Xiaomi is in some serious trouble

Xiaomi's bad year is getting worse. Given strong offline sales from rival manufacturers, their primarily online strategy took a huge hit especially in the home market where the company has now dropped to 4th position.

Xiaomi saw a 38.4 percent decline in smartphone shipments in China according to data published by IDC for April to June. Xiaomi had sold 17.1 Million smartphones last year during the same time, while this time around they were able to sell only 10.5 million units. This comes in the wake of the Chinese smartphone market growing by 4.6% percent over the past year.

The data from the report clearly shows the new rising stars of the Chinese market - Huawei, Oppo and Vivo which are now the top three players, with Xiaomi pushed to the number 4 spot. A similar trend was seen in the global smartphone marketshare report for Q1 2016 with Lenovo and Xiaomi pushed out of the top 5 smartphone vendors by Oppo and Vivo.

Apple took a heavy beating as well with the iPhone SE failing to create any excitement in a market where people tend to like larger smartphones. From number 3, Apple fell to the 5th spot with a 31.7% decline in total shipment volume. Still, in Q2 2016 Xiaomi got hit the hardest with Huawei, Oppo and Vivo concentrating on advertising, celebrity endorsements and differentiating products based on price points and user needs, like fast charging, great cameras. Oppo's VOOC fast charging and Huawei's Leica lens both were advertised to great effect.

There is a ray of hope though, this data does not include the Mi Max which was launched mid-may in China. That may actually save the year for the company, then strong sales of Redmi Note 3 and Redmi 3S in India may also help their bottom line. We have also heard that Xiaomi is working to double down on offline operations in India which would again boost sales figures.

But Xiaomi has lost quite some ground in China, for a long time they remained at the top of the smartphone vendors list in the country but gave away their position by being complacent. They now have a huge diversified portfolio of products starting with pens, smart bulbs, drones, air purifiers to Smart TVs, Laptops and now Washing Machines (yes it exists). Smartphones are still what Xiaomi is known for, but of-late we keep hearing more about everything else the company makes. Given recent developments, I think it's now time to consolidate and bring that sharp edged focus back.

Image Credit: WSJ