Xiaomi has already been struggling in the smartphone market with declining sales numbers and their recent crash out from the top five smartphone OEMs club worldwide. Today marks yet another disappointing news for the Chinese tech giant as after nearly a year of launch, they seem to be set withdrawing their business from Brazil, world’s fourth-largest smartphone market.
The major reason for the setback involves poor outcomes and inconsistent growth as mentioned by Hugo Barra, Xiaomi’s Brazil-born Global VP. Hugo refers the country as a strenuous market because of frustraneous online sales tax policies and manufacturing statutes. As a result, the company won’t be further launching any more products in the short term and will be partially shifting employees back to company’s Beijing headquarters. However, it will continue selling the already available Redmi 2 through some online e-commerce platforms. Additionally, to ensure reputation, they won’t be as of now, interfering with the logistics, finance divisions, customer and technical support situated in Brazil. This all, although, probably won’t last longer as their manufacturing line’s position housed at a Foxconn factory in Brazil is also currently uncertain.
Adding more on the situation, a spokesperson from Xiaomi stated “With the constant changes in manufacturing rules and tax regulations in Brazil since end 2015 and the fact that the rules are not yet solidified, Xiaomi has chosen not to launch any new products in Brazil in the short term. However, we are continuing to monitor the regulations and will plan new product releases at the appropriate time, We have decided to centralize our marketing and social media teams at the Beijing headquarters to continue coordinating related activities”. If you aren’t aware, the South American country itself is undergoing concerning economic and political crisis which has at some level led to Xiaomi’s departure. Secondary rationale behind this downfall is the fact that the company couldn’t provide shipments in time which resulted in the loss of customer interest.
Brazil’s smartphone sector is presently ruled by the Korean giant, Samsung followed by Motorola, LG, and Apple. The only China-origin brand to ever succeed in the competitive market is Alcatel that resides at the fifth location. Xiaomi will definitely have to rethink its strategy to spring back in the industry and not just in Brazil.
Update: The title of the article has been updated for accuracy.