Reorganisation at Xiaomi: Lei Jun resigns from his position

Co-founder and Chairman of Xiaomi, Xiaomi CEO has resigned as the company's chairman in China, according to internal company correspondence. Following Xiaomi's reorganisation in May (when he took over as Chinese president Xiaomi CEO), participation in the smartphone market has steadily declined.

Why is this important?

Xiaomi is trying to improve its leadership and guidelines. This change will affect up to 7 managers in the company.

Shipments of smartphones from the Beijing-based Chinese company fell by 20% in the second quarter and 33% in the third quarter, with a 9% drop in market share over the six-month period, market research firm Canalys reports.

Xiaomi's disappointing performance in the Chinese market has come at a time when rival Huawei has stepped up its sales in China to compensate for weakening international sales caused by the US export ban. Huawei gained a record 42% market share in China in the third quarter

Details of the new positions

• Lu Weibing, the former brand manager of the Redmi brand, has been appointed to replace Lei Jun as president of Xiaomi's China region, the Chinese financial daily Time Weekly reported on Sunday.
• Wang Xiang, who previously headed the company's international business, has been appointed chairman of the company, while former chairman Lin Bin has been appointed vice chairman of the board, according to a letter signed by Lei Jun.
• Former CFO Shou Zi Chew manages the company's overseas business. Co-founder Li Wanqiang, who was previously Xiaomi's marketing and brand strategist, has stepped down. Vice President Qi Yan has retired. According to the letter, both will now serve in advisory roles.
• Lei Jun has retained the chairmanship of the company and will continue in his current role as CEO.

History

These staff replacements took effect from Friday last week (29 November). Xiaomi reported annual growth of 5.51Tp 3T (year-on-year) in its third quarterly report last week, the slowest since the company's listing on the Hong Kong stock exchange in July 2018. The modest increase in profits was partly due to a decline in smartphone sales, which fell by 8% during the quarter.

Despite the downturn in the Chinese market, Xiaomi's international business remains strong, particularly in Europe, where the company's smartphone sales grew by 73% in the third quarter compared to the same period last year. It is expected that the change of headquarters and decision will allow the company to improve its results in the short term.

What does the future hold?

Let's not forget that in 2020 Xiami is very much gearing up for the 5G era, with dozens of 5G-capable Mi and Redmi models and (AIoT devices) expected to be released. Next year, they will also focus more on the European market, as indicated by the growing number of official stores in Hungary, as well as the official Hungarian representation and the presence of Hungarian operators.