Xiaomi: Entering International Markets: Presented By: Prashant Shukla Sumit Sharma

XIAOMI : ENTERING
INTERNATIONAL MARKETS
Presented By : Prashant Shukla
Sumit sharma
Introduction
 Xiaomi Inc. headquartered in Beijing China, is a privately
owned electronics company that designs, develops, and sells
smart phones, mobile apps, and other technology products.
 Began its operation in August 2010 with Android based
firmware MIUI (pronounced as “Me You I”).
 Expanded into other consumer electronics including tablets,
wifi network routers, Smart TV, Set-top box, cloud storage
and cloud computing service, instant messenger, and power
bank.
The Internationalization of Chinese
smartphone brands
 First Chinese smartphone brands that tried to internationlize
were Huawei and ZTE. They first established good
relationships with foreign operators by providing
telecommunications infrastructure or producing phones from
them.
 Lenovo by purchasing motorola. It acquired 2000 patients by
motorola and 16000 by google
 Coolpad by establishing research centers in the US and India.
 Gionee Sponsored KKR and established funding charity.
 OnePlus by its invitation system of marketing.
Xiaomi’s International Practice
 Chinese smartphone market was becoming saturated.
 By 2015 1.32 billion about 95% population of china had
smartphone. So no room for the market to grow.
 Xiaomi’s relatively low price and extremly low profit margin
had put xiaomi in critical position.
 According to IDC average price of xiaomi in 2015 was
US$141 compared to 213 of Huawei, 231 of OPPO and 208
of VIVO.
Xiaomi in Hong Kong and Taiwan
 Hong kong and Taiwan were physically close to Mainland
china so xiaomi targeted the “ Circle of Chinese Culture “ as
first overseas attempt.
 It started to sell through Ecommerce platforms, xiaomi
website using paypal for payments.
 It also collaborated with local operators and ecommerce
platforms.
 In order to provide better services and communicate with
users xiaomi opened its MIUI forum for fans in HongKong
and Taiwan.
Xiaomi in India and Southeast Asia
Three factors emerged for the choice of new market
 The proportion of young people in the population.
 A fast growing period of ecommerce.
 And operators relatively weak control over phone selling
channels.
 In 2014 it started selling its phone and hardware in

Singapore, Malaysia, Indonesia, Thailand the Philippines and
India
Continued
 First, Xiaomi launched its official website in these countries and
partnered with local ecommerce platforms.
For example Xiaomi initially signed up exclusively with flipkart
which was the biggest ecommerce platform in india, and then
established strategic relationships with two major ecommerce
platforms Amazon and Snapdeal.
 Second, xiaomi established an overseas service team and
outsourced after sales service to local companies.
 Third, after considering the underdeveloped logistics and
payment system, xiaomi reached an agreement with electronic
commercial platform Lazada group to sell xiaomi phones in
Philippines, Indonesia and Malaysia.
 In india it not only promoted through full page newspaper
advertisements, but also organised large “Xiaomi Fan Festivals”.
Xiaomi’s Internationalization
Dilemma
Trust Crisis :-
 Xiaomi used hunger marketing in taiwan in dec 2013 flash
sales offered for 10000, 10000 & 8000 at a discounted price.
 The items sold out in 9min50se for first event 1min8sec for
second and 25 sec for third.
 After complaints Taiwan fair trade commission found that
only 26220 units were sold not the 28000 claimed.
 The commission fined Xiaomi US $20,000.
Product patent deficiency
 Ericsson filed a suit against xiaomi and the court granted
ericsson an injuction barring xiaomi from importing and
selling phones in india dropping single quarter sales by 46%.
 Xiaomi has only 6773 patents and they are still a long way
compared to Ericsson and Apple patent holdings, but the
research required large research staff and huge financial
resources. This restricted overseas sales of xiaomi phones
for a long time.
Unsatisfactory sales
 Xiaomis sales through website and collaborative ecommerce
platforms were unsatisfactory so they seek help from local
dealers and operators.
For example in India from bharti Airtel and the MobileStore with
over 800 offline stores but still the sales were unsatisfactory.
 Xiaomi’s overseas sales was only 8.33% compared to
Huawei 41% according to IDC.
 In 2014 its share in Singapore was 16%, 7.6% in Taiwan,
6.7% in Hong Kong, 4.4% in Malaysia, 1.6% in India, 0.7% in
Indonesia and 0.3% in Philippines.
 Moreover more and more Chinese smartphones brands were
entering the Indian market putting tremendous pressure on
xiaomi.
Two strategies.
 Seek offline partners and establish an international strategic
alliance. Offline partners could provide more channels to
xiaomi and the partners could share the risk of expanding
into overseas market.
 Develop MIUI and its peripheral smart hardware, allowing
xiaomi to pursue a new market share and reduce patents
disputes.

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XIAOMI : ENTERING

 In 2014 it started selling its phone and hardware in

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