After being touted as “China’s Apple Inc.”, Chinese smartphone startup Xiaomi went through a rough patch that saw its Number 2 position nearly wiped out by players like Huawei, Oppo and Vivo. This year, the company is targeting $14.5 billion in global sales, with major expansion plans for its physical presence over the next three years.
Chief Executive Lei Jun said that the company was already ranked number three in India with sales of over $1 billion. He also stated that sales from the company’s “smart hardware ecosystem exceeded 15 billion yuan” and that it had doubled over the previous year. He did not say what the figure was.
Xiaomi’s physical presence currently numbers 54 stores, but in 2017 it plans to open 200 more locations – or Mi Home stores – and expand that to 1,000 new stores in the next three years. The aggressive expansion strategy underlines the fact that the online sales of smartphones only accounts for 20% of total sales across China.
At one point, in 2014, Xiaomi was the best selling smartphone brand in China, as the graph below shows.
At the end of 2014, Xiami held a market share greater than that of any other player, including Apple Inc. and Samsung Electronics. However, by the middle of 2016, Xiaomi had significantly lost its ranking as well as market share in the Chinese market.
The company’s turnaround now is highly dependent on how aggressively it can execute its expansion goals over the next three-year period.
Meanwhile, Huawei is now emerging as the top smartphone brand coming out of the People’s Republic. It is currently ranked the third largest smartphone maker in the world, after Number 1 Samsung and Number 2 Apple.
Xiaomi is also going to be focusing on developing artificial intelligence applications in 2017, according to Lei. In addition, Xiaomi is the second largest shareholder in the newly opened Sichuan XW Bank.
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