once relied on hunger marketing to become popular all over the country. If consumers want to buy a computer, it is simply difficult to reach the sky.
" Xiaomi mobile phone is born for fever." With this catchy slogan, Xiaomi mobile phones have been running wildly.
was established in April 2010. As of Q2 2021, its global market share once reached 17%, surpassing , Apple Inc. (14%), and becoming the second largest mobile phone market in the world for the first time, behind the leader , Samsung Inc. (19%). %) is only 2 percentage points.
Xiaomi mobile phones used to be unparalleled.
Unfortunately, times have changed, and today's Xiaomi has begun to be unsaleable. The day after
618 ended, Xiaomi announced its 2022 record of 618. Omni-channel sales exceeded 18.7 billion. Compared with the sales data of last year, which exceeded 19 billion in 618, the battle report at that time showed a significant regression. It seems that there is only 300 million less, but last year's statistics were only online sales, but this year's 18.7 billion includes Xiaomi Home . Excluding offline channels, the gap with last year is actually far more than 300 million.
Judging from the information disclosed in the 2022 Q1 financial report, Xiaomi mobile phone sales in the first quarter were not ideal. Global smartphone shipments were 38.5 million units, a year-on-year decrease of 22%.
has been having a fever for many years. What are the important factors restricting Xiaomi's growth now?
618 Poor performance
In my impression, Xiaomi always gives people a "high cost performance" impression.
Based on this, when Xiaomi first debuted, it won the favor of a large number of consumers with its advantages of high quality and low price. During this period, Xiaomi mobile phones were often hard to find.
But this year’s 618 has completely revealed the embarrassing situation that Xiaomi cannot sell even if it has the advantage of low price.
This year, major mobile phone manufacturers have obviously made great concessions on the 618 price. Xiaomi, as the highest-selling mobile phone brand among domestic mobile phone brands, is no exception.
In order to welcome 618, Xiaomi has significantly reduced the prices of almost all its mobile phones.
Typical examples include K50Pro, Xiaomi 12X, Xiaomi 12Pro, Xiaomi 11Ultra, etc., all of which have set new records for the lowest selling price of this model.
According to Southern Metropolis Daily media report, among several popular models, the price of Xiaomi 11 Ultra (8+256GB) has dropped the most. The initial listing price was 5,999 yuan, and the price dropped to 3,699 yuan, with a price reduction of up to 2,300 yuan. Yuan.
Although there was a significant price reduction of more than 2,000 yuan, it still failed to save Xiaomi's sales.
In 2022, Xiaomi’s 618 campaign reported that the cumulative payment amount across all channels exceeded 18.7 billion. Compared with last year’s 618 all-platform cumulative payment amount exceeded 19 billion. It is not difficult to see that Xiaomi mobile phones seem to be unable to sell.
Another source said that Xiaomi has tens of millions of mobile phones in stock and demand is obviously weak.
A fact that has to be admitted is that Xiaomi is already in decline, and this situation has been reflected in Xiaomi's financial report early.
Both domestic and foreign sales have dropped
In 2022, Xiaomi is showing an unfavorable start.
html On May 19, Xiaomi Group released its financial report for the first quarter of 2022. Total revenue for the period was 73.35 billion yuan, down 4.6% year-on-year; adjusted net profit was 2.86 billion yuan, down 52.9% year-on-year. This directly set a record for Xiaomi’s first quarterly year-on-year growth decline in revenue since its listing in 2018.
Specifically, the decline in Xiaomi’s mobile phone sales is an important factor in Xiaomi’s overall revenue decline. The
financial report shows that Xiaomi’s main revenue is dominated by smartphones, IoT and Internet services. In the first quarter of 2022, these three revenue accounts for 62.4%, 26.6% and 9.7% respectively. The smartphone business is obviously Xiaomi’s largest revenue. source.
It is worth noting that Xiaomi’s smartphone gross profit margin dropped from 12.9% in the first quarter of 2021 to 9.9% in the first quarter of 2022.
However, in the first quarter of 2022, Xiaomi shipped 38.5 million units, a 22% decrease from the 49.4 million units in the same period last year, a drop of more than 10 million units. This seems to indicate once again that Xiaomi mobile phone price cuts cannot offset the decline in sales.
destocking is Xiaomi’s current important goal.
According to statistics, Xiaomi now clears its inventory once every 80 days on average, which takes nearly half a month longer than the first quarter of last year. This is also the result of Xiaomi increasing its promotional efforts.
