Is there a play for Xiaomi’s entry into the Japanese market?

On December 9, 2019, Xiaomi held a press conference in Tokyo, Japan, where it made its first shot into the Japanese market. In the smartphone market, Japan is as hard to shake as an “island”. Previously, there have been domestic mobile phone manufacturers Huawei, OPPO went to test water, but the market share is very small. But as Asia’s third-largest mobile phone market, Japan has great potential and appeal.

For Xiaomi, the domestic market share is squeezed, the expansion of overseas markets is inevitable. With the reduction of incremental space in markets such as India, Xiaomi is looking for new market increments, and the Japanese market, which has great market potential and is hard to conquer, is the next “hard bone” xiaomi to chew.

Why did Xiaomi cross Japan to the east?

At present, China’s smartphone market is almost saturated. Moreover, the domestic market is showing an imbalance, Xiaomi and other mobile phone manufacturers continue to be eroded market share.

Is there a play for Xiaomi's entry into the Japanese market?

Xiaomi’s market share was only 9% year-on-year, down 33% from a year earlier, compared with 41.5 million units in the same quarter, up 66% year-on-year, according to market research firm Canalys, which reported market share in the third quarter of China’s smartphone market. It can be seen that in China’s smartphone market competition cruel, and Xiaomi actively seek the expansion of overseas markets is also justified.

According to relevant information, Xiaomi has now entered more than 80 countries and regions, in Europe, Africa, North America, South America and many other regions have layout. Xiaomi has achieved good results in several regions, especially the Indian market, with its “value for money” advantage, and it is understood that Xiaomi has been the first in India for seven consecutive quarters.

However, Xiaomi’s high volume in the Indian market also means that the incremental space in the Indian market is gradually reduced, and for Xiaomi, which needs to continue to seek market increments, it is imperative to open up new markets and gain new incremental space.

Looking at the Asian market, the markets in China and India have become saturated, with Samsung, the home-grown mobile phone giant in South Korea. Only Japan, on the one hand, the local mobile phone brand SharpSony has declined, there is no strong local mobile phone brand in the presence;

In addition, at this time is the alternating era of 4G and 5G, the arrival of 5G is about to attract a wave of change, mobile phone market will usher in a new round of shuffling, and Japan as Asia’s third largest mobile phone market, Xiaomi is naturally unable to give up. It’s a good time for Xiaomi to choose to move into Japan before 5G is fully around.

It is worth mentioning that before Xiaomi, Chinese handset manufacturers, including Huawei and OPPO, had already moved into Japan. However, even the aggressive growth of Huawei’s share of the Japanese mobile phone market is only 3.3%, according to strategy Analytics’ q2 2019 data.

And for new pioneer Xiaomi, can you get a piece of the Japanese market?

Difficulty entering The Japanese mobile phone market

In fact, in the mobile phone market, Japan has always been a “island” of the general existence. For a long time, it has been difficult for foreign handset manufacturers to open the door to the Japanese mobile phone market. In the era of function machines, even Nokia failed to win a brick in Japan, let alone Samsung, Motorola and HTC.

According to relevant reports, The reason why Japan’s mobile phone market is hard to beat is its operating model. It is reported that Japan’s mobile phone market is basically dominated by operators, 90% of the market share by the five major operators occupy. Foreign mobile phone manufacturers in order to enter the Japanese market, they must cooperate with local operators.

As a result, consumers are mostly buying mobile phones through carriers, and the phones they purchase will be bound to specific networks and cannot be replaced arbitrarily, creating a closed market mechanism. And within this mechanism, the dominant is the operator. In this closed market mechanism, however, Apple has toss opened a hole.

In 2009, Apple moved to softbank, a weaker carrier, to reach a partnership agreement after NTT DOCOMO, Japan’s largest operator, disagreed with Apple’s share of the bill. Subsequently, SoftBank carried out without down payment, 0 yuan to buy the machine, a year if the battery damage free exchange of services, so that the iPhone once launched will be very popular, a strong impact on the Japanese mobile phone market pattern.

