The reputation crisis of Xiaomi and Lei Jun and the first in the world

On the evening of August 10, Lei Jun, founder and chairman of Xiaomi group, made bold remarks at the new product launch.

However, the market does not seem to buy it.

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Embarrassing three consecutive falls

Growth outlook and hardware manufacturer attributes

LAOCAI

On August 11, Xiaomi’s share price closed at HK $26.850 / share, down 2.19%. On the 12th, it fell another 2.05%. As of the closing on the 13th, the share price was HK $25.45, down 3.23%, with a market value of HK $638.4 billion.

Embarrassing three consecutive falls is also logical.

On the surface, Xiaomi is still 2 percentage points away from the market share of the world’s first Samsung.

But the challenge is far more than that.

In the second quarter of 2021, Xiaomi’s global mobile phone sales surpassed apple, ranking second in the world for the first time; It reached the top for the first time in Europe, surpassing Samsung and apple.

The achievements are worthy of recognition, but public opinion has doubts about whether they can make great achievements and go further.

“There are still difficulties.” Pan Helin, executive dean and professor of the Digital Economy Research Institute of Central South University of economics and law, said frankly that the main reason why Xiaomi is shining in the domestic smartphone field is the shrinking domestic market share of Samsung and Huawei. It is unclear whether this pattern will continue in the next three years.

Indeed, the eldest fell and the second was full. Huawei’s robbery gave Xiaomi a good opportunity to rise.

Lack of core Huawei, pain and glory separated, and the domestic market share fell from “top 1” to “others” in statistics.

The vacant market naturally becomes the food sharing object of various manufacturers.

However, focusing on Xiaomi, the global sales volume has achieved a leap, but the domestic achievements are not the king:

In the first quarter of 2021, canalys released the domestic smartphone market data, which showed that the first market share was dominated by vivo and the second was oppo; In the second quarter, vivo and oppo still ranked the top two with market shipments of 18.2 million and 16 million respectively, and Xiaomi ranked third.

On the other hand, the high-end influence of foreign brands can not be ignored. Lin Yong, an industry analyst, said that the global shipment level of S and note series of Samsung mobile phones is tens of millions. According to Xiaomi’s financial report data, the whole series of Xiaomi 11 models have sold 3 million units, and there is still a big gap. Apple, which has been temporarily thrown away, has a voice in the 7K + market, which is beyond Xiaomi’s reach.

A deeper consideration is that the market dividends released by Huawei cannot be eaten all the time. Regardless of the contingency of growth, it is worth thinking about how to improve in the future, what to rely on for the first place in the world, and even keep the existing share.

According to the Q1 financial report in 2021, the total revenue of Xiaomi group was 76.9 billion yuan, a year-on-year increase of 54.7%; The adjusted net profit was 6.1 billion yuan, a year-on-year increase of 163.8%. The revenue net profit reached a record high in a single quarter, but compared with the revenue volume of more than 70 billion, the net profit of more than 6 billion is still not enough.

Focusing on business, although it has run through the “hardware + new retail + Internet”, hardware is still the mainstream of revenue: Xiaomi mobile phone revenue accounts for about 67%, IOT products account for about 24%, and the sum of the two exceeds 90%. High profit Internet business contributes less than 10% of revenue.

There is also a strengthening trend in the above performance: in 2021, Q1 smartphone revenue increased by 69.8% year-on-year, IOT products increased by 40.5%, while Internet business increased by only 11.4%.

In other words, the attributes of Xiaomi hardware manufacturers are still very heavy.

In contrast, it is the pain point of low gross profit margin. Although the gross profit margin of Xiaomi mobile phone has increased from 8.1% to 12.9%, the gross profit margin of Xiaomi IOT products has reached 14.5%, and the gross profit margin of the company has increased to 18.4%. But the overall comparison is still low. Apple’s latest financial report shows that the gross profit margin is as high as 41.66%.

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