Caixin
Dec 02, 2019 08:29 PM
BUSINESS & TECH

Xiaomi Reshuffles Top Management as China Market Share Shrinks

Chinese smartphone giant Xiaomi Corp. has reshuffled its management team, the company announced in a letter to employees on Friday.

Xiaomi co-founder and CEO Lei Jun announced he will hand over the reins of president of the China region to Lu Weibing, who will also remain general manager of Xiaomi’s lower-end Redmi brand.

The appointment comes just seven months after Lei took the position. Lu is charged with reversing Xiaomi’s sluggish smartphone sales in China. Xiaomi’s domestic sales fell 30.5% year-on-year in the third quarter, with the company’s market share dropping to 9.8%, according to industry tracker IDC.

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Other role changes include Lin Bin’s promotion to vice chairman from president of the company’s smartphone division and current Chief Financial Officer Chew Shou Zi’s appointment as president of the company’s international market. The company has set up a committee to hire a new CFO; Shou will continue as CFO until a replacement is found.

Xiaomi’s share of the Chinese market has been encroached upon by rival Huawei Technologies Co. Ltd., which has shifted focus back home after facing setbacks overseas due to U.S. sanctions that cut its phones’ access to Google software. Huawei grew its market share to 42% in the third quarter with shipments of 41.5 million units, a 64.6% increase. All other Chinese smartphone manufacturers saw their shares of the domestic market decline.

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Lu joined Xiaomi early this year after working at once-prominent Chinese handset-maker Gionee from 2010 to 2017. Lu was known for role in offline distribution at Gionee. CEO Lei is counting on Lu’s experience from Gionee to help Xiaomi increase offline sales, an inside company source speaking on condition of anonymity told Caixin.

Since taking lead of the China market in May, Lei has plowed resources into ramping up Xiaomi’s offline distribution, including a 5 billion yuan investment to establish brick-and-mortar stores. Now that he has “built a framework for the China market,” the insider says, Lei hopes Lu will help Xiaomi build a strong offline presence after beginning its life selling exclusively online.

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Xiaomi had 586 direct-sale stores and 1,378 franchise stores across China at the end of 2018, according to the company’s financial report. In 2016, Huawei said it had 35,000 brick-and-mortar stores, including 11,000 in China.

Contact reporter Mo Yelin (yelinmo@caixin.com)

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