Citing health reasons, Hugo Barra leaves Xiaomi

• Was instrumental in Xiaomi’s expansion plans during its early days
• Leaves due to health reasons and desire to be closer to family

[Article updated at 6.20pm with additional information.]

AFTER three and half years Chinese electronics company Xiaomi’s vice president of international business, Hugo Barra (pic) has announced his departure from the once shining star in the smartphone world.

The Brazil-born Barra said in a Facebook post that his decision to return to California is largely motivated by health reasons and desire to be closer to his family.

Barra said in his post that he will be taking some well-deserved time off before embarking on a new adventure in Silicon Valley.

His transition out of his role at Xiaomi will occur in February after Chinese New Year.

Back in August 2013, the former vice president of Android product management at Google made a major shift to Beijing to help raise the awareness of the little-known Chinese startup, Xiaomi.

It was a surprising move at the time for a Silicon Valley veteran from a major company, no less, to move to an untested company on the other side of the world.

Over the years, Barra has contributed significantly to the raising of Xiaomi’s profile and has been instrumental in many of its product launches including the futuristic Mi Mix smartphone last year.

Barra will be succeeded by Xiaomi’s senior vice president of strategic cooperation Xiang Wang, who was formerly president of Qualcomm China.

Xiaomi had been, at one point of time, the top Chinese smartphone company. It launched its popular Mi series and other products that were well known for their quality and affordability.

The company has since expanded beyond smartphones to other product areas like action cameras and smart devices to build its own “ecosystem”.

As desirable as their products are Xiaomi has largely kept its focus in Asia, snubbing Western markets like the United States.

Hit by Chinese rivals and lack of Brick & Mortar presence

Whether that has come back to bite it is unclear but what is evident is that Xiaomi has been sliding down the list of leading smartphone vendors. For example, IDC’s Top Five Smartphone Vendors in its latest Q3 2016 report reveals that rivals Huawei, Oppo and Vivo have bumped Xiaomi off that list.

This slide is supported by Counterpoint Research’s Market Monitor in Q3 2016 which reveals a drastic shift in the Chinese smartphone landscape as Oppo and Vivo emerge as the new smartphone leaders.

Counterpoint Research's research director, James Yan states that Oppo and Vivo became the number one and two smartphone brands in China capturing 17% and16% share respectively.  Research also indicates that Oppo’s smartphones grew 82% annually whereas rival Vivo recorded the highest growth in China during the quarter as demand for its shipments rose 114% annually.

In contrast, Xiaomi’s shipments were down 22% annually, due to the lack of a hero flagship device to drive mindshare. The lack of innovation and presence in the offline space has also hurt Xiaomi’s advances as its e-commerce driven model has hit a ceiling.

Proving that an offline presence is still a key driver of sales, Oppo and Vivo’s rapid expansion rests on their aggressive drive into the low to high-tier segments with promotions and focus on traditional offline retail and wider distribution networks. A market where Xiaomi has a negligible presence.

The question now is not so much whether Xiaomi still has that ‘magic touch’ after the departure of its most well-known spokesman, but whether it can regain its shine under Xiang Wang’s leadership? And if it does, will it take the shine off Barra? Only time will tell.

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