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Global Perspective - News Worth Sharing

  • My father and I always get into a battle of superlatives, and yes, I always win because I live in China, land where everything is the biggest and fastest growing. But this year, my father finally nailed me with one: as of 2016, my hometown of Sioux Falls, South Dakota, has doubled in size since I was born there. The city is now bursting at the seams and has grown to close to 160,000 people, making it one of the American Midwest’s biggest urban success stories. Sioux Falls has no natural resources, just a healthy business environment and friendly people which have attracted newcomers to the place for decades.

    Sorry, Dad, but in population terms, Sioux Falls is roughly the same size as a tiny portion of my Shanghai neighborhood, which is a part of a bustling city of 25 million people, one of the largest in the world, and yes, it’s grown exponentially over the years. Gotcha.

    When it comes to size, you can’t beat China, and for many of us, bragging rights were one of the reasons we came here to be a part of the most exciting and dynamic markets in the world. The thought of selling products to 1.3 billion people has always been insatiable to global brands and agencies have also contributed in fueling the wildfire. When you present to new international clients, you can’t help but start out your digital presentation with the infamous superlative slide showing massive internet penetration and huge smartphone growth. Some digital planners have even made a living off of presenting China digital superlatives to clients. They can’t write a brand strategy but can dazzle “China rookies” with stories of the meteoric rise of WeChat. The truth is that we the little people had nothing to do with it, but it’s still wonderful to be a part of the action.

    Six years ago, thinking big was also how brands used to conquer China digital. As the market turned away from traditional advertising and traditional retail, brands that were perceived as innovative were the ones who poured a large percentage of the marketing budget into the sector. It was those days when brand mini-sites and crazy banners were the rage, and it didn’t matter that nobody clicked on them, they just had to look cool. Quantity of fans on social media site Weibo was way more important than the quality of them, and brand managers even allocated funds to agencies to create zombie fans to impress their bosses back home. 

    It was all to live up to the big—and may I say—artificial dream of reaching a billion people. And now that social media channels and closed digital television platforms have made Chinese millennials virtually unreachable, it’s time to stop thinking big, because big digital, for most brands, doesn’t work anymore.

    In fact, it’s time for China advertising to think small… I’m talking Sioux Falls, South Dakota, small.

    The reality is that most brands—especially in the luxury segment—are not interested in the masses and really can achieve success by talking to smaller groups of individuals, who are the only ones who are truly interested in buying their products. That’s the magic of China: a tiny percentage of a billion people is in fact far bigger than their entire market in the UK. The challenge comes in on how to micro-target them, sorting the prospects from the others, and that’s where the power of data comes in.

    China marketers collect troves of data but use it primarily for sales reports, and rarely build predictive models that could help them better understand common traits in behavior of their target consumers. With such high degrees of channel fragmentation in China, success is really about fishing where the fish are.

    Take the auto market, for example. Dealers get hundreds of potential leads daily, but which ones to call first? More importantly, who is most likely to buy? Predictive modeling is one way to develop patterns in customer behavior to sort out the most likely buyers of its luxury and mainstream auto brands. Through predictive modeling, we were able to flag those most likely to convert, resulting in a 1.5 times increase in sales over traditional leads cold calling.

    Luxury brands have loads of data collected from social media, retail stores, and e-commerce, and can start to create segments not just based on past sales, but also demographic and lifestyle interests. For Bentley, for example, we send out segmented and targeted WeChat communications on a daily basis.

    Data targeting helps bring clarity to a clouded, super-sized China market. China superlatives are still fun, and yes, my father will continue to lose our battles, but it’s really about the quality of smaller and more effective, targeted audiences is where the focus needs to be. Luxury brands need to use the power of data modeling to fish where the fish are.


    Bryce Whitwam is the CEO at Wunderman China.  He can be contacted at bryce.whitwam@wunderman.com.

    The post Op-Ed | When It Comes to Luxury Advertising in China, It’s Time to Think Small appeared first on Jing Daily.

