Electronics

From 0 to 500,000 units, in Q1 of 2021, Xiaomi has become the fastest growing smartphone brand in Chile.

According to data from Strategy Analytics, a market research organization, Chile’s smartphone shipments in Q1 of 2021 increased by 71% year-on-year, reaching a record 2.9 million units. Among them, Xiaomi performed the most eye-catching performance, ranking third in the market with a shipment of 500,000 units, a year-on-year increase of 1025%, making it the fastest-growing smartphone brand in the region. At the same time, Xiaomi's market share in Chile has risen from 2.4% in the same period last year to 15.5%.

In 2014, the 4-year-old Xiaomi extended its tentacles overseas. For Xiaomi, Latin America, which loves "buy, buy, and buy," is a fertile soil that needs to be developed urgently. Among them, Chile is the third largest smartphone market in Latin America after Brazil and Mexico, and Xiaomi naturally cannot miss it.

Chile: a mature market that needs to be developed

Chile is a country with high income, high Internet penetration rate and high smartphone penetration rate. According to 2020 data from Worldmeter and Global Economic Index Platform Trading Economics, Chile has a population of approximately 19 million, with a per capita GDP exceeding US$15,000, and is a high-income country.

In terms of Internet penetration rate, according to the data of Digital Portal in January 2021, Chile's Internet penetration rate is as high as 82.3%, and the number of Internet users has reached more than 15 million. When it comes to Chile’s smartphone market, Counterpoint Research analyst Tina Lu said: “Chile is the most mature market in Latin America and has the highest smartphone penetration and replacement rate in the region.” Neil Mawston, Executive Director of Strategy Analytics, also said : "Chile is the third largest smartphone market in Latin America, second only to Brazil and Mexico. Although the country has been affected by the epidemic in 2021, the demand for smartphones remains high. Q1 shipments in 2021 year-on-year An increase of 71% is sufficient proof."

Chile, which has a "good" smartphone development environment, is also a crucial step for Xiaomi's layout in the Latin American market. It is reported that as early as December 2018, Xiaomi has already begun to deploy the Chilean market. However, when it first entered Chile, Xiaomi did not immediately deploy "Mi Stores" (Mi shops), but sold products through some large shopping malls and mobile phone franchise stores, but the sales volume did not seem to be very satisfactory. In order to further open up the Chilean market, on April 27, 2019, Xiaomi's first Chilean "rice shop" opened in the bustling business district east of Santiago, the capital of Chile.

As for the reason why Xiaomi was able to achieve such a record in Chile this time, Strategy Analytics senior analyst Rajeev Nair analyzed: “Xiaomi’s Redmi mobile phone has a very high cost performance, which makes this mobile phone "consumption downgraded" due to the epidemic. It has gained strong recognition among Chilean consumers, which helped Xiaomi achieve the third place in shipments in the region and further increased its market share. In addition, the “loss” of Huawei’s mobile phones during this period also gave Xiaomi A lot of room for growth."

However, in Chile, Xiaomi has to face the siege of Samsung, Lenovo-Motorola, Apple and other competitors, especially the giant Samsung that still "dominates the market." Woody Oh, Director of Strategy Analytics, said: "Samsung’s smartphone market share in Chile is currently relatively stable, at about 42%. In 2021, Samsung’s smartphone shipments in Chile will grow by 63% year-on-year." For Chile’s development space, Strategy Analytics analyst Rajeev Nair added: “If the current growth trend continues, Xiaomi will surpass Lenovo-Motorola by the end of 2021 and become the second largest smartphone brand in Chile.”

Latin America: Love the fertile soil of "buy, buy, buy"

Latin America generally refers to the American region south of the United States, including Mexico, Central America, West Indies and South America. According to United Nations data, there are 33 countries in Latin America and the Caribbean. In 2021, the population of the region has exceeded 650 million. Although the per capita GDP is not low (about 9,000 US dollars on average), the regional development of Latin America is not balanced. Among them, Brazil, Mexico, Colombia, Argentina, Chile, and Peru are the countries with a relatively high level of development in this region, and they have also become the most important markets for players on various tracks.

From the perspective of mobile phone penetration, according to the Global System for Mobile Communications Association (GSMA) data, as of the end of 2020, nearly 70% of Latin American residents have personal mobile phones. For Latin American consumers, Samsung is still the most popular product in the region, in addition to other brands such as Motorola, Apple, Huawei and LG.

From the perspective of market share, according to StateCounter 2021 data, Samsung has a market share of 45% in the Latin American market, leading the way. In addition, Motorola and Apple ranked second and third with 16% and 10% market share respectively. Xiaomi and Huawei are among the top 5 with similar market share. However, for Xiaomi, which started to deploy the Latin American market in 2015, such results are not impressive.

It is reported that as early as 2015, Xiaomi tested the Latin American market. As the largest economy in Latin America, Brazil has become Xiaomi's first choice. However, Brazil’s overall economic situation was not good at that time, and consumers had to “tighten their pockets” to live. Coupled with Brazil’s high taxes and a series of “unfriendly” policies introduced by the government due to local protectionism, Xiaomi was in After frequent setbacks, he finally left with regret in 2016. After 3 years, Xiaomi, which has already gained a certain international reputation, decided to return to Brazil. In June 2019, Xiaomi opened its first physical store in Sao Paulo, Brazil. Subsequently, Xiaomi accelerated its layout in Latin America and sold its products to markets such as Brazil, Mexico, Colombia, Chile and Uruguay through online malls and offline "rice shops".

Today, Xiaomi’s market share in major markets such as Brazil and Colombia are basically in the top five, and it will enter the top three in the Chilean market in Q1 of 2021. However, the Latin American market is still "ruled" by Samsung. In addition, Motorola with a strong "mass base", Apple with both popularity and strength, as well as Chinese brands such as Huawei, vivo, OPPO and realme are also eroding. With this fertile soil.

Xiaomi still has a long way to go if it wants to truly "take down" Latin America.