Is there a play for Xiaomi's entry into the Japanese market?

Since then, Apple has taken root in the Japanese market, long occupied the top spot in the Japanese mobile phone market. According to the report, in the second quarter of 2019, 6.933 million smartphones were shipped in Japan, with Apple’s iPhone being the largest with a market share of 37.8 percent. This was followed by Sharp, Samsung, Kyocera and Fuji with a market share of 15.9%, 9.7%, 7.9% and 7.7%, respectively.

In the Japanese market, it is now a single Apple company. Apple has six seats in the top 10 of Japan’s best-selling handsets list for 2018, with the iPhone 8 having a 25.4% share, showing that Japanese consumers are receiving a high share of Apple’s products.

Is there a play for Xiaomi's entry into the Japanese market?

In addition, from the best-selling mobile phone list, it is not difficult to see that Japanese consumers prefer high-end models, which is the main “cost-effective” Xiaomi, it seems a bit of a bit of a water and soil, but, with this to Xiaomi in the development of the Japanese market to sentence the death penalty, is too arbitrary. Xiaomi’s development in Japan, in addition to focusing on the Japanese market, but also can not be separated from Xiaomi itself.

Xiaomi’s move into Japan, not just in the mobile phone market

Is there a play for Xiaomi's entry into the Japanese market?

At the December 9 launch, Xiaomi released six products, including Xiaomi MIX Alpha, Xiaomi Note10, Xiaomi Charge 3, Xiaomi Bracelet 4, Xiaomi Smart Rice Cooker and Xiaomi Travel Box, covering both mobile phones and AIoT.

In addition, Xiaomi also stressed at the press conference will not break the “profit not more than 5%” commitment, still continue to be cost-effective play. And in the previous overseas expansion, Xiaomi is using this advantage to win the Indian market, and for the Apple-dominated Japanese market, Xiaomi’s opportunities?

Is there a play for Xiaomi's entry into the Japanese market?

Obviously, the main cost-effective Xiaomi phone and the main high-end model of the Apple phone is not a segment of the competition. However, there is nearly 60% of the space left outside Apple, which is where Xiaomi’s deer-by-deer is.

In fact, Xiaomi’s move into Japan was well prepared. In 2018, Xiaomi entered into a global licensing agreement with NTT Docomo, Japan’s largest mobile operator, covering NTT’s standard necessary wireless patents. Although Japan has plans to promote the separation of terminal and communications costs, with NTT Docomo, Xiaomi can say that with a double insurance policy, to enter Japan to provide an additional guarantee.

In addition, it is not difficult to see that in the Japanese market, Xiaomi continues its “twin engine” to drive growth strategy. As a result, Xiaomi’s growth in the Japanese market includes the AIoT sector in addition to the mobile phone sector, and from the relevant data, Japan is showing a good trend in this area.

Data from the Japan Electrical Industry Association (JEMA) for March 2019 show that shipments of domestic electrical appliances in Japan amounted to 244.4 billion yen, an increase of 5.9% year-on-year. It is worth noting that this has been the 11th consecutive month of growth. Visible, the field of home appliances has a larger space for development.

From the product sleek design and appearance of Xiaomi AIoT, it also coincides with the Japanese design style, coupled with the advantages of technology and cost-effective, Xiaomi is not likely to open the situation in Japan.

Is there a play for Xiaomi's entry into the Japanese market?

It is worth mentioning that Xiaomi chairman Lei Jun is also very optimistic about this. On the day of the launch, Lei Jun lamented on Weibo:

Xiaomi sold the rice cooker back to Japan!

Today is Xiaomi’s debut in the Japanese market, released a rice cooker outside, also released the Mi Note 10 (Xiaomi CC9 Pro) and other products. A lot of media came and the press conference was full. I believe that the Japanese people will like to come from China,” a good product of “moving people’s hearts and prices”!

On the whole, although the East Crossing of Japan is long and long, Xiaomi has not tasted it.

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