Qihoo, Xiaomi Take On The World
Two of China’s fastest rising tech stars are getting ready to take on the world, with word that security software specialist Qihoo 360 and trendy smartphone maker Xiaomi are both launching signature products outside their home market. Xiaomi’s formal move into Singapore marks the beginning of a broader global growth push, as the company looks to replicate its cool and trendy image and business model in both Asia and the west. Meantime, Qihoo is preparing to showcase its security software at one of the world’s top telecoms shows later this month, saying it wants to take the products global.
These 2 fast-rising tech firms will become China’s latest to test the global market, following a number of other expansions that have produced mostly poor results. Leading online search firm Baidu (Nasdaq: BIDU) and e-commerce leader Alibaba have both tried to expand into Japan with disappointing results, though PC maker Lenovo (HKEx: 992) has had a bit more success following some major acquisitions. The latest plan by Xiaomi looks relatively smart for its conservative approach, while I seriously doubt that anyone will show a serious interest in Qihoo’s security products that are popular but also quite controversial in its home market.
Let’s start this global expansion round-up with Xiaomi, which has given responsibilities for its worldwide drive to Hugo Barra, the former Google (Nasdaq: GOOG) executive who joined the Chinese smartphone maker last year in a high-profile defection. Xiaomi had hinted for a while that Singapore would be its first stop outside China, and now that plan is official with the announcement that it will start selling its third-generation model, the Mi3, in the market on March 7. (Chinese article) The model will sell for the equivalent of about $332.
Barra gave a lengthy interview in connection with the announcement, noting the launch would mark the first time Xiaomi has sold mass quantities of its signature phones with an English-based operating system. He noted the company is having to build up a new infrastructure to support the operation, including distribution and other logistical support. While Singapore marks the first official stop on Xiaomi’s global map, the company has already made semi-global moves by entering the Hong Kong and Taiwan markets, where its phones have been relatively well received.
We’ll have to watch closely to see how Xiaomi does in Singapore, but I do expect its savvy marketing should help it to find an audience there. If the launch goes well, I would expect them to try other Southeast Asian markets, and to possibly try North America as soon as the end of this year — a move that Barra previously hinted at with talk of a major distribution deal. (previous post)
From Xiaomi, let’s turn our attention quickly to Qihoo, which has announced it will debut some of its security software for the world at the Mobile World Congress that will run later this month in Barcelona. (company announcement) Qihoo doesn’t give much detail in its announcement, though it notes that the security products it is debuting are free, and that it will also showcase some other products as it eyes markets outside of China.
I can personally attest that Qihoo’s security products, and also its web browser, are extremely popular in China, largely because they are free. But the company’s products also have a reputation for being extremely intrusive, often loading unwanted software onto users’ computers and crowding out rival products. Chinese consumers have tolerated this kind of questionable behavior from Qihoo so far, largely because they like the fact that its products are free. Savvier western consumers are far less likely to embrace this kind of product, though price sensitive consumers in other developing markets could give the company a better reception.
Bottom line: Xiaomi is likely to do well with its first global move into Singapore, while western consumers are unlikely to embrace Qihoo’s free security products due to their invasive nature.
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