Should Xiaomi Expand to U.S., Europe Now?
Xiaomi is well off pace to meet its stated goal of selling up to 100 million smartphones this year, according to new figures the Chinese company released for the first half of this year.
The company said that so far it has sold 34.7 million handsets, the majority of which it has peddled in its native China with some sales in Brazil and India adding to the total.
Hefty competition from rivals copying its sales model of low-cost phones sporting high-end features and a 4 percent slowdown in the China market (based on researcher IDC’s figures) appear to have affected the vendor’s performance to this point.
Still, Xiaomi chief executive Lei Jun issued a statement in which he said the smartphone maker’s growth rate bested the overall market.
“Even with the China smartphone market slowing down, we did a stellar job of posting a 33 percent growth on last year’s numbers. It can be said that we outperformed the market and produced an excellent report card,” he said.
However, even though Xiaomi’s 33 percent year-over-year growth is impressive, it doesn’t compare to the company’s triple digit growth of years past.
If Xiaomi is to hit the 100 million units sold mark, will it need to expand out of China and emerging markets to the U.S. and Europe sooner than planned?
Ben Wood, a CCS Insight analyst, told CNBC this week that Xiaomi’s growth potential in China is limited but in emerging markets such as Brazil and India “there is a lot of volume potential there and if they can bring that online, there is significant upside for them.”
Xiaomi currently isn’t selling smartphones in the U.S. or Europe but has established online stores to sell accessories. Might the company need to leverage its online presence in the U.S. and Europe to counter the slowdown in China?
Lei already has signaled Xiaomi intends to add to its revenue totals with services sales. In April, he said he wants to triple its mobile services sales this year to about $1 billion. The device maker figures it can substantially boost sales of entertainment, financial and other mobile services to about $1 billion, or 6 percent of its expected $16 billion in sales for 2015.