Xiaomi targets return to No 1 spot in China’s smartphone market in 10 quarters
CEO Lei Jun tells staff in a speech that overseas expansion will also continue, but acknowledges a slowdown in the China market and stiff competition
Chinese smartphone maker Xiaomi has set itself an ambitious goal of retaking the top spot in the domestic market within 10 quarters – a crown it lost in 2016 – as it talked up its prospects ahead of an expected public share offering this year.
In a speech to employees, a transcript of which was released by Xiaomi on Wednesday, founder and CEO Lei Jun also noted how operating revenues had surpassed 100 billion yuan (US$15.9 billion) in October 2017, ahead of schedule, and pledged to continue the company’s push into overseas markets.
“In 2018, we will vigorously expand into overseas markets, while hitting back in the domestic market,” Lei said. “We want to climb back to the top spot in China in 10 quarters.”
Xiaomi is currently the country’s fourth-largest smartphone maker, with a 12.4 per cent market share, behind Huawei, Oppo, and Vivo, according to research firm IDC. But it faces a market that declined by 5 per cent in 2017, shrinking for the first time in nine years, with analysts pointing to a maturing market where many middle class people have already bought phones and were not in a rush to upgrade.
Lei noted the likely further shrinking of China’s smartphone market in 2018, as well as “even more intense competition”, but expressed a determination to push ahead.
“China is the foundation of Xiaomi, the world’s largest consumer electronics market, and the high ground that global smartphone makers are vying for,” Lei said. “Only if we win the local market can we continue to support steady expansion overseas. ”
He outlined a strategy for China of pushing smartphone sales at the grass-roots level, such as in towns and villages, and noted opportunities in India, Indonesia and Vietnam.
Lei said it took Xiaomi seven years to surpass 100 billion yuan in operating revenues, faster than tech giants Apple, Facebook, Google, Alibaba Group Holding, Tencent Holdings and Huawei.
Xiaomi is targeting an IPO in Hong Kong in September, which could be the world’s biggest technology listing this year, according to sources familiar with the matter. It has already appointed Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan and Morgan Stanley to work on the share sale, the sources said.
Winning Xiaomi would be a significant bonus for Hong Kong and may pave the way for more technology companies to follow, burnishing the city’s reputation not just as a financial centre but also as a technology hub.
Additional reporting by Peggy Sito