In the context of the US-China trade war is still in a stressful period and has not found a common voice between the two sides, many Chinese smartphone firms are shifting their focus back to the domestic market.
After rapidly expanding into foreign markets, Chinese firms like Xiaomi and Huawei are shifting their focus back to the domestic market. But the process of returning this time is not easy because the Chinese domestic market is gradually saturated because there are too many smartphone companies.
According to the Bloomberg, Xiaomi recently planned to spend 725 million USD to open more smartphone retail stores across China.
In a recent internal meeting, CEO Lei Jun said Xiaomi is aiming to build a new retail store system to dominate the Chinese market within the next 3 years and surpass the stunned rivals like Huawei.
Although the road to reach the goal of Xiaomi is increasingly narrow. In Q1 / 2019, a total of 5 leading smartphone companies in the country controlled 89% of the market, up from 83% last year.
Mo Jia, an analyst with research firm Canalys said, Xiaomi's market share has not only increased but also decreased slightly from 13% to 12%. Meanwhile competitors Oppo and Vivo still maintain market share of 19% and 17% respectively.
Xiaomi's biggest competitor is also focusing back on the Chinese market
That is none other than Huawei. The world's second-largest smartphone company is experiencing "bad luck" due to a ban in the international market, so it will decide to devote resources to the Chinese market to make up for the expected revenue of $ 30 billion. in this year.
The US government's ban also made the ambition to become the world's No. 1 smartphone company by 2020.
Bryan Ma, vice president at IDC's technology research division, said: "Huawei is strengthening its stronghold in the home market. But this move will also significantly increase the pressure on other manufacturers this year."
Reaching rural markets or remote cities will be the best solution for Xiaomi
Despite being under pressure, Xiaomi has made new strategies to cope with Huawei's fierce competition, which is niche market access in cities and rural areas.
Here Xiaomi is having fewer stores than brands like Oppo or Vivo. These are the two companies that have achieved great success in the domestic market thanks to the investment in expanding retail chains instead of e-commerce.
Like other companies, Xiaomi is seeing completely new opportunities and approaches through a combination of online business models and real stores.
Lu Weibing, Xiaomi's vice president and Redmi brand manager, said: "The Internet has removed the information gap and allowed people in remote areas to access product information.". Lu proudly boasts that the Redmi K20 Pro model is currently selling very well in some of Xiaomi's stores in small towns in China.
A stronger investment in stores will help increase coverage not only in big cities but also extend Xiaomi's influence to the rural area. Lei Jun affirmed that the investment of 725 million USD will be an important key for Xiaomi to continue maintaining the current strategy of developing and trading IoT products.
Of course to win against other competitors is not simply the opening of new stores. Xiaomi will have to have a competitive competitive strategy through promotional activities or media to influence on the domestic market.
An example shows Xiaomi's open store strategy will still face many difficulties. According to a Weibo user on Lu's post. He said he earned more money from selling Huawei phones in his store than Xiaomi phones.
Obviously to reverse this, Xiaomi needs to make more efforts than its predecessors.
Refer to Abacusnews