7 years of overseas road, Xiaomi can “take” the Latin American market?

The “wise” see the “wisdom”: cell phone shipments increased by 1025% year-on-year, Xiaomi delivered good results in Chile, which is far away from the ocean.


From 0 to 500,000 units, in Q1 2021, Xiaomi became the fastest growing smartphone brand in Chile.

According to market research firm Strategy Analytics, Chilean smartphone shipments grew 71 percent year-over-year to a record 2.9 million units in Q1 2021. Among them, Xiaomi was the most eye-catching, taking third place in the market with 500,000 units shipped and growing by up to 1025% year-on-year, making it the fastest growing smartphone brand in the region. At the same time, Xiaomi’s market share in Chile also rose to 15.5% from 2.4% in the same period last year.

In 2014, 4-year-old Xiaomi extended its tentacles overseas. For Xiaomi, Latin America is a fertile ground to be developed. Chile is the third largest smartphone market in Latin America after Brazil and Mexico, which Xiaomi naturally cannot miss.

Chile: a mature market that needs to be developed
Chile is a country with high income, high Internet penetration and high smartphone penetration rate. According to Worldmeter and Trading Economics 2020, a global economic index platform, Chile is a high-income country with a population of about 19 million and a per capita GDP of over US$15,000.

In terms of Internet penetration, according to Digital Portal data from January 2021, Chile has an Internet penetration rate of 82.3% and more than 15 million Internet users. And speaking of Chile’s smartphone market, Tina Lu, an analyst at Counterpoint Research, said, “Chile is the most mature market in Latin America, with the highest smartphone penetration and replacement rates in the region.” Neil Mawston, executive director at Strategy Analytics, also said, “Chile is the third largest smartphone market in Latin America, behind Brazil and Mexico. This is evidenced by the 71% year-over-year growth in Q1 2021 shipments.”

Chile, which has a “good” smartphone development environment, is also a crucial step for Xiaomi’s layout in the Latin American market. It is reported that as early as December 2018, Xiaomi has already started to layout the Chilean market. However, when it first entered Chile, Xiaomi did not immediately deploy “Xiaomi authorized stores” (Mi stores), but sold its products through some large shopping malls and cell phone stores, but the sales did not seem to be very satisfactory. In order to further open the Chilean market, Xiaomi’s first Chilean “Mi Store” was opened on April 27, 2019 in a busy shopping district in the eastern part of Santiago, Chile.

The reason for Xiaomi’s success in Chile is that Rajeev Nair, a senior analyst at Strategy Analytics, said, “Xiaomi’s Redmi phone has a high price/performance ratio, which has made it a “consumer downgrade” among Chilean consumers due to the epidemic. “This has helped Xiaomi to gain the third position in the region in terms of shipments and further increase its market share. In addition, the ‘loss’ of Huawei phones during this period has given Xiaomi a lot of room for growth.”

However, in Chile, Xiaomi has to face other competitors such as Samsung, Lenovo-Motorola and Apple, especially the giant Samsung, which still “dominates the market. Samsung’s smartphone market share in Chile is currently relatively stable at around 42%, and in 2021, Samsung’s smartphone shipments in Chile grew 63% year-over-year.” However, regarding Xiaomi’s room for growth in Chile, Strategy Analytics analyst Rajeev Nair added, “If current growth trends continue, Xiaomi will overtake Lenovo-Motorola to become the second largest smartphone brand in Chile by the end of 2021. “

Latin America: a fertile ground for “buying”
Latin America, usually refers to the Americas south of the United States, including Mexico, Central America, the West Indies and South America. According to the United Nations, there are 33 countries in Latin America and the Caribbean. 2021, the population of the region has exceeded 650 million. Although the GDP per capita is not low (around $9,000 on average), the Latin American region is unevenly developed. Among them, six countries – Brazil, Mexico, Colombia, Argentina, Chile and Peru – are the countries with a high level of development in this region, and have become the markets where players of each track focus on layout.

In terms of cell phone penetration, according to the Global System for Mobile Communication Association (GSMA) data, nearly 70% of Latin American residents have personal cell phones by the end of 2020. And for Latin American consumers, Samsung remains the most popular product in the region, in addition to other brands such as Motorola, Apple, Huawei and LG.

In terms of market share, according to StateCounter 2021, Samsung leads the way with a 45% market share in the Latin American market. In addition, Motorola and Apple ranked second and third with 16% and 10% of the market share, respectively. And Xiaomi and Huawei are among the top 5 with similar market shares. However, for Xiaomi, which began to lay out the Latin American market in 2015, such an achievement is not bright.

It is reported that as early as 2015, Xiaomi has tested the Latin American market. Brazil, the largest economy in Latin America, became Xiaomi’s first choice. However, at that time, the overall economic situation in Brazil is poor, consumers have to “tighten their pockets” to live, coupled with Brazil’s high taxes, as well as the government due to local protectionism and a series of “unfriendly” policies, Xiaomi in the frequent setbacks, and finally in In 2016, Xiaomi regrettably left the market. In June 2019, Xiaomi opened its first brick-and-mortar store in São Paulo, Brazil. Subsequently, Xiaomi accelerated its presence in Latin America, selling its products to Brazil, Mexico, Colombia, Chile and Uruguay through its online store and offline “Mi Store”.

Today, Xiaomi’s market share ranking in Brazil, Colombia and other major markets is basically in the top five, and in 2021 Q1 to enter the top three markets in Chile. However, today’s Latin American market is still “ruled” by Samsung, in addition to Motorola, which has a strong “mass base”, Apple, which is both well-known and powerful, and Chinese brands such as Huawei, Vivo, OPPO and realme are also nibbling at this fertile ground.

To really “take” Latin America, Xiaomi still has a long way to go.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/7-years-of-overseas-road-xiaomi-can-take-the-latin-american-market/
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