The arrival of a Chinese technology behemoth in the country was halted by the shrinking import supplies and the lack of funds. The third-largest cell phone manufacturer in the world, Xiaomi, announced this year that it would begin production in Tierra del Fuego and open its first physical location. Plans have been put on hold because “things became extremely difficult,” lament brand-related insiders.
There were considerable hopes raised by Xiaomi’s entry. The local market is highly concentrated, which is the cause. More than 90% of all cell phone sales are made up of two brands: Samsung and Motorola. Samsung is the market leader globally, according to consulting firm Counterpoint, with a 19 percent share. Apple (17%) and Xiaomi are in second place behind the Korean brand (14 percent ). The second-best-selling company in Latin America is Motorola, part of the Chinese conglomerate Lenovo (26 percent of sales in the region).
The import barriers completely altered the situation. I was about to finalize a transaction with Solnik from the Etercore group at the time that Xiaomi was looking for a local partner to assemble in the nation. Additionally, he bargained with BGH, another Fuegian producer. Prior to the formal landing, Solnik launched their first Xiaomi Store in April in the Abasto shopping area, where they sell the whole range of imported goods, including smartphones, 4K televisions, scooters, scales, and shavers. They said, “We have supply for 45 to 60 days in most areas.”
According to what happened, the business will stay open and the intentions to make cellphones have been put on hold until we can see “how the measures evolve”. That is, if the requirements for component entry into the nation are loosened. Due to a shortage of foreign currency, the Central Bank mandated two weeks ago that businesses may import up to 5% more than they did in 2021. Additionally, individuals that go above the cap must find their own financing for 180 days.
The electronics industry faced new challenges as a result of the import ban’s tightening. It didn’t just delay Xiaomi’s intentions to produce in Argentina. Additionally, it affected Motorola, whose license is held by the Newsan group, and the continuous operations of Samsung, its local ally Mirgor, and Samsung. “In actuality, we are working with the parent firm to find a solution to the 6-month loan issue. Given that it pertains to upcoming product shipments, it is fairly complicated “In the sector, they are clear.
The local representatives of the brands and manufacturers participate in a number of talks that take place concurrently. Even though Mirgor and Newsan have the benefit of extended credit records, each has their own strategy. “The promise of growing sales volume was created with regard to remittances sent overseas after 180 days. It is a means of demonstrating Argentina’s strength as a market “a source with knowledge of the talks stated.
The crisis presents a fresh challenge for introducing new brands to the fiercely competitive cell phone market. Chinese companies have long talked of challenging Motorola and Samsung’s hegemony in the area. The first was Xiaomi, which opened its own stores in the area as part of its expansion strategy in 2019. It has quickly risen to become Latin America’s third best-selling product. Through Solnik, its sole representative in Argentina, which exclusively imports equipment directly, Xiaomi had a demonstrative presence there. The business, which operates a facility in Tierra del Fuego, also has a license from Nokia.