  • fight, strong, wrestle

    For Flipkart and Amazon, it’s about who blinks first. Photo Credit: undrey / 123RF.

    Every year around this time, Indian Ecommerce goes into a tizzy as leading online marketplaces announce their yearly carnival – the season of mega-discounts.

    Amazon, Flipkart, and Snapdeal are now standing on the brink of what analysts think could be a defining point for the country’s online shopping industry, as discounts go down and sales somewhat flatten. More so for Flipkart, which could see a make-or-break season this year.

    “Discounts will be down by at least 20 percent in most categories. That (will) pull back sales a bit,” said Ashish Jhalani, founder of research firm eTailing India.

    The festive season in India begins around October and culminates in Diwali. The days in between are considered auspicious for making purchases, driving sales of big-ticket items like furniture, home appliances, gadgets, and jewelry.

    Ecommerce players could look at business worth as much as US$12.8 b this festive season

    For any retailer, the festive season accounts for almost a third of their annual sales. Some analysts say that could be as high as 40 percent for online retailers.

    Given that the Internet and Mobile Association of India expects the ecommerce market in the country to be worth about US$31.5 billion by December, one could infer ecommerce players are looking at business worth as much as US$12.8 billion this year.

    For the past few years, Amazon, Flipkart, and Snapdeal have ridden the holiday wave on the back of massive discounts to claim eye-popping numbers that really mean nothing. Surrounding media frenzy fed into rhetorics of “crazy offers”.

    shoping online

    Photo Credit: dolgachov / 123RF.

    A 2015 report by Goldman Sachs said about 30 percent of an Indian ecommerce company’s expenses were geared towards discounts, second only to the 65 percent that went in warehousing.

    This year, Amazon India announced it would host its Great Indian Festival from October 1 to 5, pat on top of Flipkart’s Big Billion day sales, which is being held from October 2 to 6, setting them up for a major showdown. Amazon and Flipkart have locked horns last year, but the stakes are higher now than ever before.

    Snapdeal’s sales too start October 2. The company has invested in an entirely new rebranding campaign to go with, as it tries to gain back lost ground.

    See: Snapdeal slipped up against Amazon, Flipkart. Here’s how it plans to redeem itself.

    Flipkart’s moment of truth

    bomb, time, ticking

    Photo Credit : macrovector / 123RF.

    Wary global investor sentiment and tight funding have made it harder for India’s high-valued startups to raise funding, and everyone’s feeling the need to stem cash burn.

    The pressure is piling on Flipkart, which has to defend its turf as market leader.

    While a recent Bank of America – Merrill Lynch report said Amazon is still going to trail Flipkart for the next three years, many industry insiders beg to differ.

    “If you look at this season itself, I would be surprised if Amazon does not come out to say their run rates for GMV for the festive month have surpassed Flipkart,” eTailing India’s Ashish said.

    “If anyone is expecting the likes of Flipkart to gain market share this festive season, that’s not going to happen. … Brands anyway won’t allow more discounts than is available offline. For Flipkart, it’ll be an achievement if they ensure that they don’t concede any further market share,” Harminder Sahni, founder and managing director of Wazir Advisors told the Mint newspaper.

    See: Amazon India gets a cool $3 billion more while rivals see funding crunch

    Add to this the fact that Amazon says it is kicking off this season with 200 percent more sellers, thrice the selection (of last year), 1.5 times more fulfilment capacity, and very deep pockets.

    “With 24 fully operational fulfillment centers offering a storage capacity of over 6 million cubic feet, we have built the largest fulfilment infrastructure and storage capacity for our every growing seller base to ensure fast and reliable delivery to our customers,” Manish Tiwary, VP of category management at Amazon India told Tech in Asia.

    “We do believe that customers will shop on Amazon.in till the time they find a better customer experience elsewhere and we have invested tremendously in ensuring that customers have a great shopping experience with us this festive season too.”

