Xiaomi is doubling down on its smartphone premiumization strategy as it adapts to evolving market dynamics in China and abroad, company executives said during its first-quarter 2025 earnings call held on May 27, 2025. While total smartphone market growth this year is expected to trail earlier expectations, the company is prioritizing a refined product mix over volume expansion, focusing on higher-margin mid- to high-end models.
Premium gains in China drive strategic shift
In China, Xiaomi's leadership noted that national subsidy programs have provided limited uplift to smartphone demand, which remains weaker than initially forecast. Despite this, Xiaomi's share of the domestic high-end smartphone market rose to 25% in the first quarter, up from 22% in the same period last year. For devices priced between CNY4,000 and CNY5,000 (US$555-694), Xiaomi now holds a leading 24.4% market share. This reflects the company's strategic effort to climb the value chain and strengthen its position in premium categories.
Alian Lam Sai Wai, Xiaomi's CFO, confirmed these gains: "In this quarter, in China, Xiaomi's high-end smartphone market share reached 25%. Last year, for the entire year, it was 23.3%, and in the first quarter of last year, it stood at 22%. Therefore, the shipment volume is also increasing steadily in the high-end smartphone market segment. For smartphones priced at CNY4,000-5,000, Xiaomi holds a market share of 24.4%, ranking number one."
Xiaomi's premiumization efforts have largely been driven by the unified Xiaomi brand, which the company believes enhances customer loyalty and broadens the appeal of advanced products across its portfolio. The firm continues to roll out premium devices across categories, including high-end tablets and air conditioners, with plans to expand its reach internationally. Executives emphasized the importance of methodical execution in growing share in the over-CNY6,000 smartphone segment, where Xiaomi currently holds just 5%.
Emerging markets show potential despite short-term hurdles
Rather than compete in every market, Xiaomi is streamlining its global smartphone operations by pulling out of lower-return regions such as Japan and narrowing its focus to others like Europe. While European demand may remain flat or slightly negative this year, Xiaomi plans to improve profitability by withdrawing low-end products and focusing on higher-tier devices. The company targets premium segments in Hong Kong as it realigns regional priorities.
In Africa, Xiaomi is pursuing expansion with an ambitious goal to raise its market share from roughly 13% to 20%. Despite an overall market contraction, the company is increasing its focus on mid-range and higher-end smartphones in the region, moving away from ultra-low-cost products. Executives believe this shift in product mix better positions Xiaomi to benefit from long-term growth and brand loyalty in emerging markets.
India challenges prompt strategic pullback
In India, Xiaomi continues to face unresolved challenges, including difficulties in obtaining business visas and other regulatory constraints. As a result, the company has reduced its exposure in the market and described the resulting decline in market share as an acceptable tradeoff given current risks. The move aligns with a broader risk-control strategy as Xiaomi reallocates resources to markets with more favorable conditions.
"I think the decline in India is reasonable. Today, for the Indian market, it is quite special. There are still issues that have yet to be resolved, and a normal business visa with India has not yet been normalized. So, for the Indian market, we wanted to lower risk in this market," said Xiaomi president Weibing Lu.
The company's premium push is already showing results beyond smartphones. In its home appliance segment, revenue rose 113% year-over-year in the first quarter, outpacing a 65% growth in unit shipments. This indicates strong momentum in average selling prices, reinforcing Xiaomi's broader goal of elevating its brand positioning across product categories.
Article edited by Jerry Chen
