Going overseas to "gold rush", its sales ranking ranks among the top three in 55 markets around the world

In the past two years, a large number of Chinese companies have taken going overseas as an important development direction. Among them, Xiaomi is undoubtedly a typical representative of excellent companies that went overseas in the early stage.

From a household name in China to a bold move to expand overseas, Xiaomi has gradually grown into a "Chinese brand" with global influence. Recently, Xiaomi has once again delivered an excellent overseas performance report.

The financial report shows that in the second quarter of 2022, Xiaomi Group's overseas Internet business revenue hit a quarterly record, a significant year-on-year increase of 52.1%, reaching 1.7 billion yuan. Despite the impact of the global macroeconomic environment, it still ranks among the top three in smartphone shipments in 55 countries and regions around the world, and among the top five in shipments in 67 countries and regions around the world.

Relying on the continuously expanding user base and deepening content and service ecosystem, Xiaomi's global MIUI monthly active users also hit a record high of 547 million.

Exploring Xiaomi's successful overseas expansion experience, we will find that the Southeast Asian market, one of the starting points for Xiaomi's globalization journey, is a key topic that cannot be ignored. It is understood that Xiaomi's popularity in the Southeast Asian market is increasing, and its products have repeatedly taken the "top spot" on cross-border e-commerce platforms.

Without the halo of being a "domestic brand", Xiaomi's growth in Southeast Asia is like other brands, and it will inevitably face many commonplace challenges: How to maintain its advantages in a highly competitive market environment? How to do a good job of localization in terms of consumer insights, products, store operations, etc.? With the international market constantly changing, what adjustments need to be made in operational strategies? What are the latest consumer trends in the Southeast Asian e-commerce market that can be grasped?

The answers to these questions are believed to be very important not only for Xiaomi, but also for every Chinese company that wants to go global. So, we talked with Liang Jiawen, General Manager of Xiaomi's International Business Department in Southeast Asia, hoping that his thoughts on these issues can bring you some inspiration.

After careful consideration, Southeast Asia becomes Xiaomi's starting point for overseas expansion

When it comes to Xiaomi, many people's first impression is that it sells mobile phones. In fact, this perception is very one-sided. At present, Xiaomi has successfully built its own rich product matrix. In addition to smartphones, there are also wearable devices, smart homes, smart manufacturing, smart electric vehicles, bionic robots and other ecological chain products.

As one of the pioneers of Chinese brands going overseas, Xiaomi started its internationalization journey in 2014.

Xiaomi has many advantages in choosing Southeast Asia as one of its first international stops. "Southeast Asia has a good business environment, and its transportation and logistics infrastructure is relatively complete. It is also relatively easy to recruit local talents with international backgrounds." Liang Jiawen said that many markets in Southeast Asia are famous for their internationalization, rapid economic development, and cultural tolerance, and excellent talents from all over the world gather here. Taking language skills as an example, many markets in Southeast Asia have high-end talents who can speak both English and Chinese. They not only have strong language skills, but also have advanced international company management experience. Overall, Southeast Asia and Xiaomi are very compatible.

To date, Xiaomi has offices in Singapore, Malaysia, Thailand, Vietnam, the Philippines, Cambodia, Laos and Indonesia. In 2021, according to a report by Canalys, Xiaomi became the third-ranked smartphone brand in Southeast Asia, with a market share increase of 42%, far exceeding other brands.

Unlike other brands that started from scratch, Xiaomi had already accumulated a number of Mi fans before entering Southeast Asia. It is understood that when Xiaomi released its first mobile phone in 2010, Mi fans already covered nearly 100 countries and regions, a large part of which were in Southeast Asia. Therefore, Xiaomi's acceptance in Southeast Asia is higher than other brands, and it will be easier to get started.

But this alone is not enough to support Xiaomi's continued growth in the Southeast Asian market. The cultural backgrounds and consumption habits of various market segments in Southeast Asia are different, and many companies going overseas will encounter "not adapting to the local environment", resulting in insufficient growth momentum. This means that companies can only avoid being washed out if they keep "keeping up with the times" and make different products in different markets based on the latest local market characteristics. On this issue, Xiaomi Southeast Asia has always focused on implementing the localization policy, and the product layout in each market is different.

"Singapore and Malaysia are markets with a relatively high proportion of people who are proficient in Chinese. Therefore, when promoting products, we will continue to use some of the domestic brand positioning or product positioning. At the same time, considering that the per capita GDP of these two markets is generally high, they are more in line with the trend of consumption upgrading, so we will also focus on the sales of ecological chain products such as smart home products in these two markets. From the results, the effect is very good, and the sales share is relatively high.

