Business

Xiaomi’s African Safari

Xiaomi has proved its mettle in most of the markets. It is known for its superb builds quality and overwhelming features that it offers at just 5% profit margins. This makes the brand affordable to most consumers and is the leader of the entry-level and mid-range smartphones.

They only lack in the flagship model, as it does not compete with the premium brands such as Samsung and Appl. However, it should be noted that Xiaomi launched its own version of flagship devices called POCO F1 especially for the Indian market. OnePlus placed it as the flagship killer (sub 40,000 rupees) but Xiaomi’s POCO grabbed much of the sub 30,000 rupees market in the first 3 months of its existence.

The developed markets such as North America, Europe and East Asia have reached saturation levels. There is less or no growth at all in these regions. This is the reason, global companies are eyeing for new avenues of growth. The Middle East is economically a well-off region but still, the smartphone penetration is relatively less. Whereas, the African continent as a whole is one of the least developed regions of the world and hence provides immense growth opportunities.

Samsung is the largest smartphone manufacturer in the world and it is the largest player in Africa too. Huawei is the second largest smartphone maker of the world, surprisingly, takes the However, there are other players such as Tecno, itel and Infinix make up the top 5 brands in the continent.

Xiaomi, with their proven expertise in the low priced smartphones segment, aims to capture the African market. They will be facing the existing leaders, which will be a tough fight for the Chinese major. The African continent is vastly underdeveloped and the lack of telecom infrastructure is the first hurdle that the smartphone makers need to overcome. Telecom service providers such as Huawei are a major player in the market as far as mobile towers, internet spectrums are considered and thus their products have an advantage over the others.

The sales channel is a challenge for the players in the African continent. Since the infrastructure is not well developed in most parts of the continent, a smooth movement of the goods will most likely not be possible. The companies need to work closely with the government and local authorities for getting whatever help possible from them.

According to a BGR report, the African division of Xiaomi has already been set up and is headed by Wang Lingming, VP of Xiaomi. Efforts are being made by the company to rival its counterparts in the new markets. The brand has been working on redefining its image across the globe. Recently, it separated itself from its sub-brand Redmi and allowed it to function independently. It also launched POCO as a different sub-brand to compete with the likes of OnePlus and other flagship killers. The good performance of the brand in the European markets has boosted the confidence of the brand that it can perform well in the African continent as well.

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