Barra believes that Brazilians will change the way they buy phones though, and implies that’ll partly be because of Xiaomi’s presence. “By the end of this year, depending on who you ask, probably one out of every five phones sold in Brazil will be sold online. This is a similar number already happening in India where between 20% and 25% of smartphone sales are happening online. I think we had something to do this with this acceleration since entering the market last summer. Things will evolve. People will buy online.” […]
Brazil’s smartphone market is about half the size of India’s but it’s the fourth-fastest growing market in the world, meaning success here could make a meaningful impact on Xiaomi’s global sales. Barra concedes that Brazil is a challenging and “very competitive” market, and one where Samsung controls half of all smartphone shipments. But Xiaomi’s big selling point is its price. At $160 the Redmi 2 is half the price of comparable phones by the company’s local competitors in Brazil.
Xiaomi prefers online distribution; it helps Xiaomi deliver a lower price to consumers. Brazil is a good market for Xiaomi to try and replicate its online distribution success: it has high demand for smartphones, plenty of consumers that can access the Internet and pay for goods online, and a reasonable number that actually do. Now, Xioami may well end up using both on-line and retail channels, as it has in India. But the odds are also high that it helps shift a meaningful amount of demand to online channels.