China’s Xiaomi enters UK with phones, wristband and scooter

Xiaomi – the world’s fourth bestselling handset maker – has added the UK to is growing list of markets.

The Chinese firm’s initial line-up for the country includes three smartphones, a fitness-tracking wristband and an electric scooter.

It is also opening a shop in London’s Westfield Shepherd’s Bush shopping centre, which also has an Apple store.

The launch expands its presence in Western Europe, where it is also active in Spain, France and Italy.

Xiaomi has a reputation for competitively pricing its products and seeking to maximise earnings by prioritising volume over profit mark-up.

Earlier this year, it announced it would limit its hardware products’ net profit margin to 5%, suggesting the move would help convince customers it was a brand that could be trusted.

According to market research firm IDC, only Huawei’s smartphone sales are outpacing it in terms of growth among the major manufacturers.

Source: IDC – based on preliminary data

Xiaomi’s initial flagship phone for the UK will be the Mi 8 Pro – an Android handset with a fingerprint sensor hidden behind its 6.2in (15.7cm) display, and a transparent glass rear through which some of its components can be seen.

It will start at £499. That is is significantly less than the cost of premium models sold in the country by Apple, Samsung, HTC, Sony and Huawei, but it matches the price of OnePlus’s new 6T.

Co-founder Xiang Wang told the BBC that Xiaomi intended to expand its range of products in the UK in 2019, and might also launch its sub-brand Poco.

And while he said his firm has no plans at present to hold one of its famous “flash sales” in the country – in which limited quantities of a new device are put on sale at a set time – he indicated that they could be offered at a later date to help drive awareness.

“When Xiaomi enters a country they almost always grow very fast,” commented Neil Mawston, from the consultancy Strategy Analytics.

“That’s happened in India, Indonesia and Russia and now we’re seeing it grow very quickly in Spain.

“Those most at risk of losing sales to them in the UK include Samsung, Huawei, TCL Alcatel, LG and ZTE – Apple is probably safe because it plays in much higher price tiers.”

Another expert added that it would be a mistake solely to focus on the company’s smartphone ambitions.

“It’s jaw-dropping the amount of products that Xiaomi makes,” said Ben Wood, from the CCS Insight consultancy.

“When you go to one of its stores in Hong Kong it’s incredible – there’s everything from robot vacuum cleaners to smart lamps to air purifiers to electric toothbrushes.

“But the big question for me is whether this is a market too far given that there is already an unprecedented level of competitive intensity here, particularly among smartphones.”

However, a third analyst said the Chinese company may have picked the perfect time to join the fray.

“After the UK leaves the European Union, we may see consumers rein back on discretionary spending, resulting in a falling average sales price moving forward,” said James Smith, from Futuresource Consulting.

“Should the consumer wallet be squeezed… we may see increasing demand for mid-range handsets, a market in which Xiaomi has a very strong offering.”