    The company also has more than 120,000 sellers this year – compared to 40,000 a year ago – and has expanded its assisted shopping initiative to 100 cities in 14 states compared to three states a year ago, he said. Assisted shopping helps ecommerce retailers get small-town Indians, who may not be well versed in internet usage and shopping online.

    A Flipkart spokesperson said the company’s back-end teams, including engineering, supply chain, and customer support “are working round the clock to gear up for the expected spike over the next few weeks,” and that “sales are expected to grow significantly over the next one month, owing to the festive frenzy,” but without more details it is hard for an edgy investor community (or anyone, for that matter) to be reassured.

    Flipkart did not say how it has ramped up for this year, or how it would take on Amazon.

    “With our well-oiled backend and supply chain systems, we are fully prepared to process a billion wishes well in time through this event of the year,” Kalyan Krishnamurthy, head of category design organization at Flipkart, said in a statement.

    Down with the discounts

    discounts, shopping, sale

    Photo Credit : vasilyrosca / 123RF.

    Flipkart’s specific worries aside, this year is going to be a difficult show for ecommerce at large.

    Apart from monetary woes, the Indian government’s new policies of foreign direct investment are bound to make it harder for the companies to host sales at throwaway prices.

    The government now says that online marketplaces cannot interfere with pricing by the hosting companies. Obviously, there are ways to work around these legalities.

    To work with the law, vendors are being asked to participate more in discounting, as opposed to earlier when the ecommerce companies would absorb the discounts themselves. But more importantly, most of the business for Amazon and Flipkart come from their holding companies Cloudtail and WS Retail, which are their biggest vendors. That makes it easy for the ecommerce companies to work around the pricing pitfalls.

    Last year Cloudtail contributed to about 33 percent of Amazon’s overall sales, while WS Retail accounted for about 40 percent of Flipkart’s sales, eTailing India’s Ashish said.

    “They are moving away from these (to redistribute vendor dependency), but at least for this season it will still be from these holdings,” he said.

    This post Amazon and Flipkart go head to head next week. One has a lot to prove. appeared first on Tech in Asia.

  • 45259498 - silhouette group of zombie walking under full moon. halloween concept

    Image credit: leolintang / 123RF.

    It was 2014. Birchbox, the American startup that gave life to the subscription box business model, had raised US$60 million, valuing it at close to half a billion dollars. With over 800,000 subscribers at that point of time, Birchbox was the darling of both the beauty and tech world.

    For the uninitiated, Birchbox charges customers US$10 a month for a box of sample beauty products, which ideally inspires them to buy the full-sized equivalents over at its online store.

    Already, cracks were showing in the shiny veneer Birchbox presented to the media. Customers loved not knowing what they would receive in each month’s beautifully adorned box. The other side of the coin, however, was that they were being sent items which they didn’t love that much.

    Soon, the cracks gave way to a chasm of discontent. Despite subscribers indicating their preferences, mismatches continued to occur frequently, leading to situations like this:

    oh look 1 of my 5 birchbox samples is a shaving cream for varicose veins. Just what I need. Thx for ignoring the profile I spent 20 min on

    — Mary Elizabeth (@mary3lizabethH) July 1, 2016

    Fast forward to 2016, and the beauty box company has raised just US$15 million – a far cry from its previous funding round – amidst internal issues and the rise of strong competitors such as YouTube star Michelle Phan’s Ipsy and Sephora’s Play.

    Clearly, customers don’t only desire the “discovery” aspect of beauty boxes – they also want value for money. Even premium samples are just that – samples – and European competitor Glossybox managed to eat into some of Birchbox’s pie by throwing in some full-sized products.

    The situation in Asia

    Beauty box companies in Asia have a different set of obstacles. For example, Singaporean entrepreneur Douglas Gan arrived at a dead end with VanityTrove – which had been busy acquiring competitors across Vietnam, Thailand, and Taiwan – in 2015. As time went by, he noticed that it got harder to retain customers as they accumulated box after box.

    “The problem we faced was that the beauty industry [in Asia] is very niche. While the brands look very glam, they don’t have much marketing budget to help us sustain our growth,” he explains. Douglas ended up having to provide several other services such as helping brands organize workshops and engage influencers in order to keep the business going.

