can enter this market. They are already setting up an online store to sell Xiaomi accessories in the US.
About your second paragraph: https://en.wikipedia.org/wiki/Cross-licensing
Everybody sues everyone to do exactly that, but most of the time it’s done quietly. Unless of course one party has a very weak portfolio, the public perception against it and the other party wants PR stunt (Sam vs Apl US: Sam only standard essential patents; US companies very rarely lose against foreigners; Sam copycat image).
Even with a strong portfolio Xiaomi has a strong disadvantage in US legal matters.
Don’t you pay taxes when you buy a phone from a store in your country? As for warranty, you know there is none when you purchase the item.
Well, if there were a store here, people will not be fallen for the fakes. I bought two Xiaomi powerbanks on Lazada that turned out to be fakes. The reason I didn’t buy the Mi4, or the Piston headphones is because I didn’t want to end up with clones as well, so the only way they can really improve sales is to make their products widely available and easily accessable.
I agree a store would be great but its probably not going to happen. People need to do more research before they buy Xiaomi products (or any product for that matter). It sucks that you bought counterfeit merchandise but a quick google search shows thousands of entries for people saying Lazada sold them fake items.
And the Chinese paradox finally happened
China complaining about China.
Economic Cannibalism
they will be soon killing each other:DDD
Shut up and take your medicine, Lei Jun.
You have some serious unresolved Xiaomi anger. What is the real story behind it? Are you a former employee who was fired? Did they put you out of business with one of their numerous acquisitions? Did Lei or Hugo sleep with your wife? Their has to be something personal behind this anger.
No, it’s just absolutely outrageous to hear a chinese company of all companies complaining about counterfeiting.
Its about time chinese companies start getting a taste of what they’ve been doing to the rest of the world.
They should actually take it as a compliment because this might make Xiaomi the first counterfeited Chinese brand. Maybe they should call Guinness World Records again and make it official.
Xiaomi has no history of blatantly copying another company. That have borrowed ideas from Apple but that’s something that happens industry wide (even from Apple themselves). Because Xiaomi is a Chinese company they are not allowed to complain about counterfeiting? They have to just sit back and suffer because some of their counterparts engage/d in the practice?
Yes.
So any company that was around in German in the 1940’s is responsible for the holocaust as well by your logic.
Didn’t you get already that Xiaomi is the devil? 😀
I got that a long time ago, just enjoy arguing with the “Xiaomi is the devil” trolls.
Hey, it’s you. You should seriously just change your name to “I hate Xiaomi” or something.
That doesn’t really make sense.
butthurt fanboy detected!!
Be careful, the Lei Jun is sick and hasn’t taken his medication.
As Xiaomi enthousiast I can only say that the situation is caused by the Xiaomi management. Their Redmi line, Piston earphones and power bank are also very popular outside China but but Xiaomi is slow entering new markets and does not own proper retail channels outside China stores like Xiaomishop (now Honorbuy), Xiaomiworld, etc.only cause confusion as they are not official retail channels. Aliexpress and Alibaba are notorious places for selling shanzhai and counterfeit but also the known e-commerce retailers from China sell counterfeit. Sometimes undeleberate when unable to buy from mi.com or Xiaomi tmall they get fake batches from other parties. Or deleberate selling Xiaomi in-ear headphones in blue or pink metallic which are clearly not Piston or Youth earphones. So brother Jun don’t look only at others but also look in the mirror.
Lol now they know firsthand how apple feels about them as well.
Except Mi phones aren’t counterfeits of iPhones?
They did start of by ripping off iOS and the Mi4 for some reason also looked a bit too much like an iPhone. I never understood why the Mi3 that was in my opinion one of the best looking phones to date got a successor that looked like that.
I never understood how anyone could say the Mi4 looked too much like an Iphone. I own an Mi4 and several family members have iPhones. The only noticeable comparison between the two is they are both white and square shaped. Other than that the Mi4 looks more like a Galaxy S4 than an Iphone.
Bought my 10,400 mAh packs on Merimobiles and my 16,000 mAh packs on GearBest. Both sites are reputable and offer genuine Xiaomi products at great prices.
If you stick to the reputable stores you don’t have to worry about fakes. Its the marketplace stores like Aliexpress that allow anyone to sell stuff where you have to watch out for fakes. I by most of my phones from Antelife, many on this site hate them, but I have had nothing but fast and excellent service from them. For my Xiaomi phones I usually go with Xiaomiworld or Honorbuy. They always have good deals and usually throw in all sorts of added accessories.
Counterfeit Mi Power Banks and Piston headphones are small change loss compared to the onslaught of Xiaomi copycat phones that are now hitting the market. For example, the Mlais M52 RedNote and the Miezu M1 Note are both blatant copies of the Xiaomi RedMi Note. Better Antutu scores don’t necessarily mean a better phone.
I get your point, but what we need to understand is, there are counterfeits and there are ripoffs. A person buying an Mlais M52 Red Note will do so because he wants to buy an Mlais M52 Red Note.. and the M52 Red Note is a rip off. On the other hand, counterfeit would be to sell a FAKE branded Xiaomi device to someone who’s looking to buy the original.
Hey Yash,
Do Xiaomi phones sold in India include gapps or not?
They do have GApps.
Ok, I wanna buy the Xiaomi earphones. Where are all the trusted shops please?
Huh! taste your own medicine!
It’s Xiaomi’s own sales model that causes this. They try to make their products hot and desirable by pretending there is a shortage, and selling limited numbers through official channels, then shoving them out by the truckload through third party sales channels, who usually mark them up. You’ll see a “limited release of 5,000 phones, reservation only” followed by some shop on TMall selling 20k of them. (real ones, not fake ones).
It’s worked for them, but the flip side is they are selling the majority of their phones through the same channel that fakes ones are sold through. It makes it hard for the consumer to tell real from fake. I actually really hate this sales model and it pisses me off to other Chinese phone makers copying it.