First, the idea conquered India. today, the idea wants to win over Europe.
Chinese smartphone maker Xiaomi can be producing an aggressive play for European markets like France, Italy in addition to Spain. The expansion comes ahead of the company’s highly anticipated IPO, which can be likely to raise billions of dollars in which summer.
Xiaomi can be best known for selling cheap, high performance smartphones. The bulk of its sales — more than 70% — are in China. nevertheless the idea has made inroads in various other Asian countries, recently overtaking global leader Samsung to become the top smartphone seller in India.
today, the Chinese company can be looking to repeat in which success inside the more mature markets of Europe, in addition to the idea’s off to a strong start.
Xiaomi can be currently the fourth largest smartphone company in Europe, behind Samsung (, )Apple ( in addition to Chinese rival Huawei, according to research firms IDC in addition to Canalys. the idea’s competing strongly in Spain, Greece in addition to Russia. )
Francisco Jeronimo, a London-based analyst with IDC, said the buzz surrounding Xiaomi in Europe reminds him of the early success of the iPhone.
“I haven’t seen any various other vendor able to attract in addition to push demand through consumers directly like Xiaomi can be doing today in addition to Apple did inside the past,” he said.
Xiaomi can be riding the momentum, launching in France in addition to Italy with splashy brand-new stores in Paris in addition to Milan late last month.
Although the company has achieved rapid growth, the idea’s not nipping at the heels of the top players yet. According to Canalys, Xiaomi sold 2.4 million phones in Europe last quarter, far fewer than Samsung’s 15.2 million, Apple’s 10.2 million in addition to Huawei’s 7.4 million.
“the idea doesn’t seem like a huge amount at the moment, nevertheless the rate they’re expanding can be impressive, considering the idea’s been less than a year” since Xiaomi entered the European market, said Ben Stanton, a Canalys analyst based inside the United Kingdom.
Can the idea win over carriers?
Maintaining in which growth rate, especially in countries like France in addition to the United Kingdom, will depend a great deal on Xiaomi’s relationships with wireless carriers. As many as 50% of consumers in western European buy their smartphones through carriers, according to IDC.
Forging ties with European carriers can be more complicated than Xiaomi’s preferred strategy of selling phones directly through online sales, retailers or its own stores.
For one thing, Xiaomi wants to keep prices low, announcing last year in which the idea might cap smartphone profit margins at 5%. So the margins Xiaomi can be offering carriers “are not very Great,” producing them wary of partnering with the company, according to Jeronimo.
Related: How China’s Xiaomi took India’s smartphone market by storm
Xiaomi will also have to make alterations to its phones, which will increase production costs.
“If the idea wants to work with carriers, the idea has to learn to do things like SIM-locking phones, which has to be done in factory,” Stanton said.
Half the cost of an iPhone
Xiaomi appears willing to adapt to the different markets, partnering with CK Hutchison’s ( mobile carrier network Three last month. Under the deal, Xiaomi phones will be sold in Three’s stores inside the United Kingdom, Ireland, Austria, Italy, Denmark in addition to Sweden. )
Xiaomi has so far succeeded in Europe by wrestling market share away through various other low- in addition to mid-range smartphone makers; the vast majority of phones the idea sells in Europe cost less than €0 ($235).
“What consumers want can be a device in which looks like an iPhone, performs like an iPhone, nevertheless can be half the cost of an iPhone … in addition to Xiaomi has been able to nail the idea,” Jeronimo said.
inside the next year, analysts predict Xiaomi will focus on expanding into as many European markets as possible, in addition to eventually start pushing pricier smartphones.
Related: Chinese smartphone maker Xiaomi files for huge Hong Kong IPO
can be the US next?
Xiaomi can be also interested inside the United States — CEO Lei Jun has previously said he wants Xiaomi to make its US debut by early next year.
nevertheless in which could be a tougher challenge than Europe. Major Chinese smartphone makers Huawei in addition to ZTE ( have faced significant challenges inside the United States, including accusations through government agencies in which their devices could pose security risks because of ties to the Chinese government. Huawei in addition to ZTE dispute the claims. )
Xiaomi hopes to avoid in which fate, in addition to could use success in Europe to help shape its strategy for the United States.
“Europe can be the stepping stone,” Stanton said.
sy88pgw (Hong Kong) First published June 12, 2018: 6:50 AM ET