Xiaomi, the Chinese smartphone maker has pledged to regain its lost position as the top smartphone seller in the Chinese market. The company intends to regain that position within a period of 10 quarters. Xiaomi had lost the position as the top smartphone company in its domestic market in 2016. This was pledged by the company just ahead of its anticipated public share offering to take place later this year.
While pledging to focus on the expansion of the company outside of China, Xiaomi founder and CEO Lei Jun cited the aspect of the company exceeding expectations for its operating profit of 100 billion yuan (US$15.9 billion) in October 2017 which is quite ahead of the schedule that the company had set itself. This was said in a speech by the company CEO to the employees.
“In 2018, we will vigorously expand into overseas markets, while hitting back in the domestic market,” Lei said. “We want to climb back to the top spot in China in 10 quarters.”
According to research firm IDC, Xiaomi has a total market share of 12.4 per cent in the Chinese smartphone market and is preceded by Huawei, Oppo, and Vivo, at fourth position at present. But the Chinese marker for smartphones has dwindled by 5 per cent in 2017 – a first time for the industry in the last nine years and this is another challenge for Xiaomi. The reason for this slowdown is the Chinese market attaining a certain stage of maturity where the middle-class smartphone users are in no hurry to upgrade as yet.
While expressing a resolute determination to push ahead with its strategy of capturing greater market share, Lei however anticipated that the in 2018, there would be a further shrinking of the Chinese smartphone market in addition to more intense competition between the market players.
“China is the foundation of Xiaomi, the world’s largest consumer electronics market, and the high ground that global smartphone makers are vying for,” Lei said. “Only if we win the local market can we continue to support steady expansion overseas.”
While noting good opportunities of increasing sale in India Indonesia and Vietnam, he is betting on a strategy for the company where it would focus on selling of smartphones to the people at the grass root of the Chinese market such as small towns and even in villages.
Lei also noted that in comparison to tech giants such as Apple, Facebook, Google, Alibaba Group Holding, Tencent Holdings and Huawei, Xiaomi used up just seven years to exceed operating revenues of 100 billion yuan which is faster than any of the major global tech companies.
An IPO has been set for a target date of September by Xiaomi. It is being touted to be the largest tech IPO this year. sources said that Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan and Morgan Stanley have already been appointed by the company to assist in the IPO issuance.
(Adapted from SCMP.com)