CK Hutchison enters global alliance with Xiaomi

Hong Kong conglomerate CK Hutchison has entered an agreement with Chinese smartphone maker Xiaomi covering distribution of Xiaomi smartphones.

Under the agreement, CK Hutchison will bring Xiaomi smartphones, as well as IoT and lifestyle products, to its vast network of telecom and retail stores.

CK Hutchison’s 3 Group and AS Watson brands will be able to broaden their product range, while Xiaomi will benefit from a wider international presence.

The agreement will initially cover 3 Group’s stores in Hong Kong, Austria, Denmark, Ireland, Italy, Sweden in the UK and AS Watson stores in Hong Kong, Ireland, UK and the Netherlands.

Xiaomi also plans to extend its collaboration with CK Hutchison’s operator channels in European markets.

Recent research from Canalys estimates that Xiaomi had its strongest revenue growth in three years during the first quarter, with unit shipments growing 116% year-on-year to 28.1 million. More than half (nearly 57%) of these were shipped outside of China.

“Xiaomi has done a great job recovering its position in its home market,” said Canalys Senior Director Nicole Peng. “While China has been a growth engine and profit driver for Xiaomi’s rising service revenue, overseas market expansion has helped it boost market share, both of which will be critical to the success of its IPO,” Canalys senior director Nicole Peng said.

“It is important to note that Xiaomi’s rapid expansion will bring with it substantial overheads, which will make sustaining its original lightweight cost structure increasingly difficult.”