Date
16 December 2017
Xiaomi faces a huge challenge in sustaining its growth pace in the coming years after emerging as the world's third largest smartphone vendor. Photo: HKEJ
Xiaomi faces a huge challenge in sustaining its growth pace in the coming years after emerging as the world's third largest smartphone vendor. Photo: HKEJ

Xiaomi ‘may end up like BlackBerry’ after initial growth: ACCA

​​Chinese smartphone maker Xiaomi​ Inc. may find it difficult to sustain its growth pace going forward after making rapid strides in its first few years, according to an industry observer.

“It is possible to grow quickly at first, but the big challenge for Xiaomi is sustainability of the growth in the next five years,” said Andrew Atherton, who authored a report on China’s next potential 100 global companies.

“It may end up like BlackBerry (BBRY.US)​​, facing challenges over a long period of time,” ​said Atherton, who is a professor of enterprise and deputy vice-chancellor at Britain’s Lancaster University.

​The comments came as the Association of Chartered Certified Accountants (ACCA), a global accounting body, issued a report Tuesday to identify the next 100 companies in China which could become big players on the global stage in the coming three to five years, following in the footsteps of firms such as Lenovo Group Ltd. (00992.HK) and Alibaba Group (BABA.US)​.

A​therton​,​ who was involved in the study, ​said Xiaomi — which is now the world’s third largest smartphone vendor — was not included in the list as the company started its sales only in 2011. In preparing The Next 100 Global Giants report, the authors looked into companies’ revenue growth between 2008 and 2012.

Among the next 100 potential global giants from China, nearly 20 percent were from the computers and communication equipment field, while 13 percent were from the services sector. Another 13 percent was accounted for by electronics firms while 9 percent were from internet and information segment.

​Some of them are listed firms, including O-Net Communications Group Ltd. (00877.HK), which was ranked at 43 on the list; and Shanghai Fosun Pharmaceutical (Group) Co. Ltd. (02196.HK), which was at 54.

E-commerce player China Dangdang Inc. (DANG.US) was ranked at 62, SouFun Holdings Ltd. (SFUN.US) at 86 and Tech Pro Technology Development Ltd. (03823.HK) at 92.​

Ctrip.com International Ltd. was in the 26th position while drugs retailer Beijing Tong Ren Tang was ranked at 36, according to the report.

The global giants are defined as having robust growth, strong presence in their niche businesses, and good industry knowledge and understanding of customer needs.

The ranking was mainly based on five criteria including turnover, annual growth over four to five years, domestic presence, extent of international activity and business model and strategy, said Eunice Chu, a policy head at ACCA.

Apart from those 100 firms, six Chinese banks are expected to emerge as top players, posting annual growth rates of over 20 percent.

They are Industrial Bank Co. Ltd. (601166.CN), China CITIC Bank Corp. Ltd. (00998.HK, 601998.CN), China Minsheng Bank Corp. Ltd. (01988.HK, 600016.CN), Shanghai Pudong Development Bank Co. Ltd., Hua Xia Bank Co. Ltd. (600015.CN) and Ping An Bank.

They are also part of the 100 largest banks in the world in terms of capitalization.

– Contact the reporter at [email protected]

RC

Ayishah Ma is a financial reporter on Greater China issues.

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