Does Xiaomi have the power to become a household name?

With little more than five years trading under its belt, Xiaomi has taken the Chinese smartphone market by storm. Earlier this year, it dethroned Apple to take the number one spot in the world’s largest smartphone market – China. The company has always remained true to its strategy of launching in developing countries as opposed to richer, western markets. With this strategy in mind can Xiaomi continue its success and become a household name outside of the Chinese market?

Xiaomi and the mobile web…

To test the longevity of Xiaomi’s monopolising impact, 51Degrees took a look at Xiaomi device web usage as a share of all smartphone web traffic over the last 6 months in China, India and Malaysia. Dubbed ‘China’s Apple’ it is unsurprising that China’s usage has remained around the steady 5% mark.

However, much like any new smartphone manufacturer, there have been peaks and troughs along the way. It could be argued that the peaks are due to its renowned ‘flashy’ marketing strategy. 2015 has seen an influx of new Xiaomi devices introducing the Mi Note, Mi 4i and Redmi 2. These stylish, Apple like, products have vastly contributed to this year’s success.

Both India and Malaysia’s adoption of Xiaomi devices has been slow and steady. The company’s journey into India has not been a smooth one either with patent disputes restraining it from manufacturing, assembling, importing, selling or advertising devices. Xiaomi have not been afraid to acknowledge the importance of India becoming its largest overseas market. With compliance deals in place, 2% of India’s internet usage now takes place on Xiaomi devices.

Although the India market continues to increase, within the last month usage in Malaysia and China has dropped by almost 2%. IDC’s Kitty Fok recently discussed China’s decreasing shipments “Smartphones are becoming increasingly saturated in China. It is oftentimes thought of as an emerging market but the reality is that the vast majority of phones sold in China today are smartphones, similar to other mature markets like the US, UK, Australia, and Japan. Just like these markets, convincing existing users, as well as feature phone users, to upgrade to new smartphones will now be the key to further growth in the China market”. The issue of upgrading phones is likely to be an ongoing issue, highlighted by 51Degrees in previous analysis here.

With sales and shipment levels decreasing, Xaomi needs to consider its expansion into the overseas market and it is currently taking significant steps towards this. On June 30, the company launched its latest smartphone, the Redmi 2, in Brazil, its first step outside of Asia. Xiaomi reportedly also has plans to tackle Russia, Turkey and Thailand within the next year. Ultimately, becoming a household name lies in Xiaomi’s ability to challenge a reduction in usage and proactively manage future strategy.

Mobile Industry Review would like to thank Ellie Newton from XL Communications Ltd, and 51Degrees, for the information contained in this article.