    Subsequently, VanityTrove pivoted to become a B2B marketing solution for beauty brands, and Douglas switched his focus to Vanitee, an Airbnb for local beauty services.

    glossybox beauty box

    Meanwhile, the story of South Korea’s Memebox unfolded almost in parallel to Birchbox. A Y Combinator participant, Memebox raised a total of US$29 million in 2015. Unlike its American counterpart, however, it went on to get another $66 million earlier this year.

    The difference might lie in the early realization that “customers wanted more than just samples,” Memebox’s vice president of strategy and operations Karl Loo tells Fashionista. Unlike Glossybox, however, the South Korean company decided to shift to a direct-to-consumer ecommerce model. As early as 2014, straight-up online retail accounted for over 70 percent of its revenue.

    Today, beauty boxes make up just one to two percent of Memebox’s total business.

    Mixing it up in Singapore

    Does this mean the subscription box business model is dead? On the contrary, many similar subscription services have emerged over the last couple of years in Singapore, focusing firmly on their respective niches.

    However, one thing they have in common is that subscription is only one part of their business model, and not the whole.

    Hook Coffee, for instance, is a speciality coffee subscription service that packs and sends whole beans, ground coffee, coffee drip bags, or coffee pods to its customers. Launched by a young couple in January 2016, it currently boasts 2,000 subscribers.

    One reason why Hook Coffee has been relatively successful is because coffee is a consumable and “habitual” product. Coffee drinkers will have at least one cup per day, which also means that a bag of coffee powder will run out quickly.

    Indeed, Hook Coffee co-founder Ernest Ting says that many of its customers subscribe because “coffee is something they cannot live without [and] a regular supply of fresh coffee to their doorstep is an amazing service [to them].”

    Hook Coffee isn’t a pure subscription service play – it also sells by the product. However, Ernest reveals that its subscription service is doing far better, making up roughly 80 percent of its revenue to date. It helps that its products are priced more competitively under subscription – S$14 per bag of coffee as opposed to S$18, for example – and there’s a running promotion for first-time customers.

    Still, it remains to be seen if Hook Coffee – or any other nascent subscription service – can perform equally well at scale. Douglas believes that it’s hard to do so in Singapore, or even Southeast Asia.

    Hook Coffee

    Image credit: Hook Coffee

    “At VanityTrove, we had enjoyed a very strong relationship with our fiercely loyal subscribers,” he recalls. “[However] you can only make that much money from a country with only five million people – that’s Singapore.”

    Even when VanityTrove scaled to seven countries in Southeast Asia with 22,000 subscribers and an annualized revenue of US$6 million, it simply wasn’t enough to compete against mainstream ecommerce businesses, Douglas adds.

    Ernest agrees that Hook Coffee has to eventually grow beyond a subscription business. In fact, the duo are working to grow its B2B clientele, and have stocked its Nespresso-compatible capsules in boutique hotels such as New Majestic Hotel, Wanderlust and 1929 by The Unlisted Collection, and Naumi Hotels.

    Not for Singapore

    “In the context of Singapore, I don’t think [the subscription service] is a very sustainable model in the long run, as Singaporeans are grazers in general,” Dean Chan, COO and co-founder of HotSoupDiet, tells me.

    When asked to elaborate, Dean says that Singaporeans are “grazers” because “food trends don’t last very long here, if at all.”

    “I think a good analogy would be sheep grazing a field – they eat the grass and move on, hardly ever looking back, constantly moving forward to new pastures,” he adds.

    hotsoupdiet

    HotSoupDiet is a healthy soup delivery service with a twist. It provides customers with three diet plans with different goals, and subsequently sends them five meals per week.

    According to Dean, the startup has been seeing consistent month-on-month growth of 10 to 20 percent since launching late last year. However, the feedback that he and his co-founder Ivan Lee have received is that customers really enjoyed the soups, “but they are not too bothered about the diet.”

