Xiaomi, the Chinese giant seems to be slowing down. Is it due to a lack of presence in the offline market?
Xiaomi, the Chinese company headquartered in Beijing, best known for their relatively cheap handsets, isn’t growing as much as the competition. While they did release a huge amount of devices lately, they still got ripped off of their supremacy in the Chinese market, dropping from the first to the fourth place.
Who dethroned them, though? Companies such as OPPO, Vivo and Huawei, which (not by chance) all share one common factor: presence in offline markets.
If we take OPPO as an example, we see how its offline market contributed for more than 70% of total sales in China, with an offline retail penetration beyond tier-2 and tier-3 cities, allowing OPPO to reach the 13 percent of the total market share. Same goes for Vivo and Huawei, although with smaller numbers.
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Xiaomi, on the other side, has always been an “internet company”, as they like to be called. While this gave them a big push at the beginning (as people were finding good devices at lower prices) it doesn’t seem to be enough anymore.
Earlier this year, at the Barcelona MWC, everybody was expecting the Mi5 to be the opening door for Xiaomi into the world distribution through offline retail, but it hasn’t been the case. Resulting in the relatively poor success of the device, among other factors.
Hence, maybe it’s time for Xiaomi to follow its Chinese competitors and finally get their hands in the offline market. Although we’ve no way of knowing the final development, we know for certain that the current marketing strategy isn’t giving great results.
Nonetheless, what are your thoughts? Do you think it’s going to happen and if so, when? Let us know in the comments section below.
Blaming the offline market is BS.
Xiaomi lost share because they failed to deliver and because online competition got tougher.
Last year they were very late to update devices, the updates were often insufficient and the Mi Note aimed for higher prices. They raised funds in late 2014 and changed strategy.
They lost share to new or small players that decided to get aggressive like LeEco, Meizu, 360 Mobile and they lost online share to most other major players that lost carrier subs and had to focus more on online.
Their ROM being seen as slow, bloated and full of ads and their less than stellar support made things worse.
Their international expansion stumbled , India got difficult, they had to put the breaks on in Brazil….
The lack of ideas and originality is a problem too.
To make it worse they also panicked and started spamming with devices. They need a product line that is easy to remember and each device launch to have a high impact. At this point it is difficult to remember all their devices.Used to be 1s, Note and Mi4 and maybe Mi3 still selling and all were pretty great. A mid ranger at a great price, a bigger and meaner midranger at a great price and a proper flagship at a great price.Very easy to know what’s what and each device was pretty much leading in value.
Expanding offline would result in higher prices and doesn’t address any of their many problems, would result in even more online share loses and uncertain chances of offline success.
They need to fix everything that is wrong with Xiaomi before making it worse. Blaming it on anything but yourself doesn’t solve the problem. They need to understand that they haven’t done enough and a lot of things can be done better. Without that nothing will help in the long run.
Wow, I completely agree with everything you said there; never thought I would say that. Xiaomi’s problems run much, much deeper than no offline presence, something I’ve said for a long time. I also think Meizu are going to suffer in the same way as they too are releasing too many handsets that overlap way too much in specs and pricing. Whilst I may not agree with Vivo and Oppo’s high pricing, someone is clearly buying their products at a much greater rate than that of Xiaomi.
Oppo and Vivo hare interesting case studies, they have successfully markets themselves as lifestyle products that people will pay big money for even when the specs don’t always match up. Oppo has also benefited from being on of the first to launch in Europe officially.
I am not sure what is going on with Meizu. The Mx6 and M3 were both excellent launches for them and sold very well. And despite the backlash from many on sites like this they actually had a good launch of the Pro 6. But now they seem to have a new phone every month and the newer phones are using the same exact specs as the older phones just with newer body styles. I think a lot of it is traced back to the Ali investment, they want to get Yun Os on as many devices as possible, even if it means destroying Meizu in the process. I am very interested to see Meizu’s sales at the end of this year. Meizu has developed a very loyal fanbase in China but I am not sure it is big enough for all these new products coming out.
Brazil was a huge gamble that never paid off but also never made sense. It was more of a personal mission of Hugo Barra, who is from Brazil, and that got in the way of sound business advice. Brazil is one of the hardest countries in the world for an international business to sell in. They have one of the worst and most confusing tax system in any country. Xiaomi should have gone to Russia, Turkey or Mexico like they had originally planned.
But I agree with most of what else you are saying, it has been a bad few years for Xiaomi. It seems like their success has been their own worst enemy.
As brazillian I’m totally agree with you, they could have made success here, but not that time.
Of topic!
You remember argument we had over which is a better SoC? S562 or X25?
How you claimd haw 10 cores are much better solution that Core Pilot is fantastic & how it will save a lots of power. Also how it has a large manufacturing advantage.
Well hire you go:
http://www.anandtech.com/show/10545/the-meizu-pro-6-review/5
All of that demystified along with answers about poor GPU performance & thermall throttling.
Now to keep thngs more in line of our real debate take a close look at the data at “balanced performance” mode & do also compare it to the S650 in the Xiaomi Redmi 3 (Pro). So you see deca core & power savings is a pure bullshit & how even best from MTK (X25) purely loses even from S650.
I whose honestly surprised that it losses even in arias that it should have scored easily that actually tell us how Core Pilot (at least in this deca core) is solution that is far from anything good. Also take a look at S820 power metric as I also declared how it’s a very far from good design.
Hopefully in the future you will actually at least think about what I think (not that I have to be right tho).
You are one of the rare peple hire that I actually can argue with about things like that around hire so I would like to continue that practice in the future. ????
One more thing. ?
I don’t comment his bullshit anymore, I just laugh quietly because then he gets offended and starts acting like a child.