Xiaomi's True Intentions 'Courting' Korean Telecoms and Consumers

Xiaomi Targets South Korea Smartphone Market Share
Expands Online and MVNO Reach with Carrier-Free Devices
Leverages Home Appliances to Boost Smartphone Market Presence

[Asia Economy Reporter Han Jinju] Xiaomi has become the first foreign brand to launch a 5G smartphone in South Korea. The company held its first online briefing in the country to unveil new products and is actively courting mobile carriers.

On the 17th, Xiaomi will release the 'Mi 10 Lite 5G' in South Korea through open markets and subsidiaries of the three major mobile carriers' MVNOs. SK Telecom is selling it on T Direct, and KT and LG Uplus are reportedly negotiating to release it through their MVNO subsidiaries as well.

The Mi 10 Lite 5G is priced at 451,000 KRW. It costs half the price of the similarly spec'd LG Velvet (899,800 KRW) and is 100,000 KRW cheaper than the Galaxy A51 5G (572,000 KRW). The Mi 10 Lite features a 6.5-inch AMOLED display, Snapdragon 765+ chipset, and a quad camera with up to 48MP resolution. The battery capacity is 4160mAh.

The expansion of the mid-to-low-end smartphone market, which was previously dominated by flagship models in South Korea, presents an opportunity for Xiaomi. A representative example is the pre-order stock of 2,000 units of the Redmi Note 9S, which sold out within two days after its release in May. For domestic smartphone users, the hassle of purchasing through overseas direct imports and going through radio certification has been eliminated.

Steven Wang, Xiaomi's General Manager for East Asia, said, "The pre-sale of the Redmi Note 9S was very successful because it offered a flagship-level experience at an affordable price. I believe this trend will continue for the next few years."

Xiaomi is making great efforts to establish a presence with mobile carriers and domestic consumers. Previously offering only unlocked models, Xiaomi released the Mi 10 Lite 5G as a 'carrier-specific unlocked' model. This type of model can be used like an unlocked phone but comes pre-installed with the carrier's exclusive mobile apps, and the carrier's logo appears when turning the phone on or off. It is also possible to use SIM cards from other carriers, just like with unlocked smartphones.

It is expected to be difficult to find Xiaomi smartphones at offline retail stores for the time being. Negotiations with carriers are challenging, and there are no plans to operate separate stores. The main consumer base for Xiaomi smartphones is in their 30s and 40s, and the company has maintained an online-focused low-margin, high-volume sales strategy in China. Accordingly, Xiaomi is starting by lowering entry barriers such as after-sales service. They have partnered with SK Networks Service to implement a two-year smartphone after-sales service warranty program. This two-year warranty applies starting with the Redmi Note 9S.

An industry insider said, "Since this is the first 5G foreign phone released for carriers, it is significant. Although carriers still pay attention to domestic manufacturers, perceptions of Chinese phones are changing a lot."

Xiaomi assesses its position in the smartphone market as being in a 'transitional' phase. Globally, it ranks fourth in market share, mainly with mid-to-low-end products, and holds high shares in China, India, and Southeast Asia, but has low shares in South Korea, the US, and Japan. In particular, in South Korea, Xiaomi is well recognized for smartphone accessories like power banks and Mi Bands, as well as home appliances such as air purifiers and vacuum cleaners, but its smartphone preference and purchase share remain low.

An industry insider explained, "In other countries, smartphones are the main product sold, and consumers purchase ecosystem (home appliance) products linked to smartphones, but in South Korea, it is the opposite. Xiaomi has set a strategy to increase its smartphone sales share in South Korea starting this year."

This content was produced with the assistance of AI translation services.