The speed at which Xiaomi rises is amazing, and its decay may be equally unpredictable.
The rise of Xiaomi relies on the two major killers of “price/performance ratio†and Internet e-commerce channels. However, the smart phone market is changing and the pattern is fluctuating, and it is difficult to rely on these to support it.
The counterattack of OPPO and vivo reflects the pressure on Xiaomi. Data show that OPPO mobile phone shipments reached 18 million units in the second quarter, with a market share of 16.2%, which was growing rapidly; followed by vivo, with shipments of 14.7 million units and a market share of 13.2%.
OPPO and vivo can achieve rapid growth, and many reasons are that offline channels are reviving new machines. Moreover, the influence of offline channels is growing, and Huawei is also turning the battlefield to offline channels.
According to a report from IDC, Xiaomi's smartphone shipments in the second quarter totaled 10.5 million units, a 38% drop from 17.1 million units in the same period last year. Xiaomi, who once sat in the first position of the Chinese smartphone market, is now behind Huawei, OPPO and vivo.
Xiaomi, who once sat in the first position of the Chinese smartphone market, is now behind Huawei, OPPO and vivo. This triggered Xiaomi's response - based only on the data released by the IDC family, it does not reflect the true shipments of Xiaomi Q2. However, Xiaomi official did not announce its shipments in the second quarter.
Behind the controversy of shipments, the ever-changing competitive environment in China's mobile phone market has already pushed Xiaomi to a rather subtle position. In five years, Xiaomi has become a challenged target from the challenger of the mobile phone industry.
The speed at which Xiaomi rises is amazing, and its decay may be equally unpredictable. Since its inception, Xiaomi has built a myth of the times in five years, but since the high point, all the way down, and now the second quarter shipments plummeted, and many people interpret it as the end of an era.
At one time, Lei Jun’s “Focus, Extreme, Reputation, Fast†seven-character and Xiaomi model became the industry benchmark, but after the rapid expansion period, the marathon run between capital valuation, market share and core competence. Fighting is not just a sprint, but also endurance.
The millet era ended?
The overcapacity of smartphones and the saturation of the market have increased the difficulty of Xiaomi’s breakthrough. In 2015, global smartphone shipments were 1.44 billion units, up 10.4% year-on-year; in the same year, China's smartphone sales were 434 million units, down year-on-year to only 2.5%.
Compared with the first quarter, IDC data shows that the top five mobile phone manufacturers are still Huawei, OPPO, vivo, Xiaomi and Apple. The difference is that Xiaomi surpassed Apple, from the fifth row to the fourth in the first quarter, and both experienced a sharp decline in sales in the second quarter.
Among them, the number of Huawei mobile phones ranked first reached 19.1 million, with a market share of 17.2%, an increase of 15.2% year-on-year; the OPPO ranked the fastest, with 18 million mobile phone shipments and a market share of 16.2. %, an increase of 124.1% year-on-year; vivo shipments were 14.7 million units, with a market share of 13.2%.
In comparison, millet shipments were 10.5 million units, down 38.4% year-on-year, with a market share of 9.5%; Apple's shipments were only 8.6 million units, down 31.7% year-on-year.
According to IDC statistics, the marketing information conveyed by Huawei and OPPO ranked in the top two is focused on one or two key performances and helped them successfully capture the market. The former is a Leica lens for mobile phones and the latter is a fast charging technology. In addition, OPPO and vivo's offline channels continue to exert strength, and the marketing method of inviting celebrity endorsements is being followed by other manufacturers.
Behind the volatility of the smartphone market, Xiaomi’s Internet mobile phone and e-commerce channel sales model, which is known as “cost-effectiveâ€, is under increasing market pressure.
Since 2016, domestic mobile phone manufacturers have undergone some significant changes in their marketing channel strategies. After a period of Internet e-commerce, an online channel storm, the influence of offline channels began to slowly emerge.
At present, the highly competitive mobile phone market is not only a product technology patent, but also a channel resource competition. What can be seen is that, for example, Huawei's e-commerce brand “Gloryâ€, which once marked “Xiaomiâ€, has turned the battlefield to the offline channels where OPPO and Jinli are located. The fast-rising brands such as vivo and OPPO have already passed. The agent system covers the four- and five-tier cities nationwide.
The reshuffling of domestic smartphone brands has begun. The end of Xiaomi era is an important signal. Those who lack brand influence, lack of innovative R&D capabilities, insufficient core patent reserves, and low bargaining power in the industry chain are inevitably in the “eliminationâ€. Out.
In the future, before the birth of innovative products with insufficient influence, the growth of domestic smart demand will continue to show a slow trend, and the situation of overcapacity will further intensify. Industry concentration has increased again and small brands have been phased out.
Xiaomi supply chain is now worried
Xiaomi’s frustration is also closely related to his concerns about supply chain management and control. Due to excessive reliance on low-price competition, it has not been able to timely lay out the industrial chain and improve the influence of the industrial chain. To this end, Lei Jun even personally went out to solve the supply chain problem.
"This time period is one of our bottoms. This year we have a three-month supply chain that is extremely out of stock, and there are many negative reports." In June this year, Xiaomi’s experts closed the meeting, Lei Jun revealed, and this also revealed Xiaomi’s The worry about the control of mobile phone supply chain.
An obvious example is that Lei Jun recently broadcasted the "Black Rice Experiment" protagonist "Xia Mi 5" on the five platforms of Xiaomi Live, Xiaomi Mall, QQ Space, Live Broadcast and Billbill. It was originally expected to be released in 2015, but ultimately from research and development. Released in February 2016, lasted 19 months.
However, an internal adjustment of Xiaomi in May this year has released a signal: Lei Jun personally coached the R&D and supply chain team to solve the supply problem.
In Yin Yuan’s view of the value line, in addition to “not being able to make a difference in the industrial chain layout and improving the influence of the industrial chain in timeâ€, Xiaomi’s problem lies in relying too much on price and a competitive dimension, ignoring quality and personalization. "Dimensions", and "not enough paranoia, failed to make the 'hardware free + application service charges' model to the extreme." However, this is not to say that those companies that grab the share from Xiaomi, is the final winner.
"The Internet is a tool, not a panacea." As a competitor of Xiaomi, Zhao Ming, president of Huawei Glory, said earlier. In order to regain market share, Xiaomi must come up with innovative features, such as Huawei's Leica lens and OPPO's fast charging technology. In addition, the offline channel is still the Achilles heel of Xiaomi. If you don't want to be coerced by other competitors, Xiaomi should probably do something.
In fact, from the perspective of business models, the advantages of Internet mobile phones have not changed since their inception. But when hundreds of brands are joining the Internet mobile marketing force, and even Internet mobile phone companies have turned the marketing model into a form of publishing BOM prices, listing mobile phone configurations, and simply comparing running points, it actually caused confusion among users. As a result, Internet mobile phones today have encountered bottlenecks to further expand market share, and users have returned to offline choices.
In Lei Jun's view, although Xiaomi has done a lot of innovation in the past, it has been concealed under Xiaomi's subversive business model, or Xiaomi's innovation is not enough to impress everyone. "Either product sales, business scale, or business model improvement, including the various technologies that Xiaomi has accumulated over the past two years, will show a brand new millet in the next six months to a year." Lei Jun said.
Recommended reading: Huawei's power behind the smart phone top spot
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