Xiaomi logo_33

International Expansion For Chinese Manufacturers Is Not As Easy As It Seems

December 12, 2014 - Written By Nick Sutrich

The past couple of years has seen a massive growth in the number of manufacturers out there in smartphone land. While the big dogs still sat on their throne and didn’t seem to be too phased by the change in the industry in 2013, 2014 was a completely different story. Chinese manufacturers that started around 2011 like Xiaomi have grown exponentially in 2014 and have gone from the ranks of a small startup manufacturer to one of the world’s largest manufacturers in basically a year’s time span. Other manufacturers like Meizu, OnePlus, Huawei and ZTE have jumped the ranks of mere small startups too, pushing wide ranges of products that cover the spectrum from super affordable to high-quality premium devices. All of these products have a common thread too: they are cheaper than the big dogs yet still offer most or all of the same features and build quality.

This has been the hallmark of Chinese manufacturers over the past year and something that’s been transforming the industry. Many of these phones like the Xiaomi Mi4 or the OnePlus One offer every single spec identical to other high-end phones yet cost half the price or less, bringing high quality phones to a whole new set of customers who previously couldn’t afford or didn’t want to spend that much money on a phone. While competition is fierce in China and sales have reached all time highs, international sales are taking a bit of a beating because of distribution channels. Not only that but patents and other forms of litigation are stopping Chinese manufacturers from making the same huge numbers of sales outside of their home country. Xiaomi has been cut off from selling in India for the time being because of litigation from Ericsson, and this would likely continue in other countries as they expand as well.

There’s not only litigation to deal with, there’s also mind share and negative attitudes towards Chinese manufacturers in general. We’ve been reviewing a lot of big Chinese phones lately and pretty much all of them are excellent quality like the Xiaomi Mi4 or the Meizu MX4 Pro, but overall many still tend to think of cheap knockoffs when they think of goods from China. It’s this sort of mind-share hurdle that Chinese manufacturers are going to have to get over, and one that won’t be easily done whilst their phones tend to look more like an iPhone clone than an original design. 2015 will mark a big year for Xiaomi and Meizu in particular as they work to expand outside of China and into the international market, and OnePlus will get a shot at redemption internationally with their second phone likely halfway through 2015 or so. Lenovo’s strategy of buying Motorola and selling their phones in under served markets may end up proving the winner in the end, but time will tell who plays catch up first.