Will China's Xiaomi make it in the West given its poor experience in India?

Will China's Xiaomi make it in the West given its poor experience in India?

19 May 2015, 10:13
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Chinese smartphone giant, Xiaomi, will soon start offering its goods in the U.S., U.K., France and Germany, seducing Western consumers with its low prices and putting Western manufacturers under pressure for the same reason.

Xiaomi will launch a trial of its online "Mi Store" to Westerners on Tuesday, offering a limited supply of accessories, including headphones and fitness trackers—in what could be argued as a prelude to selling phones. This move will be the five-year-old company’s first steps beyond China and selects developing markets after struggling with litigation over alleged patent infringement, the Guardian says.

The prices will start as low as $9.99 for a battery cell (5000mAh Mi Power Bank), while the Mi Band costs $14.99, a fraction of the price of rival fitness trackers found on U.S. sites.

The U.S. consumers can start ordering from Mi.com from 10 p.m. ET (7 p.m. Pacific time) on Monday. Those in the U.K., France and Germany will be able to do that on Tuesday from 7 a.m. ET (12 p.m. BST).

"They have a particular business model, which basically involves producing phones which look a lot like phones produced on the market, but cost less, creating demand by having online flash sales and not spending a lot of money on marketing or on retailing," Thal Larsen, Asia editor for Reuters Breakingviews, said, noting that entering Western markets may appear to be challenging.

"That might work somewhere else. I mean they're trying very hard at the moment to push it into India."

However, he said this model might gain less traction in the U.S. and Europe, as these markets were "more competitive" and people had "higher expectations."

Xiaomi’s CEO Lei Jun intends to take the $45bn startup from one of the world’s top five smartphone manufacturers, purely based on sales within China, to the world’s biggest supplanting Samsung and Apple in the process.

The firm, however, has experienced problems expanding beyond China. Its launch in India, one of the world’s largest emerging smartphone markets, was harassed with challenges around patent infringement that saw sales banned.

Despite Xiaomi being awarded various patents of its own across smartphone technology, a similar situation may occur in the company launched its series of smartphones in the U.S. and Europe.
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