In addition, markets such as the Philippines and Vietnam have a large population base, and consumers prioritize cost-effectiveness. When promoting products, we are more inclined to invest in Redmi series products in terms of mobile phones, and in terms of ecological chain products, we mainly promote some entry-level products, such as smart homes, so that these new consumers can also get in touch with Xiaomi. "

Cost-effectiveness is a powerful weapon, but Xiaomi's competitive advantage in Southeast Asia goes beyond this

There is no doubt that cost-effectiveness is Xiaomi's powerful weapon in its expansion into Southeast Asia.

Readers familiar with Xiaomi know that Xiaomi's business philosophy is "Innovative for everyone", which can be summed up in eight words: reasonable prices and touching people's hearts. "We will put some more forward-looking technologies, or some more high-end and creative functions into our products, but unlike traditional brands, we will use these forward-looking technologies, or high-tech functions, to reach more consumers with a fair price strategy." Liang Jiawen said that Xiaomi has always hoped to quickly popularize functions, so that more people can contact and use advanced technologies earlier and more conveniently, and more people can enjoy the good life brought by technology.

In addition to adhering to the "high cost-performance" strategy in Southeast Asia , Liang Jiawen believes that the key to Xiaomi's success in Southeast Asia lies in the following four basic strategies:

First, we adhere to the dual-engine strategy of "mobile phone + AIoT" and strive to become a technology brand centered on mobile phones and building a series of smart ecological products. At present, in addition to mobile phone products that are popular in Southeast Asia, Xiaomi's smart home, smart wearables and other categories are also gradually being sought after by local consumers.

Second, adhere to the "online and offline" dual development retail layout. E-commerce is Xiaomi's strength, but Xiaomi also adheres to the offline retail layout strategy in Southeast Asia, combining online and offline methods to enhance the local recognition and popularity of the Xiaomi brand.

Third, stick to the original intention and continue to build and expand the Mi Fan Group. Before going to Southeast Asia, Xiaomi had already gained a group of fans in Singapore and Malaysia. Now Xiaomi's loyal fans have expanded to markets such as the Philippines, Vietnam, and Thailand. These fans not only effectively promote product sales, but also provide many practical suggestions during the product development process. For example, when Xiaomi promoted its new flagship products in the past two years, in the research of photo or video functions, some Thai photographers and photography enthusiasts, as Xiaomi fans, provided very good design inspiration throughout the process of developing imaging technology.

Many Mi fans have successfully joined the Xiaomi team and become the core business backbone of Xiaomi. It is understood that a product manager in charge of non-mobile phone and ecological chain product categories in the Malaysian market and an account manager in the Vietnamese market were both loyal fans of Xiaomi products.

Fourth, we will implement the Glocal talent strategy, organize localized professional teams in Southeast Asia, and build Xiaomi into a Glocal company. Glocal means global and local, and the focus is on identifying local high-end talents, then introducing and maintaining these local high-end talents, and ultimately allowing them to align with Xiaomi's overall philosophy in terms of business philosophy and brand philosophy.

Every brand will inevitably face challenges when entering overseas markets. "For Xiaomi, we not only need to consider how to make the brand more efficient and faster so that more consumers can understand and accept it, but also how to deliver the goods to consumers more efficiently and quickly. At the same time, we also face a series of other unknown challenges." However, in Liang Jiawen's view, these challenges can basically be solved through Xiaomi's four major strategies.

Xiaomi makes both mobile phones and smart ecosystem products, which can form brand differentiation competition in the minds of consumers. In real life, many Mi fans will buy a series of supporting products such as headphones and power banks after buying mobile phones, just like collecting stamps to buy the entire combination. Xiaomi's "mobile phone + AIoT" dual-engine strategy can help Xiaomi expand product sales, increase brand competitive advantages, and continuously improve consumer stickiness.

The retail layout strategy can bring consumers a better shopping experience. Through offline layout, it can not only be more convenient to hold various offline marketing activities and make fans more closely connected with the brand, but also enhance the user's product experience.

Whether it is insisting on doing a series of marketing around Xiaomi fans or introducing local high-end talents, these measures have effectively strengthened the connection and communication between Xiaomi and users, enabling Xiaomi to successfully enter the hearts of Southeast Asian consumers and better embrace the Southeast Asian market.