In the first quarter of 2022, Xiaomi's sales and promotion expenses were 5.3 billion yuan, a year-on-year increase of 26.2%, which was significantly higher than the revenue growth rate. This was mainly due to the increase in publicity and advertising expenses and the increase in the unit cost of overseas logistics.
According to the latest report released by market research organization Canalys, smartphone shipments in mainland China in the first quarter of 2022 were 75.6 million units, a year-on-year decrease of 18% and a month-on-month decrease of 13%.
During the same period, Xiaomi shipped 10.6 million units, ranking fifth, with a market share of 14%, a year-on-year decrease of 22%. It can be seen from this that the decline of Xiaomi is significantly higher than the decline of in the domestic market.
In addition to losing the domestic market, Xiaomi’s overseas market performance is also extremely poor. The
Canalys report shows that in the first quarter of 2021, although Xiaomi still occupies the first position in the Indian smartphone market, with a market share of 21%, its year-on-year decline reached 24% due to the Indian government’s suppression.
In addition, in the first quarter of 2022, Xiaomi experienced negative growth in Eastern Europe, the Middle East, , Africa, Indonesia, and other countries, with a decline of approximately 28%-32%.
In the major smartphone markets around the world, Xiaomi only achieved 85% positive growth in Brazil .
Mobile phones that “can’t be replaced”
From queuing up to buy to being languishing, why did Xiaomi mobile phones suddenly become unpopular?
The main reason why Xiaomi cannot sell is that the entire smartphone has entered a stage of weak innovation.
The first-generation iPhone was released in 2007, leading the world into the era of smartphones. At that time, smartphones were constantly being introduced and new features were constantly stimulating young people to go crazy for them. At its peak, some people even sold their kidneys for it.
However, since Apple released its first full-screen mobile phone iPhoneX in 2017, smartphones have not had any amazing innovative features for five years.
Insufficient innovation has failed to stimulate consumers’ impulse to replace their phones, and the replacement cycle of smartphones has therefore continued to lengthen.
Not long ago, a hot search on "Why young people can't change their mobile phones" caused a lot of heated discussion.
According to media reports, the current bleakness of China’s smartphone market has been exposed to the public. The decline in young people’s enthusiasm for mobile phone consumption is the biggest headache for mobile phone manufacturers.
A survey report by Deloitte shows that in 2015, about 70% of smartphone users in 14 developed market markets changed their phones once in the past year and a half.
By the beginning of April this year, the topic "Why don't young people like to change their mobile phones?" became a hot search topic. Liu Zuohu, founder of OnePlus , took the opportunity to conduct a small survey on Weibo and asked fans how long it had been since they changed their phones. cell phone? The one that appears most in the
comment area is the flagship phone 7Pro released by OnePlus in 2019, which also means that the model in the hands of these fans is still three years ago.
According to China Academy of Information and Communications Technology data, from January to May this year, the total mobile phone shipments in the Chinese market totaled 108 million units, a year-on-year decrease of 27.1%; the cumulative shipments of Chinese brand mobile phones were 90.677 million units, a year-on-year decrease. 30.6%.
So, how can we rekindle young people’s demand for phone replacement?
On February 8 this year, Lei Jun announced through Weibo that "Starting today, Xiaomi Group has officially established a high-end strategy working group. Under the guidance of the three-year strategy of ranking first in mobile phone sales in the world, it has clarified the high-end strategic goals: products and The experience must be fully benchmarked against the iPhone and win the first place in the domestic high-end mobile phone market share within three years. "
For this reason, as early as the beginning of 2020, Xiaomi had announced that it planned to invest 50 billion in R&D in the next five years. By the end of 2021, Xiaomi's R&D investment has already reached More than 22 billion yuan, more than 16,000 engineers.
At this year’s high-end strategy seminar, Lei Jun once again stated that he would resolutely implement the previously updated plan of “investing in R&D to 100 billion yuan in five years.”
aims to compete with Apple and hit high-end products, thereby increasing its own innovation power. It will obviously become an important game-breaking weight for Xiaomi.
However, through horizontal comparison, Xiaomi’s investment is far from enough.
data shows that Huawei’s R&D investment in 2021 will reach 142.7 billion yuan, accounting for 22.4% of annual revenue.Apple’s R&D investment in 2021 will be US$21.9 billion (approximately 140 billion yuan), an increase of 16.8% over the previous year.
With such a huge gap in R&D investment, it may not be easy for Xiaomi to differentiate itself through innovation.
Finally, after Xiaomi gets rid of low prices, will consumers be willing to continue to pay for Xiaomi's high-end image and high prices?
Source: Huahua Finance Editor: Zheng Chuqiao
