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Xiaomi SWOT & PESTLE Analysis

ID : 52512253| Feb 2019| 15 pages

COMPANY PROFILE -Xiaomi

Business Sector :Consumer Electronics

Operating Geography :China, Global

About Xiaomi :

Xiaomi was founded in 2010 by Chinese entrepreneur Lei Jun. It started off primarily as a mobile phone manufacturer but has now ventured into other consumer durables like smart TVs, fitness bands etc. The company aims to make quality technology accessible to everyone. Xiaomi is the 5th largest smartphone manufacturer in the world with a market share of 7.3%. In India, it is the largest manufacturer, with 27.3% market share. The company is also making big strides in AI technology, with its AI assistant being shortlisted for the SAIL award. The company went public in 2018 with a value of $2.16 a share and a market capitalisation of $53.9 billion.

Xiaomi Revenue :


RMB 50.8 billion – Q3 2018 (YoY growth 49.1%)
RMB 34.1 billion – Q3 2017

Competitive Analysis of Xiaomi

SWOT
PESTLE
The SWOT analysis of Xiaomi is presented below:
Strengths
Weaknesses
1. Variety of smartphones and other devices available
2. Strong brand awareness and value
3. Focus on hardware and software
4. Strong performance in multiple markets
1. Low global market share
2. Lack of proprietary technologies
3. Dependence on sales of sub-INR 10000 phones in Indian market
Opportunities
Threats
1. Increasing smartphone penetration
2. Internet of Things (IoT) and Artificial intelligence
3. Advent of 5G technology
4. Strong growth potential in African market
1. High competition in the medium priced phone segment
2. Data privacy issues
3. Anti-China sentiments
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Detailed SWOT Analysis of Xiaomi

 

Strength

1. Variety of smartphones and other devices available: Xiaomi has a variety of smartphones at different prices in its portfolio, catering to different types of customers. Also, the company is not entirely dependent on the smartphone business and it is diversifying into various consumer electronics products like smart TV, fitness bands, notebooks, air purifier, water purifier etc. This related diversification can ensure the survival of the company if the smartphone business is severely dented by the high competition from Samsung and Xiaomi’s fellow Chinese brands like Oppo, Vivo and Huawei. It would also help in having a future ecosystem of interconnected Xiaomi product in consumers’ homes where one Xiaomi smart device interacts with another smart device to fulfil consumer needs. For example, the smartphone might be used as a remote for the smart TV. This kind of interconnection would create a lock in for the customer to Xiaomi products.

2. Strong brand awareness and value: Xiaomi has shipped an estimated 90 million smartphones in 2017, a significant portion of shipments being in emerging markets such as India. New launches and premium products like Note Pro and Mi Mix 2 are expected to result in the 2018 sales figure being even higher. The company has a variety of products like smartphones, air purifiers, smart TVs, etc. Not only products but revenues from services like app store and browser are also expected to rise. The high growth prospects due to rising market share in emerging markets and plans to expand into developed markets are good reasons to give Xiaomi a valuation of 20x, higher than its major competitor Apple (16x). The major reason for Xiaomi’s growth despite few marketing campaigns and thin channel partner margins is the value for money that its products give to the consumers due to competitive price to specifications ratios.

3. Focus on hardware and software: Xiaomi not only sells smartphones having high end features but also sells low to mid-range models. The company is able to sell low to mid-range models with good features due to its competitiveness in software. The company’s core competence is not in hardware but in software. Xiaomi phones run on MIUI, an Android-based OS that provides its own app market despite not having Google Play pre-installed. Even if users want to download apps only from Google Play, the OS allows them to download Google Play separately. Having its own operating system enables the company to roll out quick OS updates to increase customer satisfaction. The OS is also modified for different models of phones. The Poco models have a different MIUI than Redmi 6A.

4. Strong performance in multiple markets: Xiaomi first entered the Indian market in 2014. Despite initial hiccups, the company crossed $1 billion mark in Indian market revenues in just 2 years. The company’s India MD Manu Kumar Jain was instrumental in steering the company’s India business by removing roadblocks in the company’s growth. The growth was largely due to the establishment of a strong offline sales network of Mi Homestores and Mi Preferred Partner stores to complement the online sales network. As of Q3 2018, Xiaomi has the largest market share in India with 27.3%. The company has always seen the Indian market as crucial to its globalisation strategy, so the runaway success in the Indian market ahead of a powerful competitor like Samsung is a major step towards becoming a global leader. Xiaomi is also making waves in Western Europe with an increase in market share from 1% in Q3 17 to 4% in Q3 18 and a YoY growth of a whopping 386%, making it the number 4 brand in the region. In Indonesia too, the company surged from just 6% market share in Q3 17 to 23% in Q3 18 with YoY growth of 337% to become the number 2 brand behind Samsung, whose market share had actually declined from 28% to 24% during the same period.

Weakness

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Opportunity

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Threat

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Major Competitors :

Major Brands :

  • Redmi
  • Mi
  • Poco
  • Black Shark
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Check Out Analysis of Other Relevant Companies

TABLE OF CONTENTS
DELIVERY AND FORMAT
WHY CHOOSE US?
References used in Xiaomi Analysis Report

1. About Xiaomi https://www.mi.com/global/about/

2. Xiaomi Corporation Q3 2018 results https://i01.appmifile.com/webfile/globalweb/company/ir/financial_us/2018_Q3_Result_Presentation.pdf

3. Is Xiaomi ready for going global? https://technology.ihs.com/511391/xiaomi-is-strong-in-software-outstanding-in-marketing-focusing-on-mid-range-and-high-end-products-with-cheap-prices-and-using-on-line-sales-to-cut-out-distribution-cost-now-xiaomi-is-aiming-global-market

4. The Rise And Rise Of China's Xiaomi In India https://www.forbes.com/sites/baxiabhishek/2017/09/12/the-rise-and-rise-of-chinas-xiaomi-in-india/#628bf6af6789

5. Global mobile consumer trends: Second edition https://www2.deloitte.com/global/en/pages/technology-media-and-telecommunications/articles/gx-global-mobile-consumer-trends.html

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Xiaomi SWOT & PESTLE Analysis - SWOT & PESTLE.COM

SWOT & PESTLE.com (2019). Xiaomi SWOT & PESTLE Analysis - SWOT & PESTLE.com. [online] Available at: https://www.swotandpestle.com/xiaomi/ [Accessed 18 Nov, 2019].

In-text: (SWOT & PESTLE.com, 2019)

Copyrights and Disclaimer

Xiaomi SWOT and PESTLE analysis has been conducted by Nipunn V and reviewed by senior analysts from Barakaat Consulting.

Copyright of Xiaomi SWOT and PESTLE Analysis is the property of Barakaat Consulting. Please refer to the Terms and Conditions and Disclaimer for usage guidelines.

Xiaomi SWOT & PESTLE Analysis
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