This was the first good news that came across after Xiaomi CEO Lei Jun was, once again, in control of the supply chain.
On July 7th, Lei sent out an internal e-mail, announcing the sale of Xiaomi mobile phones during the second quarter of 2017 reached 23.16 million units, ranking this number a historical high since the Xiaomi mobile phone first came out.
In addition, the e-mail also celebrated Xiaomi’s achievement of applying for over 7071 global invention patents last year, and having been granted 2895 patent licenses (half of which are international invention patents).
This is arguably Lei’s greatest achievement since regaining control over the supply chain. In May 2016, Lei sent out an internal e-mail, announcing that he’ll personally be in charge of their own mobile development and supply chain management team. The reason behind replacing Zhou Guangping (vice president and co-founder of Xiaomi) with Lei may in part be due to the declining shares of the market for Xiaomi during the second half of last year. IDC’s report during the first quarter of this year also pointed out that after declining to the same rankings as Huawei, OPPO, and vivo, Xiaomi dropped out of the top five and was even categorized as “miscellaneous”.
According to the data released by IDC on the 2016 global mobile phone sales, Samsung and Apple are still the top grossing companies-ranking either first or second-and has a clear lead in shipment sales. In comparison, the domestic Chinese mobile phone manufacturers such as OPPO and vivo, are the biggest winners of last year, with a growth rate amounting to about 90%. And in contrast to these companies, Xiaomi experienced the greatest loss-declining sales of over 25%.
Since 2015, numerous market research institutions reported that Xiaomi shipments have been gradually declining, along with its market shares. On top of that, insufficient production capacity of the Xiaomi 5, which uses Qaulcomm Snapdragon 820, may be the reason behind its low shipment quantities. In addition, the lack of offline purchasing channels and the business model that relies heavily on online purchases, result in Xioami’s inability to massively distribute their products across multiple cities throughout a highly competitive market. This ultimately affected the sales to a certain extent as well.
Xiaomi’s sales stagnation for the past two years can be traced back to: one, the general stagnation of the overall smart phone industry; and two, Xiaomi’s heavy reliance on online purchases. Following the exploration and experimentations done by MiHome for the past two years, Lei also pointed out in the e-mail that, “With regards to offline sales development, MiHome has, as of July 7th, opened up more than 123 branches across China. This is a major achievement far ahead of their fellow competitors in the market. What’s more, after July 8th, MiHome will be expecting to open up another 14 branches!”
Lei also mentioned that after three years of firm investment and making unremitting efforts, Xiaomi has made major achievements throughout the Indian market. He said, “During the first half of this year, our performance in the Indian market grew by 328%. The market share was ranked second, making the Xiaomi brand a favourite among Indians for cell phones. The RedMi Note4X has become the best-selling mobile phone throughout India.”At the same time, Xiaomi has also made similar achievements throughout other countries including Indonesia, Russia, and Ukraine.
This article by Fang Yuanjing originally appeared in 36kr and was translated by Pandaily.
Click here to read the original Chinese article.