5 Reasons Why Xiaomi Will Fail in the USA -Part 1

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December 9, 2014 by ...

Xiaomi is frothing at the mouth to enter the US market. There are many reasons for this but principal among these, especially for Chinese companies is face or cred. China exports a lot of stuff and over 97% of all that carries a foreign badge. In other words, only 3% of made-in-China products sold overseas carry the name off a Chinese manufacturer. The rest are subcomponents for foreign firms and or products made from their Chinese subsidiaries.

This leads us to point number one
1- Xiaomi will fail in the USA because it is an unknown brand with little brand appeal.

Think about what makes people desire a Xiaomi
In most markets it has a low price and good value. This is mitigated in the USA by fact that handsets in the US are usually subsidized by carriers. This means that they essentially are free. When one signs a cell phone contract one either gets a phone for free or pays a small amount for a better model. In either case, price is usually a non-issue.

In China Xiaomi is a national champ and leverages pro-Chinese sentiments. While these images may play well in China, I doubt the same is true in America.
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If Xiaomi wants their mascot to rock the red star of communism in order to drive sales in the PRC, then they need to understand that the opposite will be true overseas. For the same reason that these people will love the image above:

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These people will not.

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Setting aside nationalism/patriotism on either side, Xiaomi has not built its brand. To consumers who can buy any phone for an hour’s wage, why choose Xiaomi?

This is related to the fourth reason Xiaomi will fail in the USA,

4- Americans have no need for a knockoff when they can buy the original.
Xiaomi’s message is pretty clear. It is an Iphone clone for a percentage of the cost. They source from Apple suppliers, leverage government subsidies and then sell on the cheap.

In the land that created the Iphone, do you really think that selling its pirated brother will resonate within the market? Absent Xiaomi rejiggering its marketing department, which it does not have, btw, then how will they compel Americans to buy?

While I am on the subject of marketing I will introduce reason number three..

But not quite yet. If you want to learn more you will have to stay tuned…

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