Optimistic about the development potential of the online market, leveraging cross-border e-commerce platforms to accelerate development

The global consumer market is shifting towards online consumption, and Southeast Asia has become one of the fastest growing markets for e-commerce in the past five years. Xiaomi, which is optimistic about the potential for online development in Southeast Asia, has always regarded e-commerce as a very important strategic channel. At the same time, it is also iterating itself to achieve new breakthroughs while keeping up with changes in consumer trends.

Liang Jiawen said that during the outbreak of the epidemic in 2020, offline shopping was greatly affected, and online consumption ushered in a booming development. At this time, brands only need to provide a good discount or promotion in e-commerce channels to attract consumers' attention. However, with the advent of the post-epidemic era, the online economy has also entered a period of transformation and upgrading, and brands that focus on refined store operations can stand out from consumers. Therefore, Xiaomi is also continuing to increase its investment in e-commerce channels in the Southeast Asian market, focusing on users, and doing a good job in refined operations, including a series of shopping links such as store decoration, e-commerce product descriptions, logistics delivery experience, and customer service, to continuously improve the consumer experience.

At the same time, with the help of cross-border e-commerce platforms, the full-link service and logistics capabilities are improved. For example, Xiaomi is currently using the Shopee fulfillment service (Fulfilled by Shopee, referred to as "FBS") in the Shopee Logistics Service (SLS) to ensure that products reach consumers faster.

In addition to logistics, Southeast Asian cross-border e-commerce platforms have also helped boost Xiaomi's growth in Southeast Asia by providing a deep understanding of local users and markets.

In 2015, Xiaomi decided to cooperate with Shopee. The reason for this decision is that the two have similar brand genes - user-centric, love to explore new business models, and constantly break through themselves. In Liang Jiawen's view, the establishment time of Shopee also coincides with the time when Xiaomi is going to Southeast Asia. The growth trajectory and target groups of the two are highly consistent. After cooperation, it can help Xiaomi reach more consumers. From the results, the effect is also very good.

One of the classic cases is that in the second quarter of 2020, Xiaomi did a very good deep bundling and cooperation in the Malaysian market and platform, which promoted the Redmi Note 9 to quickly gain a high popularity in the local area.

It is understood that during the pandemic, consumers could not go out, so Xiaomi decided to do live streaming on the platform to promote its new product Redmi Note9 - this product is very attractive in terms of both configuration and pricing. During the live broadcast, Xiaomi's e-commerce team and marketing department appeared in person, and with the help of Shopee's 66 promotion, product sales soared rapidly, becoming the first smartphone brand to promote the live streaming trend in Southeast Asia during the pandemic. In 2022, Xiaomi became one of the first five brands to enter Shopee's 100 million US dollar club.

Actively seek change and keep up with the latest consumption trends in Southeast Asia

As the Southeast Asian e-commerce market gradually bids farewell to its initial growth stage, Xiaomi, which enjoyed the dividends of Southeast Asia's mobile Internet at the earliest stage, is exploring new consumption trends in this market.

Liang Jiawen believes that high-end phones and O2O are two opportunities that Xiaomi can focus on at the moment.

First of all, it can be predicted that high-end phones or high-end categories have great development potential in the future. In the past, people's inherent impression of e-commerce is that it wins by price, but in fact, consumers have strong spending power in the high-end market. For this group of high-end users, Xiaomi is committed to strictly polishing product quality and trying its best to meet the purchasing demands of high-end users in aspects such as store experience.

For high-end users, payment and logistics timeliness are of particular concern. Therefore, there is still a lot of room for brands to play in improving the efficiency of settlement links, optimizing delivery links and the last mile of transaction chains.

Secondly, we should do a good job in the O2O model and realize the perfect combination of online and offline. At new product launches or other major promotional events, more and more consumers hope to make reservations online first, and then go to offline stores to experience the product, settle accounts, deliver, and other transaction processes. Especially for some large items, after customers place an order, they also hope that the brand can meet the needs of door-to-door delivery and installation. This requires brands to think about how to perfectly connect online stores with offline stores and realize Internet landing, so that consumers can enjoy online price discounts while enjoying offline high-quality experience services.

Summarizing Xiaomi's successful experience, we will find that Xiaomi not only insists on product first, but also strives to provide localized customer service, payment, logistics and other full-link transaction services, while always maintaining innovation and seizing every opportunity to enhance brand and sales. As globalization is becoming a must for more Chinese companies, Xiaomi's success in Southeast Asia is undoubtedly of great reference significance.

E-commerce platform

Millet