    “They just want good, wholesome soups.”

    In other words, customers did not want to be bound by a subscription – they wanted more variety as opposed to a fixed meal plan.

    With this in mind, the co-founders launched a sister brand called Soops, which directly sells a range of soups.

    A short-term tactic

    For book store BooksActually, the subscription box is more of a “short-term revenue driver than a long-term business model.” As you might expect, it sends subscribers a book every month, chosen based on the curator you have selected on its website.

    Having started out as a brick-and-mortar bookstore 11 years ago, with an online retail shop for four of those years, founder Kenny Leck considers the BooksActually subscription box as “just another revenue stream complementing the many facets of our business.”

    “If a business is looking to do a subscription box, and hoping to make it their key revenue driver, I think that either speaks of the individual as not cut out for business or just a trend follower,” he adds.

    Strong words, but Kenny has the numbers to back up his statement:

    The BooksActually subscription box has gained just 170 subscribers.

    “There has got to be substantial volume, and there has to be a demand that is more of a need than a want. If I were to purely run a business based on subscription boxes, my projected numbers would be that you need at least 50 new subscribers every month (assuming the retail value for a three-month box is around S$120 to S$150).”

    “And even with this number, your business would likely be very small, operating from a home office.”

    The BooksActually subscription box has gained just 170 subscribers since launching in the last week of July, but Kenny isn’t very concerned. Ultimately, the greater aim is for BooksActually to “to own its commercial property […] something that we plan to achieve by the end of 2017.”

    At the end of the day, the standalone subscription box business model seems to be unsustainable in Southeast Asia. Profit margins are too small to attract investors, and without sizable amounts of funding such companies simply cannot scale. They are, however, a viable way to either test the market or complement the other components of a business.

    This post In Singapore, subscription boxes are neither dead nor alive appeared first on Tech in Asia.

  • Live by the sword, die by the sword.

    For years, Neiman Marcus thrived on the demand for haute couture featured in runway shows across the globe, from New York to Paris and Milan. But now the luxury department store says the quicker speed with which a hot runway item can go from hot to cold is to blame for its latest sales decline.

    The retailer reported that comparable sales, a metric that excludes newly opened or closed stores, fell 4.1% the fourth straight drop.

    “Today, fashion shows are now blogged and broadcast all over the world via social media,” said Karen Katz, Neiman Marcus Group CEO on a conference call with investors on Monday. “By the time the merchandise ships many months later, the newness and excitement had worn off and in many cases, the customer has moved on.”

    While this has been a boon for online luxury sites like Net-A-Porter, luxe department stores like Nordstrom, jwn , Macy’s m , Bloomingdale’s, and HBC’s hbc Saks Fifth Avenue each reported drops in sales at their main stores. (All of these retailers are doing better with their discount outlet stores.)

    As a result, Neiman is working to shorten its supply chain to better adapt to e-commerce, which already generates about 25% of sales online.

     

    The sales dip lessens the chances of Neiman, which is owned by private-equity firm Ares Management and Canada Pension Plan Investment Board, going public: last year, the Wall Street Journal reported the retailer was postponing its IPO due to a choppy stock market. But the company has since reported nothing but sales declines, making it much harder to fetch a valuation that will please its owners. And in the most recent quarter, Neiman’s overall loss widened to $407.2 million from $32.9 million in the prior year's quarter, largely because of $466.2 million in write downs from the loss in value of some goodwill, trade names and assets like real estate. Neiman filed for an IPO 13 months ago, an eternity for a stock issuance to be on the vine.

    Before it blamed poor sales on fashion bloggers, Neiman pointed the finger at Texas stores, where many of its clients depend on the fortunes of the oil industry. Tourists are also staying away in droves because of the strong U.S. dollar that is making shopping stateside prohibitive. That is particularly painful for a retailer that sees a lot of Brazilian tourists at its Florida stores and European tourists in the Northeast, including New York where it operates the Bergdorf Goodman store.

