Xiaomi looks to improve decision-making with new governance bodies in wake of management reshuffles, slumping sales
- Founder Lei Jun said the panel of executives from different corners of the company would ‘significantly improve the quality of … decision-making’
- The departure of Manu Kumar Jain from Xiaomi India comes after the Chinese brand was dethroned by Samsung in the world’s No 2 smartphone market
Chinese tech giant Xiaomi has established two corporate governance bodies in the wake of major management reshuffles at its China and India business operations, as the company battles slumping sales in both markets amid weakening global demand for smartphones.
Xiaomi has set up a Corporate Operations and Management Committee consisting of 12 executives plucked from the mobile products division, global business unit, internet and ecosystem business, and finance department, founder and CEO Lei Jun said in an internal email circulated to staff on Monday.
Such a panel of executives from different corners of the company would facilitate inter-unit collaboration and “significantly improve the quality of and efficiency in decision-making, while also being able to respond to business changes swiftly”, Lei said, adding that the committee will coordinate and oversee business strategy, planning and budgeting, among others functions.
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The Beijing-based company also set up a human resources committee to review and approve major corporate restructuring plans, as well as overseeing appointments and dismissals among the senior management.
Both governance bodies will be headed by Lei, the 53-year-old billionaire entrepreneur who co-founded the Chinese smartphone giant more than a decade ago and has helmed the company since.
The establishment of the new bodies aims to “promote the professionalisation of group governance and enhance efficiency in decision making”, a Xiaomi spokesman said in an emailed statement.
The move comes after a series of C-level personnel changes late last year.
In December, Xiaomi announced the departure of three senior executives, including company veteran and group president Wang Xiang, who had been responsible for global expansion and intellectual property strategy.
The company’s efforts to boost efficiency through cross-functional collaboration comes amid an increasingly challenging business environment in two of its largest markets – China and India.
China’s smartphone sales hit a decade-low in 2022, with shipments plunging 13 per cent year on year to 286 million units, according to tech consultancy IDC.
Xiaomi’s ranking in China’s smartphone market, the world’s biggest, slipped from third to fifth after its domestic shipments declined from 50.5 million in 2021 to 38.6 million last year.
Ashutosh Sharma, a New Delhi-based vice-president for research firm Forrester, said that Indian consumers with higher disposable incomes have changed their tastes when it comes to smartphones.
“Xiaomi and other Chinese brands seem to have gone through the same challenge that their low-cost Indian predecessors did a few years back,” Sharma said.
“With rising disposable incomes, the market is shifting away from low-cost and low mid-range to high mid-range and higher end phones.”
Slumping sales and intense competition are not the only challenges facing Xiaomi in the country that is expected to soon replace China as the world’s most populous nation.
Manu Kumar Jain, who spearheaded the launch of the Chinese brand in the South Asian nation in 2014, is leaving Xiaomi India to take time off before rejoining the country’s start-up ecosystem, he said in a tweet on Monday.
In a statement, Xiaomi thanked Jain for his “contributions to the business of Xiaomi India and the global expansion of the company in the past nine years”.
As Jain moved to Xiaomi’s Dubai office in 2021 to oversee other markets, his departure might not have a direct impact on Xiaomi’s India operations, according to Rajeev Nair, a senior analyst at market research firm Tech Insights.
But Nair added that the recent exodus of Indian executives at Xiaomi has adversely affected the company. “The impact of attrition and other factors has been visible in Xiaomi’s performance in the latest concluded quarter,” Nair said.
