In the midst of the storm, Xiaomi stays its course

• Malaysia deemed an “important market” for Xiaomi
• Diversifying tech products allows Xiaomi to sell smartphones competitively

AS HE settles down on the meeting room chair, Allen An (pic) takes off his coat and breathes a small sigh of relief. Beads of sweat are still visible on his forehead.

It’s a load off his shoulders. Just a few minutes prior to this interview, the country manager of Malaysia and Singapore for the Chinese tech company Xiaomi stood in front of a room full of journalists and Mi Fans (the collective of Xiaomi enthusiasts) to launch the Mi 9T smartphone, a triple-camera device pricing at a very reasonable US$289 (RM1,199).

Remnants of the launch fervour are still present. “Have you seen the phone? Isn’t it gorgeous?” he says in boyish excitement, holding up the device. The tech specs fly off his tongue with practiced ease. “All of these flagship features at half the price compared to others. I believe this is why people love Xiaomi, and this is why I believe our business will continue to grow in Malaysia.”

And grow it will. As Counterpoint Research told Digital News Asia a few months ago, Xiaomi has been growing at almost two times year-over-year from 2017 to 2018 in Southeast Asia, with almost 12% of its total shipments coming from the region, third after China and India.

The question now is just how the company plans to weather the current US-China trade war. Xiaomi may be the fourth largest smartphone company in the world, but they’re also a Chinese tech company, which casts a cloudy forecast for the near future.

But, as Xiaomi demonstrates, perhaps staying the course is its strength.

Malaysia: an important market

“We’re doing well in Malaysia,” An says. “Last year, smartphone sales doubled compared to 2017.” In 2018, Malaysia alone saw over 700,000 Xiaomi smartphones shipped. The brand is also seeing success in e-commerce – they’re the top-selling brand on Lazada, their online partner.

An says that Malaysia is “a very important market” for Xiaomi. They started their Southeast Asian venture with Malaysia in 2014, which An says was “quite an early market.” There are 41 Mi Stores in Malaysia now.

“This is why we have a very firm foundation in Malaysia. We have a lot of hardcore, loyal Mi Fans (over 500,000 of them, according to An) who helped us get this far,” he adds.

Malaysia being important, is why Xiaomi decided to make the country the first in the region to receive the Mi 9T smartphone.

As for the near future in Malaysia, An says that Xiaomi will continue capitalising on their “dual core” strategy. This refers to the two main aspects of the tech company’s business: their smartphone market, and their IoT products, which An calls “ecosystem products”.

“For smartphones, as always, we will continue offering quality products at honest prices. In the future, we hope to bring more of these very competitive products,” An says.

The company will also continue bringing in more of their ecosystem products. At the moment, there are over 300 different Xiaomi IoT products in Malaysian Mi Stores, which range from smartphone accessories like powerbanks and earphones to home electronics like robot vacuums and air purifiers. These are devices connected through the Mi Home app, hence being part of the Xiaomi ecosystem.

While he didn’t say how well the ecosystem market is doing in Malaysia, An says that it has “great potential” in the country.

Staying the course

When asked about how the trade war has affected Xiaomi in the region, An says that things are “so far so good.”

“So far, it has not affected business. Xiaomi is growing very stably, and I think it’s because we’re not just a smartphone company, but an ecosystem company. No matter what happens, Xiaomi will hold on to the principle of providing quality products with honest prices and our dual core business,” he says.

Diversifying their tech offerings means that Xiaomi is able to approach making smartphones differently. The company has always been at the forefront of adopting the latest hardware for their smartphones – as An points out, devices like the original Mi 9 is the first device to offer the Snapdragon 855 processor and 20W wireless charging – while keeping prices competitive.

“We always seek to push boundaries and seek out these latest trends,” An says. He doesn’t deny that more cost-efficient competitors are out there, but Xiaomi can provide better specs-per-dollar because they’re not solely a smartphone company.

“That’s how we are set apart from our competitors. Besides hardware, it’s also our ecosystem, and software,” he adds

By software, An is referring to Xiaomi’s user interface, MIUI, and the host of software it provides. “Xiaomi has a large software team developing MIUI based on feedback from our fans. We also have our Internet business based on MIUI,” he says.

Xiaomi devices can access its own proprietary app store, which has apps and themes exclusive to the platform. 

“That’s why we can have these aggressive price strategies, as we’re earning from other businesses,” An adds.

They say that for houses to weather storms, it needs to have a strong core. For Xiaomi, it seems like they have two of them.