Will China’s Xiaomi make it in the US and Europe?

Chinese smartphone giant, Xiaomi, is set to open its doors to U.S. and European consumers shortly, putting Western manufacturers under greater pressure from its low prices.

Xiaomi will launch a trial of its online "Mi Store" to Westerners from Monday, offering a limited supply of accessories, including headphones and fitness trackers—in what could be argued as a prelude to selling phones.

Customers should be drawn in by its prices, starting as low as $9.99 for a battery cell (5000mAh Mi Power Bank), while the Mi Band costs $14.99, a fraction of the price of rival fitness trackers found on U.S. sites.

Mi.com will start off shipping to the U.S., Germany, France and the U.K.

People in the U.S. can start ordering from Mi.com from 10 p.m. ET (7 p.m. Pacific time) on Monday. Those in the U.K., France and Germany can start ordering on Tuesday from 7 a.m. ET (12 p.m. BST).


Xiaomi headquarters in Beijing, China
Edmond Lococo | Bloomberg | Getty Images
Xiaomi headquarters in Beijing, China

Peter Thal Larsen, Asia editor for Reuters Breakingviews, told CNBC Monday, that while Xiaomi was "incredibly strong" in China, entering more developed markets outside of Asia could prove more challenging.

"They have a particular business model, which basically involves producing phones which look a lot like phones produced on the market, but cost less, creating demand by having online flash sales and not spending a lot of money on marketing or on retailing," Thal Larsen said.

"That might work somewhere else. I mean they're trying very hard at the moment to push it into India."

However, he said this model might gain less traction in the U.S. and Europe, as these markets were "more competitive" and people had "higher expectations."

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Competition was not Xiaomi's only obstacle either, Thal Larsen added.

"If Xiaomi starts trying to operate in those markets, it's more likely that some of their more established competitors in the West might seek to also pursue them for intellectual property purposes. You may see some patent lawsuits," Thal Larsen told CNBC.

He added that Xiaomi's "cautious" strategy in breaking into Western markets might be down to the threat of patent lawsuits.

Xiaomi's Western-orientated online store is already available to view, ahead of the launch.

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