Photo: Kim Kyung-Hoon / Reuters
The Chinese company Xiaomi is going to the end of the year to be in the top 5 by revenue in the domestic market. The part of market participants were skeptical of the plan, the other pointed to the fact that Chinese brands together occupy a third of the market
On the purpose to be in the top 5 largest smartphone manufacturers by revenue in Russia, told RBC senior Vice-President of Xiaomi, Wang Xiang. According to him, the products of the company gets here “very good response”. “Hence the aggressive goal — to enter the top five vendors in the Russian market”, — he said.
Next year Xiaomi wants to move into the top 5 even higher. He could not clarify what the position is now Xiaomi is in Russia, referring to the fact that the company has entered this market recently.
Representatives Xiaomi earlier said that the Russian market of smartphones for them is the most important outside China. In particular, it said TASS President of Xiaomi lei Jun. However, the company first called its ambitions on the situation in the domestic market.
To achieve the aim of Xiaomi intends, primarily, through development of own retail. Until the end of the year in Russia will open 20 more stores manufacturer, said Wang Xiang. New stores will open in Moscow, Saint-Petersburg, Ekaterinburg and other cities. Xiaomi now have six stores.
“We’re trying to improve, so that the cost of the store approached a sales online. Improving efficiency, we reduce costs and set very attractive prices for the products. This is a key thing in our business model,” said Wang Xiang.
Less than a year on the market
In the Chinese market Xiaomi has been operating since 2010. The first product was MIUI firmware for Android, and since 2011 the company has started to produce smartphones, accessories, fitness bracelets, home electronics. In late 2014, the project invested Fund DST Global Yuri Milner. With a number of investors, he invested $1.1 billion, appreciate all Xiaomi at $45 billion, wrote The Wall Street Journal.
By the end of 2016 in China, Xiaomi ranked fifth with a share of 8.9%, having 41.5 million smartphones, according to IDC. On the home market the company ahead of Apple with a share of 9.6%, as well as local Vivo (14.8 per cent), Huawei (16,4%) and Orro (16.8 percent).
In Russia Xiaomi officially released in the summer of 2016. Her first products appeared in “the Messenger”, “Euroset” and other retail, and in the autumn the company “Smart orange” (the distributor of the RDC Group) began to develop a retail network under the brand name of Xiaomi in the country. However, due to the fact that Xiaomi devices were imported in Russia unofficially, at the time of release on the domestic market, the manufacturer already had a 0.4% share in the domestic smartphone market in volume and 0.8 percent in volume of the market, wrote “Vedomosti” with reference to the representative of MTS Dmitry Solodovnikov.
By the end of 2016, Xiaomi entered into the Russian top 10 or the number of units sold or the revenue from them, were evaluated by MTS. According to “Coherent”, in the first quarter of 2017, Xiaomi has entered the top 10 by revenue, but not on the number of units sold. Another representative of a large retail store said that the manufacturer has occupied 8-e a place on sales and the 12th — the number of smartphones sold in the first quarter.
2015-2016 sales and market share of smartphones of Chinese brands in General began to grow, like the representative of “Coherent”. By evaluating this company in the first quarter of 2017 on popular Chinese brands (Lenovo, Alcatel, ZTE, Meizu, Huawei, together with the sub-brand Honor, Xiaomi, ASUS, and HTC) were cumulatively 35% market share in units and 28% in the money.
However, only Alcatel, HTC and ASUS are in the market for quite a long time. Huawei has launched a smartphone under its own brand in 2011 (until that time, the vehicles the manufacturer sold in the country, but under the brands of mobile operators). A year later smartphones under its own brand in the country has represented ZTE (before his device was also represented in Russia under the brands of operators), later, Lenovo and Meizu.
“If “the dawn” of the appearance in Russia of smartphones of Chinese brands sold primarily in low price segments, in recent years, their “influence” extends to middle and high price category. Now buyers willing to buy Chinese brands gadgets for 30-40 thousand rubles”, — said the representative of “Coherent”. The purchase of such devices has become more urgent due to the fall in the real income of customers. “Chinese companies offer high-quality and functional devices at relatively affordable prices. In recent years, these devices are often not inferior, and in some respects superior to traditional leaders in terms of technical characteristics” — said the representative of “Coherent”.
The General Director it is information-analytical Agency Telecom Daily Denis Kuskov said that the share of Chinese brands, especially new, not stable. For them every event is a new release of the flagships. For a qualitative breakthrough, you must have a good advertising budget, developed relationship with retailers, says Grand. Project Manager Hi-Tech Mail.Ru Dmitry Ryabinin indicates that of the Chinese brands in the Russian market of smartphones of the most successful ZTE, Huawei and Meizu. “A few Chinese manufacturers, who claim their share — as the old for our market, like Lenovo, Alcatel, and relatively new like Xiaomi, as well as future, like Vivo, Oppo. I am sure that 2017 will be extremely challenging for all players. To begin a meat grinder with a very high degree of competition, and in the final landscape of brands will significantly change, especially the segment about 5% can be from more than a dozen brands, including Sino-Finnish Nokia,” said Ryabinin.
If Xiaomi will enter the Russian top 5 smartphone manufacturers in terms of revenue, he may retire Japanese Sony. The representative of Sony Mobile (the unit responsible for the sale of mobile devices) could not comment on the plans of Xiaomi.
According to the Director of the Department of procurement “Euroset” Alexey Shirokov, at the moment, Xiaomi is poorly represented in the Russian retail networks. “If the company can adjust its strategy, it will be said to improve positions, but so far the odds are low,” — said Shirokov.
More skeptical leading Mobile Research analyst Eldar Murtazin. He believes that the company has no chance to place in the top five this year. “Above 3%, it will be difficult to jump,” he says, citing the lack of distribution and the fact that retailers presented not too widely.
However, the representative of “MegaFon” believes that the vendor has all the chances to increase sales as its smartphones have a good ratio of “price-quality”. “Of course, this will require a significant increase in marketing activity. As Xiaomi for the majority of Russians still new brand,” he said. At the end of the first quarter of 2017, the network of “MegaFon” was about 600 thousand of Xiaomi smartphones, which is almost 10 times more than last year. According to the representative of the company for the last three months the number of devices the Chinese brand in the base of MegaFon grew by 20%.