    “We experienced firsthand that a strong dollar keeps tourists away and negatively impacts the spending of those who do continue to travel,” Katz said on a conference call with analysts.

    For now, though, its not clear what will help Neiman break its worst spell since the Great Recession.

  • Americans appears to be going all in on Halloween this year.

    Over 171 million Americans plan to celebrate Halloween this year, spending an average of $82.93, forecasting a total spend of $8.4 billion on U.S. Halloween sales, which would amount to an all-time high, according to data provided by the National Retail Federation.

    Last year, U.S. consumers spent $6.9 billion on Halloween, which worked out to $74.34 per person; the previous high spend was in 2012 when U.S. shoppers spent $8 billion on the holiday.

    “After a long summer, families are excited to welcome the fall season celebrating Halloween,” NRF President and CEO Matthew Shay said. “Retailers are preparing for the day by offering a wide variety of options in costumes, decorations and candy, while being aggressive with their promotions to capture the most out of this shopping event.”

    According to the survey, which asked 6,791 U.S. consumers about their Halloween shopping plans from Sept. 6 through Sept. 13, shoppers plan to spend the most on Halloween costumes this year at $3.1 billion (purchased by 67 percent of all Halloween shoppers), but 94.3 percent of Halloween shoppers said they planned to purchase and dole out candy this year. But that will only account for $2.5 billion in Halloween sales. Seventy percent of Halloween shoppers said they also planned to purchase decorations, which will account for $2.4 billion in spending, and 35.4 percent plan to buy Halloween greeting cards ($390 million of total spending).

    Dishing out candy to trick-or-treaters will be the most popular form of Halloween celebration this year, at 71 percent, followed by decorating the yard/home at 49 percent, dressing in a costume at 47 percent, carving a pumpkin at 46 percent, going to/hosting a Halloween party at 34 percent, taking children trick-or-treating at 30 percent, visiting a haunted house at 21 percent and dressing their pets up in costume at 16 percent.

    The bulk of U.S. shoppers (44.4 percent) plan to start their Halloween shopping the first two weeks of October, while 29 percent plan to begin in September, 21.7 percent the last two weeks of October and 5 percent already began their Halloween shopping before September even started.

    Consumers will get their inspiration for Halloween costumes this year primarily online, at 35 percent, followed by when they are inside a brick-and-mortar store at 29 percent and 19 percent said they would get the idea from their family or friends; 28 percent of those surveyed said they didn’t plan to dress up this year for Halloween.

    Pinterest is the fastest-growing costume influencer on social media at 17 percent, but the social media site has seen 133 percent growth since 2012. Facebook influences about 17 percent of Halloween costume decisions, too. Pop culture is at 16 percent, and print media influences 14 percent of all costume decisions.

    Discount stores lead the way when it comes to Halloween shopping, as 47 percent of consumers said they planned to do their shopping for the holiday at one. Another 36 percent said they planned to visit a specialty Halloween-themed store (which was a 33 percent increase from last year), 26 percent of shoppers will get their Halloween goodies from the grocery store, 23 percent from a department store and only 22 percent of U.S. shoppers intend to do their Halloween shopping online this year.

    “Consumers are eager to celebrate Halloween, especially given that eight in 10 Americans will shop by mid-October. That is the highest we have seen in the survey history,” Prosper Insights Principal Analyst Pam Goodfellow told the National Retail Federation. “Americans will enjoy taking advantage of early-bird promotions, both online and in-store, as they kick off the fall season.”

  • A major shake-up is looming in the retail sector as the giant online retailer, Amazon, has its sights set on the Australia market with JB Hi-Fi and Gerry Harvey the ones with the most to fear.
  • xiaomi-america
    For years now, Xiaomi has been eyeing the US market. Many thought the company was about to take the plunge when it hired Hugo Barra, formerly Android product spokesperson at Google, back in 2013. But three years later, the company still has only a tiny presence in the US. And with growth not looking great on the home front, outsiders are increasingly wondering whether the US might be the answer to Xiaomi’s prayers.

