When Xiaomi decided to keep the closure of the Mobile World Congress 2016, for a moment It passed by the head which would have hidden surprises. One of those that heat networks from zero to sixty and that Cup the covers of the specialized media with articles and analysis with exclamations in the headlines, capable even of open gap in the General media serving only brands consolidated in the West.
Is not that you bet for the bombing, but yes because there was at least a small bulb that we were not able to forecast. Because for very good, nice and cheap is the new my 5, your ad, or its components, and their functions can be classified as minimally surprising. It has been most unexpected nice redesign my 4S.
What Xiaomi presented today is just what went into the expectations on this brand. Although I, naive, He hoped that the brand-new Vice President Hugo Barra climbed onto the stage and told: “we are here to stay”. What could have happened have done? How would it affect your arrival to the local market?
No news of its expansion
No, not those words or any similar. After a long, heavy, redundant Conference we have not heard anything about localization strategies to America or Europe. NI directly or through business partners that could take part of the costs of.
At the beginning of 2015, the Brazilian Director of the Chinese company said that even missing a few years so that movement of expansion towards the developed countries would take place. His words were clear and few encouraging:
“We believe that our valuable position of manufacturing products with very high specifications and sell them nearly at cost has far more social and economic impact in developing countries”.
It is true that for the moment they are enough with those who have, Asia Pacific, India and Brazil, to be the Fifth dealer worldwide. But they are also aware that there are a multitude of requests coming from a Western public that checks that the relationship quality price offered is not in your territory.
I am aware of entering a new market is much more than having a good name among a group of very knowledgeable users. To make money with little profit margin there to sell much. So get to the expensive, complex and diversified Europe to have, say, 5% of market share is wasting time.
Because it could become officially my 5 Spain
We are going to do a simulation, an exercise in fiction that may help us to draw any conclusion about What impact could have Xiaomi landing in a country like Spain.
In this experiment we will put aside the idea that any phone can be imported, especially these that come with Castilian among your choice of language. We also ignore the band problems, loss of packages and customs or difficulties in the implementation of guarantees that are generated both by purchase directly from China as doing so through enterprises of import and resale as the oficialisima RCKCOM which dominates Amazon.
My 5 comes in three versions according to capacity by 1999, 2,299 and 2,699 renminbi, which are about 280, 320 to 375 euros respectively change of factory. There are several online stores that perform reserve and without expenses of shipment or possible shock to the Customs Office. In some cheap how Geekbuying will the 354, 423-463 euros respectively. While local distributors such as shop offer, already with VAT, Spanish warranty and all costs left it in 399, 435 and 499 euros respectively.
If you decide to reach Spain Xiaomi following their strategy no doubt that could move in the strip of 300 to 450 euros. In this case would be talking about a figure much lower than that of its rivals as the 700/800 euros from the Galaxy S7/Edge, the Xperia Z5 Premium 800 or the 750/850 euros of 6S/Plus iphone. And there will be the G5 LG if you want to get any of its plug-ins.
Effectively, created with Chinese prices. Like the Huawei, it could go to the surroundings of 500 euros which moved the P8’s release without giving up a good profit margin by the costs of certification and adaptation of the software. O It could get that price and benefit from a powerful free advertising campaign, both by word of mouth and by the impact that would have an entry so aggressively in specialized media, blogs and podcasts.
What could happen if Xioami threw their mobile in Spain
If this Xiaomi decided to enter Spain would in your hand break the market. You would have to do it with a warm strategy, of mainly online distribution to avoid the toll on markup that stores or commercial requirements that there are always behind when manufacturers negotiate with distributors.
But not short brides because the stores know that it is a product that comes with fame, and that is the power of negotiation to achieve better deals if you want to follow traditional channels. Office, payroll, taxes, expenses for event and marketing, all that is already likening it in other markets in which is present proportionally, so that the price increase is granted not do direct conversion. As transport and packaging, which today is a fraction of the cost of product.
And what would happen with that second line of Samsung, LG and Huawei moving in those with lower hardware prices? In what position would leave the super middle range of Western manufacturers that compete in the strip of 300-400 euros? Would no doubt those who would suffer the most.
Always talking about my 5, because this Xiaomi can continue lowering towards the Mi 4S, Redmi Note 3 or whatever you do is missing and would continue to Excel in each of the segments. Again, this Xiaomi, competing in quality price.
Until the coming year
At the end has not happened. I think that it is not good strategy to arrive at the end of a show, when the peak of information has passed and the user has begun to fill with both binge of novelties, to say what everyone expects. Up to Ada Colau will have more impact than Xiaomi in absolute terms by tube strike.
They know that they can and many people expect it. How would have changed the only film with Mr bar had said those magic words: “we are here to stay”.