War Declared!: Xiaomi Battles To Reinvent Itself As China’s Apple & Samsung

Source: scmp.com

It seems like Xiaomi’s CEO, Lei Jun, has declared war against Apple and Samsung as Xiaomi battles to reinvent itself as China’s Apple and Samsung. Let’s see.

Xiaomi’s CEO, Lei Jun, in February made an announcement that, in other words, was a declaration of war against Apple and Samsung in China. A matter of “life and death,” it is being called, as Xiaomi battles to reinvent itself as China’s Apple and Samsung.

Lei Jun, on Weibo (a Chinese Twitter-like app), pledged to make Xiaomi the best-selling premium brand in China. And apparently, Lei Jun seems pretty serious about it now, as he termed it “a war of life and death.”

Xiaomi, as many of you would know, isn’t just a mobile phone manufacturing company; it also manufactures many things, from cookers to e-scooters. If everything goes well, the company aims to launch it’s EVs (electric vehicles) by 2024, beating its competitor, Apple.

Why Is Xiaomi Having A Hard Time?

Why Is Xiaomi Having A Hard Time
Source: smartprix.com

As we know the whole world has been hit by a shortage of chips. Also, China has begun a crackdown to get big tech industries (companies) under control.

The uncertainty of whether Xiaomi will be able to actually compete against its rivals, Apple and others, or not has resulted in the 50% fall of Xiaomi’s Hong Kong shares.

Ivan Lam, a smartphone expert analyst, stated that Xiaomi is trying to fight on three fronts, smartphones, EVS, and the internet, among other issues. Each front has its own big players. Since Xiaomi is determined or adamant about having it all, it will be tough.

However, if the current and former employees’ and experts’ assessment is to be believed, Xiaomi faces a much bigger issue. You can also call it the largest obstacle in Xiaomi’s way to surpassing Apple as well as Samsung is making the customers believe in its high-end pedigree.

Xiaomi launched its first device in 2010; however, with the launch of Mi phones in 2011, Xiaomi became a brand in domestic and international markets, especially in India. The customers who bought the phone at cheaper rates became a part of a community called “Mi fen.”

Despite all that, Xiaomi couldn’t become the top seller in China; that spot is held by HONOR today, followed by Vivo and Oppo.

While Xiaomi’s battle to reinvent itself as China’s Apple and Samsung intensifies, its own former executives doubt that it will ever happen, or at least easily. According to them, it will be very challenging to beat Apple and Samsung because of the lack of brand power.

It’s obvious that Xiaomi doesn’t have the brand power Apple and Samsung have. Moreover, Xiaomi tries to sell facts, whereas Apple and Samsung sell emotions, hence, the brand power.

The former executive further says that most customers nowadays don’t care much about specs, which is exactly what Xiaomi is having a hard time coping with.

Xiaomi’s smartphones are advanced without a doubt. An example of that is its most basic version of 12 series phones, being sold at 749$, which is designed to compete with the iPhone 13, Apple’s latest product, being sold at 799$.

Furthermore, Lei Jun (Xiaomi’s CEO) also vowed to open 20,000 more phone stores across China, in addition to the 10,000 it already owns in the country.

The company also has reviewed its marketing strategy and has removed the “Mi” from its latest products. But the long-term goals of the company can’t be achieved by simply changing a name. The company’s effort to break free of its budget hasn’t played out in its favor.

An ex-executive has said that creating a Chinese brand power is a task “very few” people have been able to perform and exceed. A brand’s value is of high importance in almost all developed countries, said the ex-executive.

To overcome all these obstacles, Xiaomi Inc. has announced an investment of around 16 billion$ (100+ billion Yuan) in research and development over five years. Xiaomi is also trying to copy its Indian marketing strategy in international and domestic markets.

As of 2022, Xiaomi is the top-selling smartphone in India, which has allowed Xiaomi to strengthen its online and internet services presence in the country.

A huge part of Xiaomi’s revenue comes from India. Interestingly, Xiaomi’s core interest in India wasn’t just to sell phones and multiply profits; instead, it was to gain as much audience as possible.

The reason for this was to show ads in videos and online games, and other e-commerce ventures. This strategy did play out well in the company’s favor.

An ex-senior official said that after capturing the Indian market, Xiaomi Inc. was confident and positive that it could copy the same strategy in other markets (countries).

However, Xiaomi faced a lot of criticism that the company’s OS (Operating System) was under state influence, and the user data could be misused.

Inside China, the Xiaomi phones work on their own operating system, but in the international markets, the same Xiaomi phones have to rely on Google’s OS and Terms and Services.

A company worker said it did everything it could to stop its user traffic from going to Google and directing it to its system. But, installing Google apps on Xiaomi phones automatically hits Xiaomi’s built-in apps and, of course, the company’s revenue.

The US sanctions on the Chinese tech giant, Huawei, are a golden opportunity for Xiaomi, as Huawei, alongside Apple, Vivo, and HONOR, is also its rival.

Wong Kok Hou, a chief investment expert, says that because of intense competition, Xiaomi is having a really tough time capturing the Chinese market and having a monopoly.

An Important Point

An ex-senior official said that making a brand power for Chinese companies is something very few have done so far because it’s extremely difficult. But, according to him, Lei Jun is or would be the exception. Lei Jun is a charismatic and ambitious individual, he said.

If Lei Jun manages to pull off this job, it wouldn’t be a surprise for him, he further added, as he already has a firm belief in Lei Jun. And lastly, what do the customers want in Xiaomi’s new electric vehicle? Well, it is obviously affordability.

Bottom Line

Lei Jun is an ambitious and innovative person; while the war that he has declared seems challenging to be won, experts believe Lei Jun will eventually triumph. Do you think Lei Jun will win this monopoly war? Let us know in the comments. PEACE!

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