    It might be, but not in the way many people are expecting.

    Why it won’t be smartphones

    Xiaomi is going to launch a smartphone in the US for the first time this fall (probably October). I’ve already written quite a bit about what it would take for Xiaomi to achieve success in the US smartphone market, and what that success might look like. But long story short, even in the most optimistic scenarios, it’s hard to imagine Xiaomi doing much more than carving out a small niche as an Android bit-player in the US. The demand for low-cost smartphones just isn’t that high, and even among consumers looking to cut costs, Xiaomi has no brand recognition and faces a lot of stiff competition (including from some of the same Chinese companies hurting its smartphone sales numbers back in China).

    Frankly, Xiaomi getting a big slice of the US market in the next few years is very unlikely.

    That’s not to say Xiaomi won’t make money selling phones in the US, but let’s put things into perspective: Apple and Samsung are the only companies that have double-digit shares of the US smartphone market, which they collectively control over 70 percent of. So even if Xiaomi was somehow able to fight its way into third place (which is pretty improbable), it would still be looking at less than a ten percent share of the US market. Ten percent of a US$55 billion market would be nothing to sneeze at, of course. But Xiaomi’s very unlikely to get to ten percent in the US anytime soon. Even four or five percent seems like a very optimistic short term goal.

    To understand what a Xiaomi success in the US might look like, it’s important to understand what the company has lost in China. Going by Statista numbers for overall market value, and comparing early 2015 and mid-2016 Xiaomi data, Xiaomi’s 12.5 percent share of the market in 2015 was worth about US$14.5 billion, whereas its 9.5 percent share of the 2016 market is worth about US$12.5 billion. So even if we don’t account for the fact that China’s smartphone market grew significantly over that time, Xiaomi would still need to grab more than US$2 billion (or about 4 percent) of the US smartphone market to make up for that hole. And frankly, Xiaomi getting that big a slice of the US market in the next few years is very unlikely.

    What else has Xiaomi got?

    Xiaomi drone from $380 to $450

    If smartphones aren’t going to save Xiaomi, then the company needs to look at what else it has in its arsenal. The good news is that there’s good news there… if the company can actually get itself up and running quickly in the US.

    Americans may not be particularly interested in low-cost smartphones, but many are interested in saving a bit of money when it comes to less essential gadgets like action cameras, drones, and smart home systems. Xiaomi already makes all of those things. They’re pretty good quality, and they cost less than what major players in the US are charging. This could be a major opportunity.

    The Yi camera’s biggest problem is that most of its American target demo has never heard of it.

    Consider, for example, the American action camera market. This is dominated by GoPro, a US$2.5 billion company. Xiaomi already has a competitor with its Yi 4K camera, which even Wired grudgingly admitted is “the better buy for most consumers” when compared with the equivalent GoPro. The Yi 4K is available in the US on Amazon, but it doesn’t have anything like GoPro’s presence. You’ll never find it in a retail store (whereas the GoPro and GoPro accessories are available in virtually every outdoor equipment and sports shop in the US). Heck, you won’t even find it in Xiaomi‘s US store. If Xiaomi could make the Yi camera more visible and up its marketing game in action sports circles, it’s not at all inconceivable that it might be able to take a significant chunk of GoPro’s market, as well as stealing away market share from the other minor players in the action cam market.

    Unlike its smartphones, which simply aren’t a good fit for the US market’s demands, the Yi camera’s biggest problem is simply that most of its American target demo has never even heard of it.

    (And yes, the Yi camera is actually produced by a separate company, not Xiaomi itself. It’s one of what Xiaomi calls its “ecosystem companies.” Xiaomi may need to lean heavily on these to grab up market share in the US, and it wouldn’t be unwise to acquire several of them wholesale).

    Xiaomi's Yi 4K action cam.

    Xiaomi’s Yi 4K action cam.

