Healthy competition in the market has many benefits. Whether for competing rivals or for end customers as well. It pushes companies to innovate and keep developing — simply move forward. End customers also benefit from that, getting new products and lower prices.
The Chinese market is a big hub
The Chinese mobile phone market is a big hub, and Xiaomi has a strong and formidable opponent there: Huawei. While Xiaomi currently controls about 12% of the Chinese smartphone market share, Huawei has taken as much as 34% of that slice.
Naturally, this doesn’t sit well with Xiaomi’s management, so they approved a fairly large investment.
Xiaomi’s goal is to invest 5 billion yuan in brand expansion, which is roughly €643 million / 16.5 billion Czech koruna. This sizable investment should be used over the next three years to expand Xiaomi’s retail network in China.
In addition, the investment should also be used to develop distribution channels in the country and support rewarding Xiaomi’s business partners.
Will Xiaomi’s investment with nine zeros work?
This should lead to a change in the percentage share of the mobile phone market in Xiaomi’s favor. However, it won’t be easy. As we all know, Huawei is facing major problems in international markets, and it seems that in the near future it may lose support from Google.
Its phones will no longer be updated, and they’ll lose popular apps such as the Play Store, YouTube, and the like.
That’s why it’s understandable that Huawei will lose considerable profits from turnover, especially in global markets. A rational step for the company would be to focus on customers in China, where Google services don’t have much backing.
From these facts, it’s more than clear that a serious competitive battle is brewing in China’s mobile market. We just hope it won’t have a negative impact on Xiaomi sales here and with the popular online retailers.
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