Xiaomi is climbing another Mountain, but strategically and in other terms, with success. Not looking backwards, against all odds and speculations, Xiaomi entered U.A.E. Market in 2016.
It was obvious, seeing the Demographics of U.A.E., where more than 50 % of the population comes from the markets where Xiaomi is already established, yes, thats right, Asian Markets, mainly India, China, Pakistan, japan, Philippines, Sri lanka, Bangladesh, Indonesia.
Just to note, Apple has seen a growth of 133 % in Middle East Region. In the Middle East, Android currently represents 80% of market’s volume, while iOS accounts for 17%; in Africa, these figures stand at 89% and 7%, respectively. Android is particularly dominant in the low to mid-priced bands, while iOS is mainly found in the $450+ price category.
U.A.E. Market Scenario
If we have a close look at Demographics of U.A.E., you will be surprised to know the Expat population, Indians ( 27.15 % ), Pakistan ( 12.53 % ), Bangladesh ( 7.3 % ), Philippines ( 6.2 % ) , Nepal ( 3.1 % ), China ( 2 % ) and rest from other Middle East and European countries. U.A.E. is one of the key markets with high Disposable Income, you can see even a Cab Driver wearing a RADO / Fossil. Purchasing a Premium Smartphone is not at all a big Deal in U.A.E. Market. Rather its that market where Users love to carry Multiple Phones just to show off. I have seen Arabic guys carrying 4-5 Phones even. I personally used to carry two Smartphones. One with Pre-paid, One Post-Paid.
U.A.E. Market is very much fragmented, but users are moving to Carrier based schemes. As its gives access to Premium smartphones at affordable monthly schemes, which include call and Data. I still remember getting my first iPhone 4 – 64GB at a very affordable price, I think hardly 256 Dhirams for two years contact, which gave me Calls and 2GB Data free.
U.A.E. Retail market is dominated by Jumbo, C4, Lulu and Axiom Telecom ( operates two chains Axiom for Premium and Arabic customers, Fono for low end smartphones ).
If we see Traditional market, We have 3 key markets in Dubai Deira, Bur Dubai and Satwa. Deira ( Gargash Center , Naseer Square ) again dominated by Arabics, Bur Dubai – Indians, Satwa is mix of Indians, Iranians, Philippines and Pakistanis.
Another key market for Chinese Smartphones and goods is, Dragon Mart. Dragon Mart is dominated by Philippines and Local Arabic population. This is the door for Chinese goods. With over 200 shops, Dragon Mart is the biggest Chinese market.
Another two key markets for Smartphones are Sharjah and Abu Dhabi. Both these are Traditional markets. Penetrating in all the above markets for a new Brand is a Hill Task.
Xiaomi adopted a much better way, went through Etisalat. This is the easiest gate way to capture the U.A.E. Market.
Advantages of Tie-Up with Etisalat
U.A.E biggest Telecom operator, based at Abu Dhabi. With over 11.6 Million users across U.A.E, Xiaomi gets instant access of all the customers. Fact about U.A.E. Market, Though Du is another operator based at Dubai, but still have not earned the reputation like Etisalat.
Etisalat is based at 17 countries, and the fact is, Etisalat is one of the early adoptars of 4G. I still remember in 2010, When 3G concept was still picking up, Etisalat was fighting with Vodafone Egypt over 3.5 and 3.75G ( It’s a fact ).
If Xiaomi cracks the way through Etisalat, the instant access is 17 countries across MEA Region. If it happens, Xiaomi may get penetration through Vodafone and Zain also, another key operator in MEA Region.
Xiaomi Product Range for MENA Region :
- Mi Note
- Mi 4i
- Redmi 2
- Redmi Note 2
- Mi Band
- Mi Powerbank 10000 mAh
Free Zones in Dubai
U.A.E. Internal consumption may be low, but Dubai is considered as gateway to Rest of Middle East and African countries. Two free zones viz Airport Free Zone ( DAFZA ) and Jebal Ali free zone ( JAFZA ) are the biggest advantages of U.A.E. Market. Good pint is when you move the goods from JAFZA to DAFZA or other way, you are not supposed to pay any Taxes.
Even the taxation is way too cheap, hardly 5 % if you bring the goods inside Dubai. This is where Dubai makes the most of the money. These two zones are heaven for Traders, as most of Logistics companies offer lot of servies, like, warehousing and transportation.
About TASK FZCO – Distributor of Xiaomi
TASK FZCO is a private company, based in Dubai, UAE. TASK is the Authorized Distribution Partner for Xiaomi covering the Middle East region. TASK has started operations in: UAE, Saudi Arabia, Qatar, Oman, Kuwait, Egypt, Iran, Jordan, Lebanon, Bahrain, Morocco, and Algeria.
TASK has already started hiring persons for Saudi Arabia and Iran, which means Xiaomi next Target is Saudi and Iran Markets.
Saudi Arabia is famous for Premium Smartphones. While on other side, Iran is famous for Designer Phones ( Motorola RAZR was a big time success in Iran ). Again, Saudi and Iranian markets are dominated by Traditional Channels.
During my visit to Iran and Saudi Markets, I noticed users do not bother much about money. Purchasing smartphones is instant call. Like it, Take it. But yes, what they love is ” Free Gifts “.
For Iran, Style matters a lot. You will be surprised to see colorful phones, Elegant Stylish Covers.
Way forward for Xiaomi
With the success in U.A.E. Market, another big markets are wide open Like Iran, Egypt, Turkey, Nigeria, Kenya ( with Airtel and Safaricom ) , Oman, Turkey, South Africa, and much more. I will rather define it as Lower Gulf, Levant, East Africa, South Africa and West Africa.
Arabic speaking Africa should be the key market again which includes one of the Biggest Market Like Egypt. If Xiaomi can capture 10 million Markets of MEA Region, there is no looking back for Xiaomi as Global Brand. Right time for Xiaomi to prepare for ” GITEX”.
10 Million markets
- Saudi Arabia
- South Africa
The key pan-African players in the market are Vodacom/Vodafone, MTN, France Telecom, Airtel and Millicom, with Orascom, Warid and Etislat playing lesser roles.
The key aim of Xiaomi should be Africa Market, Why ?
Africa is one of the first continents when first-hand users are testing the internet, phone-first. That’s pretty new, which makes Africa the biggest continent for smartphones – bigger than China, bigger than India. Around 70 % of the African population will be using smartphones by 2020, while 90 % will be covered by mobile broadband networks, as compared to hardly 20 % penetration as of now.
Nigeria and South Africa contributed significantly to the overall growth seen in Africa, with the countries experiencing year-on-year growth of 135% and 56%, respectively. Nigeria accounted for 14% of all smartphone shipments across the continent during 2015, while South Africa was responsible for 12%.
Brand wise : Samsung, Apple, and Huawei made up the top three smartphone vendors in the Middle East, together accounting for over 65% share of the market.
In terms of screen sizes, the market appears to be consolidating within the 4″–5.5″ range. For the Middle East, 78% of all smartphone shipments in 2015 fell into this bracket.
*To be edited further with Data