Reborn multinational giant

The five reasons Fang Zhe gave in succession caused Lei and Xiaomi's executives to fall into contemplation. Although no one doubts Fang Zhe’s vision and authority, he is based on a democratic and practical attitude, from Lei to other Xiaomi executives. They still raised their doubts.

"President Fang, we chose India as a huge market for our first stop. I am afraid it is not so good. Moreover, the policies of various local states in India are chaotic, and the problem of corruption in eating and taking cards is very serious. It is not like a unified big market in China.

In the past, when our domestic companies expanded into the Indian market, they were basically in a quagmire due to various reasons. Our first stop was India, which might be very risky!"

The doubts of this Xiaomi executive have been recognized by most executives. Those present here are considered the elites of this industry. They are not ignorant of the Indian market environment. The reason why everyone does not support the first stop in India is that Because in the past, Chinese companies went overseas to India and there were few successful cases!

At this moment, Mr. Lei also said: “I also think it’s a bit too risky to choose India as the first stop. We should choose countries and markets with a higher success rate for the first stop we choose when we go overseas. If we dislike the overall market in Southeast Asia. Too divided, we can first choose the country with the largest market, Indonesia.

Indonesia has a population of more than 200 million and ranks fourth among the world’s population. Its per capita consumption level is lower than that in China, but it is much stronger than India. As long as the Indonesian market is opened, the relatively integrated market in Southeast Asia will be easily opened up. !"

Obviously, even if Fang Zhe gave five reasons, President Lei and Xiaomi executives still had doubts and negative attitudes about the first stop in India. Fang Zhe smiled and explained each of their doubts:

"The Indian market is indeed very fragmented and chaotic, and even the taxation policies of various local states are not uniform. This has also made it difficult for many large domestic and foreign companies to enter the Indian market, but one thing is very important. It has a completely different business model from these companies!

When other companies enter the Indian market, they basically rely on offline sales models. They need to open up channel dealers and sales chains in various local states. They have great demands on the local state’s policy environment, transportation and logistics.

And we don’t need to sign a contract with every local state government in India. We just choose to establish a branch in a certain city in India and sell mobile phones through online channels. In this way, the whole of India is for us. A unified market!"

The different business models mentioned by Fang Zhe are like a big deal, making many Xiaomi executives feel that perhaps entering the Indian market is really interesting!

As for the Indonesia mentioned by Mr. Lei, it is still denied by Fang Zhe with strong data:

“Last year, Indonesia’s mobile phone shipments were less than 40 million units, of which less than 7 million smartphones were shipped. Even if we can capture 30% of the market within a year, it’s only two to three million sales. The overall market growth is modest.

When we enter the overseas market, we must consider the size and growth potential of the market while considering the success rate. Now the overseas smartphone market is dominated by Korean brands such as Samsung and LG. In developed countries, we cannot enter temporarily due to patent policies and other issues. In India, the largest overseas developing country market, we must enter as soon as possible and accumulate experience.

Just like the domestic market, a difference of one or two years in the big market is a difference of tens of millions of mobile phone sales, while in a small market, it is nothing more than a gap of several million!"

Fang Zhe’s remarks caused President Lei and Xiaomi executives to fall into contemplation. Both President Lei and other Xiaomi executives paid too much attention to the success rate of the first stop to open up overseas markets. This is also a matter of Chinese traditional concepts and morale. Pay attention to a good start!

But according to Fang Zhe’s thinking, the Indian market is a big market that will enter sooner or later. If you step in early, you can seize many opportunities early. Whether it is success or failure, experience is the most important!

Besides, as a rebirth, how could Fang Zhe fight an uncertain battle?

In the past, Xiaomi achieved brilliant results in India, even surpassing the old giant Samsung to become the number one smartphone brand in the Indian market. The competitiveness of Xiaomi's products in the Indian market is evident!

Under Fang Zhe’s persuasion and the prestige established in the past, Lei and Xiaomi finally chose to follow Fang Zhe’s advice and chose India as the first stop for Xiaomi’s overseas expansion.

Of course, for the sake of safety, in addition to India, several countries including Indonesia, Russia, Vietnam and Thailand are also included in the options.

Mr. Fang Zhe and Mr. Lei went to India in person to investigate the difficulty of opening up the Indian market and the investment environment. If the situation is really unsatisfactory, Xiaomi can only choose alternative countries as the first stop to go overseas.

On the afternoon of October 12, New Delhi time, the plane boarded by Fang Zilei and his party landed at Bangalore International Airport in the southern city of India.

Bangalore is the industrial and commercial center of southern India, as well as the high-tech center of India. It is the fifth largest city in India and its status in India is equivalent to the domestic Shenzhen market.

Bangalore has the most developed IT information industry in India and even in Asia. It is more developed in some respects than the Shenzhen market in China, and is known as the "Silicon Valley of Asia."

Because of this, Bangalore has the largest number of IT professionals in India. If you ask Xiaomi where it is easiest to open the market, then there is no doubt that this place is the capital of Indian farmers who like to pursue mobile phone performance and cost-effectiveness, Bangalore. !

The reason why Fang Zhe and others chose Bangalore as the first stop of their trip to India, instead of New Delhi, Mumbai and other larger and more prestigious cities in India, is to investigate the market environment and investment environment here.

Long before Fang Zhe, Lei and others came to India, Xiaomi’s newly established International Marketing Department has already united with a number of information consulting companies such as International and India to conduct research on major Indian cities such as New Delhi, Mumbai, Bangalore and the entire Indian mobile phone market. Detailed market research.

Now Mr. Fang Zhe and Mr. Lei come in person, one is to personally touch the market environment, and the other is to prepare for the establishment of an Indian branch and discuss investment cooperation matters with the local government.

For mobile phone manufacturing companies like Xiaomi, it is almost necessary to enter the market of a certain country on a large scale, invest in local factories, negotiate preferential policies and conditions with the local government, etc. Otherwise, whether it is import tariff costs or tax costs, etc. , Will greatly reduce the competitiveness and profit of Xiaomi mobile phones!