    Drones are another consumer gadget market where Xiaomi’s pricing might give it an advantage if it actually marketed its products in the US. The company recently launched a 4K camera drone that retails for around US$500 – way less than what you’d pay for a comparable drone like DJI’s Phantom 4. And again, Western tech reviewers have suggested the thing is actually pretty good. It’s not available in the US at all, but if it were, it would stand an excellent chance of grabbing a significant share of a rapidly-growing market.

    The smart home market is probably more of a long-term play, as Xiaomi’s current offerings aren’t all relevant to Americans. Its smart air filter, for example, may only cost US$100, but with relatively little pollution in most parts of the US, it’s hard to see many American consumers bothering with it. But the US smart home market is worth US$9 billion, and it’s expected to more than double by 2020. Many Americans are interested in smart home gadgets but have held off because of insular ecosystems and high device costs. Xiaomi could probably carve itself a nice niche in the market simply by offering, through its “ecosystem companies,” a broad swath of smart gadgets that work well together and that don’t cost an absolute fortune to install.

    Xiaomi’s Xiaoyi smart camera, for example, costs just US$22. Compare that to the mainstream Nest security cam in the US (which costs US$200 per camera) and it’s not difficult to see how Xiaomi could appeal to consumers who’d like to set up a home security system (for example) without having to take out a loan first. However, the Xiaoyi camera isn’t currently available in the US.

    TL;DR

    Xiaomi isn’t going to make up its China smartphone losses with US smartphone sales. But it could help make up the difference by grabbing up market share in several smart gadget sectors where (unlike in smartphones) many consumers may see its lower prices as a genuine selling point rather than just a sign of lower quality. To accomplish this, however, Xiaomi will need to make these gadgets much more easily available for purchase in the US, and it will have to put some real effort into marketing them so that American consumers actually know they exist.

    This post How Xiaomi can win in the US (hint: it’s not with phones) appeared first on Tech in Asia.

  • An injury reporting system designed to keep the public safe is now a target of retailers and toy manufacturers.
  • German discount supermarket Lidl is applying for trademarks covering hundreds of products, stirring speculation the retail giant is looking into opening in Australia.
  • Huawei Logo

    Huawei has been looking for an opportunity in India to set up its manufacturing facility and the day has finally come. Honouring the ‘Make in India’ initiative, Huawei will be starting production of smartphones in India from the first week of October.

    Singapore-based Flextronics International Ltd., an electronics major, has a plant in Chennai that rolls out a phone every 15 seconds. The Honor smartphone series will be the first to be produced in India and will subsequently go on sale from the next month onwards.

    Flex’s plant has an area of 645,000 sq. ft. and houses around 8,000 employees at once. Huawei will be collaborating with Flex to manufacture smartphones from the Chennai facility. The plant is expected to ramp up operations to three million units by the end of 2017.

    Android Authority adds that ,”Huawei will be strengthening its after sales services in India with over 200 service centers, including more than 30 exclusive Huawei service centers. The company is also looking at expanding its distribution network by partnering with more than 50,000 retail outlets by the end of 2016 to create a comprehensive, nationwide distribution system.”

    Other Chinese manufacturers like LeEco, Vivo, Lenovo, Oppo and Gionee has already either started manufacturing phones in India, or have reached out to the Government for domestic manufacturing plant approval.

    At the moment then smartphone makers are looking to invest in India because of the growing popularity of smartphones and the evergreen market here. However, none of these companies are looking to export smartphones from India to Africa and South-East Asian countries.

    Moreover, since the relaxation in local sourcing norms by the Government came into effect, Chinese manufacturers have shown an interest in setting up own retail stores. This way these companies would follow the omni-channel strategy of marketing and sales in India.

    For Indian smartphone enthusiasts and owners, we just hope the smartphones become cheaper now as the manufacturing shifts to India. The Chinese companies have pledged to maintain the same level of quality and this should encourage Indians to purchase smartphones ‘Made in India’.

    Source: AA

    Check These Related Articles!

    The post Huawei Ties up with Flextronics to Start Manufacturing Operations in India first appeared on Trak.in . Trak.in Mobile Apps: Android | iOS.

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