UPDATED 00:20 EDT / AUGUST 18 2016

NEWS

Xiaomi sales plummet as Huawei takes the lead in China

Xiaomi, Inc., the Chinese phone manufacturer often called the Apple of China, has lost its gloss, with new figures showing that its sales have started to plummet.

According to a new report from International Data Corporation (IDC), Xiaomi sales slid in China by 38 percent in the second quarter to a 9.5 percent market share (down from 16.1 percent), resulting in it sliding from first position in the Chinese market to fourth position.

Leading the field was Huawei Technologies Co. Ltd. who increased their share of the Chinese market to 17.2 percent up from 15.6 percent in the same quarter of 2015, followed by Oppo Electronics who doubled their market share from 7.6 percent in Q2 2015 to 16.2 percent, and Vivo who also saw an increase from 7.9 percent to 13.2 percent.

Unsurprisingly, given the company had already reported the decline in its quarterly financial report, Apple, Inc. continued its slide in the Chinese market dropping from a share of 11.9 percent to 7.8 percent with 8.6 million units shipped in the quarter versus 12.6 million in the same quarter of 2015.

The rise of Oppo and Vivo in particular was credited to the strength of their offline channels in comparison to Xiaomi who primarily relies on online sales, with both companies offering shops in most Tier 3 to Tier 5 Chinese cities (smaller cities in Chinese terms) making them a convenient option for locals who are looking for a phone.

Technology and celebrity endorsements were also cited, with Oppo, in particular, marketing its phones on both their technology benefits and use by celebrities.

“The success of Huawei, Oppo, and Vivo in the market can be attributed to their concerted effort to build their brand and aggressive marketing to attract the consumers, along with the focus on product differentiation,” IDC Senior Market Analyst Xiaohan Tay said in a statement.

Old is new

Xiaomi is reported to dispute the IDC figures, pointing to data from IHS that showed shipments of 14.2 million units and Strategy Analytics reporting 12.8, but whatever the figure those numbers are still way down from the company’s peak.

The company only has itself to blame for its decline; while still offering a solid product, its boast that it didn’t need to advertise turned out to be completely untrue.

At the end of the day all that was old in terms of product marketing is new again, and while Xiaomi is now advertising their products they did so too late in the day to arrest a decline, as it was outplayed by the marketing spend of its three main rivals in its local market.

Image credit: WorldNewsTube/YouTube/CC by 2.0

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