Chinese smartphone vendor Xiaomi may be losing ground to bigger rival Huawei Technologies in its domestic market, but in western Europe it is catching up thanks to strong online marketing that cushioned the impact of coronavirus on its sales efforts there, according to the latest data from research firm Canalys.

Xiaomi now accounts for 10% of the market in western Europe after its smartphone shipments grew 79% year-on-year in the first quarter, the only major vendor to achieve positive growth amid countrywide lockdowns imposed to limit the spread of the pandemic, Canalys said.

The growth spurt saw Xiaomi jump to fourth spot in the region, behind third-place Huawei which currently holds an 18% market share in the region, down a few percentage points, after a 40% year-on-year decline in shipments.

“The impact on smartphone channels is colossal,” Canalys analyst Vincent Thielke said in the report. “Omni-channel retailers in strict lockdown regions, such as Europe, are doing their best to shift offline store stock into online distribution channels.”

Visitors look at Xiaomi MIX Alpha smartphones at a launch ceremony in Beijing last year. (Picture: EPA-EFE)

The acceleration to online shopping during lockdowns also boosted Xiaomi’s performance, according to Marta Pinto, research manager for the European mobile devices team at IDC. “The brand is expanding its own vendor stores and continues to build awareness through social media,” she said.

Canalys said Xiaomi’s first quarter smartphone shipments on a worldwide basis increased 9% year on year to 30.2 million units, bucking the global trend that saw total industry shipments fall 13% to 272 million units as dampened consumer sentiment and supply chain disruptions caused by the pandemic hurt sales.

Canalys added that “most smartphone companies expect Q2 to represent the peak of the coronavirus impact.”

“Few smartphone vendors were able to withstand the impact,” analyst Shengtao Jin said in the report. “Huawei was forced to juggle the dual impact of coronavirus and its ongoing US Entity List problems… Its overseas shipments plummeted 35% as it launched its first P series handset family without Google Mobile Services, the P40.”

Huawei, a leader in next generation 5G networks, is considered a national security threat by Washington, which has restricted the Chinese company’s access to US products and services, including semiconductors and Google’s apps like Gmail and YouTube. That has hampered its ability to sell smartphones to western consumers.

However, it is a different story in Huawei’s domestic market. The company was the only major Chinese smartphone vendor to achieve positive year-on-year growth in the first quarter, when overall industry sales plummeted 22% – the largest year-on-year decline on record – on the impact of the coronavirus.

Conversely, Xiaomi’s domestic smartphone shipments declined the most among the major players in the Chinese market, with a 35% year-on-year drop that saw its market share edge down from 11% in the first quarter last year to 9% in the same period this year.