Xiaomi, the Chinese manufacturing giant whose focus has been mainly on the foreign market rather than the congested China smartphone market, is scheduled to open its first Nairobi office this year.
The company aims to penetrate Africa and has even established the Africa Regional Department where Wang Lingming (Xiaomi’s VP) will be the manager.
Xiaomi is set to counter the dominance of its Chinese rivals such as Transsion Holdings, the manufacturer of popular brands such as Infinix, Tecno and Itel brands.
Xiaomi’s chief executive Jun Lei revealed that they are putting up a new strategy as seen in a staff memo seen by the Business Daily.
The firm seeks to use the low-price strategy and offline marketing system to penetrate the African market.
Some of the things that could determine the company’s success is its camera optimization to better suit African users. Some additional stuff would be longer battery life, multi-standby, multi-card, and multi-language display.
The move by the Chinese manufacturing giant, as seen by analysts indicates that the company is keen to come up with a low-cost strategy in a bid to eliminating brokers to increase its earnings.
In an earlier announcement, the firm had said it would be opening its first Kenya office by March.
During the 2nd quarter of last year, according to the American research firm Canalys, the firm surpassed US phone giant, Apple as the leading smartphone maker in China.
The company entered the African market space through South Africa, Nigeria, and Kenya.
So far, in 2019, Xiaomi has made two significant announcements. Apart from entering the African market, it also announced the independence of the Redmi brand.
Xiaomi’s first attempt at penetrating the African market was in November 2015 where they announced the sale of Redmi 2 and Xiaomi Mi 4 in South Africa, Nigeria, and Kenya. At the time, they had cooperated with a dealer in Africa which had online stores in multiple African countries. In Kenya, Xiaomi currently sells through Jumia and Avechi.com.
At the time in 2015, the move to Africa did not have much success which made them concentrate more on their rise in India and Southeast Asia in 2016. The reentry to Africa shows a shift after achieving success in India and Southeast Asian markets.
It is still not yet clear on any additional details on its physical store.
In recent years, China’s largest smartphone makers have recently intensified their scramble to occupy the Kenyan market. Here, feature phones are still widely used, and this has attracted significant players from the Asian country.
There has been a demand in Kenya for entry-level and mid-range smartphones which are pocket-friendly in the market as feature phones are still widely used. Last year, the Chinese electronics company Oppo made an entry into the Kenyan market. It became the latest to up the marketing efforts of its products in the country where it unveiled its latest device in the country.
Oppo then officially set up a shop in an aim o target the local and African market at large.
Xiaomi will have to battle for dominance in the African market. According to Canalys, Transsion is the King or Africa with Itel, Tecno and Infinix being the top market shipments. Xiaomi will have to compete against Transsion to get a share in the African market.
Even as this happens, there are companies in the Kenyan market that give people a chance to buy their phones on credit, and they pay in installments. However, failure to pay could lead to being listed as a defaulter and could destroy your credit score. It could progress to charge-offs at some point if you are unable to pay the debt. You can give this post a read to find out more.
Xiaomi intends to use the low-priced strategy. They are set to release high-spec phones that are low priced. This is what will capture the mind of Africans.
At the moment, e-marketing has still not gained enough trust in the continent which is why they intend to work with offline marketing to push their sales.
If they heavily consider price and marketing, they may do well in the region.
Some of the phones Xiaomi should consider bringing are Redmi and Pocophone.
Xiaomi has its headquarters in Beijing. Not only do they invest in smartphones but also laptops, mobile apps, and other consumer electronics.
It released its first smartphone in August 2011, and it later became one of the largest smartphone company in China in 2014.
The company’s founder and CEO, Lei Jun has an estimated net worth of $12.5 billion, and he is China’s 11th richest person and 118th in the world, according to Forbes.
Xiaomi’s valuation is more than $46 billion. Xiaomi keeps its prices low by keeping its products longer in the market, normally eighteen months as opposed to other companies who keep theirs for six months.