Xiaomi is shifting its focus to expanding its exposure overseas after its mega initial public offering in Hong Kong earlier this month. On Tuesday the company teamed up with Google to unveil a new series of Android One smartphones in Spain to boost its market share in the European continent.
The Chinese smartphone maker unveiled two new products in the press event in Madrid attended by journalists from all over the world including Hong Kong. Mi A2 and Mi A2 Lite are the successors to last year’s Mi A1. Mi A2 came with a 5.99-inch display with an aspect ratio of 18:9, a Snapdragon 660 chip, and a dual-camera with 12- and 20-megapixel sensors, and a 20-megapixel selfie camera with a flash. Prices start from 249 euros (US$292.15). Mi A2 Lite is an entry-level phone with a lower-tier hardware at a cheaper price.
While the trade dispute between China and the United States looks far from getting settled, Xiaomi, which is eagerly expanding overseas to justify its extremely high enterprise valuation, is turning to the European market for growth.
According to figures from market research firm Canalys, Xiaomi ranked fourth in the European smartphone market in the first quarter of this year, shipping 2.4 million units for a market share of 5.3 percent.
Xiaomi is working closely with distributors, such as Ingram Micro and ABC Data, to drive products into retail stores. Shipments are expected to grow further in the coming quarter due to the contribution of new products such as Mi 8, Mi Mix 2s and Mi A2.
“It doesn’t seem like a huge amount at the moment, but the rate they’re expanding is impressive, considering it’s been less than a year” since Xiaomi entered the European market, said Canalys analyst Ben Stanton.
Since the start of the year, Xiaomi has established its presence in Spain, France and Italy, and will soon expand to the United Kingdom, the Netherlands and Germany.
A Xiaomi senior executive noted that Europe is not as competitive as other mature markets, thus giving Xiaomi an opportunity to break the dominance of Samsung and Apple, and challenge another Chinese smartphone maker Huawei Technologies, which has a more than 16 percent market share.
It may not be very hard for Xiaomi to surpass Huawei in Europe, considering that it has a vast experience in competing with the fellow Chinese brand elsewhere. Also, Xiaomi has forged a collaboration with Hong Kong’s CK Hutchison Group, which has thousands of retail stores in Europe that could carry its smartphones. Xiaomi may also tap into the customers signing up for mobile service plans with CK Hutchison’s mobile network 3 in European markets.
But Xiaomi should bear in mind that Europe is not a single, homogeneous market. It comprises countries with peoples of different tastes and preferences as well as market conditions. Xiaomi must be able to come up with a very-well-customized plan for each of these markets to appeal to target users.
In fact, Xiaomi, in launching Mi A2 and Mi A2 Lite in Spain, shows that it is highly cognizant of the European smartphone user profile. Some European users are tech-savvy and want top-of-the-line models with the most up-to-date hardware and software combinations. That’s why Mi 8, Mi Mix 2S and A2 are made available in the market to meet their needs. But there is also a group of users who have no intention of chasing the latest technology and are content with simple functions such as talking, texting and taking pictures. That’s why there’s A2 Lite for them at a lower cost.
Apart from smartphone sales, Xiaomi also aims to expand its Internet of Things network by selling smart gadgets and appliances to European customers. For example, the company has launched its own-brand scooters in Spain, France and Italy. It is also selling the Mi Notebook PC in Spain with a customized Spanish keyboard.
Xiaomi has a deep experience in both online and offline retail business, but the company also needs to strengthen its partnership with local mobile operators to boost sales. After all, sales still provide the best reason for its aggressive expansion overseas.
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