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Xiaomi's Barra leaves phonemaker to return to Silicon Valley

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Xiaomi Corp's international chief Hugo Barra has quit after a turbulent four years during which the Chinese smartphone maker rose to the top of its home market before local rivals mimicked its model and dethroned the brand.

[BEIJING] Xiaomi Corp's international chief Hugo Barra has quit after a turbulent four years during which the Chinese smartphone maker rose to the top of its home market before local rivals mimicked its model and dethroned the brand.

The former Google executive is returning to Silicon Valley after being hired with much fanfare in 2013 to be Xiaomi's global face, becoming a fixture on the conference circuit and the up-and coming vendor's main pitchman to foreign audiences.

In a Facebook post Monday, Mr Barra said it was time for him to return home to embark "on a new adventure", without elaborating. Senior Vice President Xiang Wang will oversee global operations after Mr Barra departs in February, after the Lunar New Year holidays.

Mr Barra was given the task of taking Xiaomi global, helping the company make inroads into India, where sales topped US$1 billion for the first time in 2016. During his tenure, it briefly became China's biggest smartphone vendor by packing high-end components into inexpensive devices and building a vibrant online community of users. But local brands such as Oppo, Vivo and Huawei Technologies Co rapidly copied its moves and developed more innovative competitive tactics.

"Hugo was a key figure for Xiaomi in the early days because he helped overseas marketing," said Kitty Fok, managing director of IDC China. Mr Barra's departure is likely to have limited impact because Xiaomi's position in India has stabilised and the task has shifted to growing market share, said Ms Fok.

His exit may indicate that Xiaomi is re-focusing on its home market, said Nicole Peng, an analyst at Canalys. Mr Barra will be departing Beijing - a city infamous for hazardous air pollution - just as Xiaomi is struggling to find its footing at home. 

"What I've realised is that the last few years of living in such a singular environment have taken a huge toll on my life and started affecting my health," Mr Barra wrote in his post.

"Seeing how much I've left behind these past few years, it is clear to me that the time has come to return."

Xiaomi was last valued at US$45 billion in 2014, making it one of the world's largest startups. It drew comparisons to Apple Inc after doubling revenue that year and climbing to the top of the Chinese smartphone market. It's since struggled, missing its 2015 shipments target and falling behind Oppo and Huawei. The company is aiming for 100 billion yuan (S$20.76 billion) in revenue this year - the same target it had set as far back as 2015.

Since that valuation in 2014, analysts have questioned its price tag given a sliding market position. In a memo posted on his WeChat account, billionaire co-founder Lei Jun said his company had tried to grow too rapidly in past years and missed opportunities.

It's had more success in India, where it grew shipments 150 per cent last year. Chinese brands account for 51 per cent of India's smartphone shipments in November, according to Counterpoint Research. Xiaomi is now counting on the country to drive its next phase of growth: it already assembles over three-quarters of its Indian smartphones in the country under the government's "Make in India" program.

Yet despite that success, Xiaomi's most important market by far remains its home country, where it may be preparing a comeback.

"Xiaomi realised the Chinese smartphone market will be their top priority," Ms Peng said.

"India was the only shining point for Xiaomi's overseas expansion over the years, and entering the US market will not be easy because the market is strongly held by Apple and Samsung."

Xiaomi secured US$1.1 billion in 2014 from investors including GIC Pte Ltd, All-Stars Investment Ltd and DST. Executives have since said repeatedly that it isn't on the hunt for financing, while deflecting speculation about an initial public offering.

Apart from phones, the company also sells other types of electronic gadgets and appliances, from air purifiers to robot vacuums, made by what it calls its ecosystem-partners. Sales through such manufacturing and branding partners exceeded 15 billion yuan in 2016, Mr Lei has said.

"As much as we would love to have Hugo stay with us in Beijing for a much longer time, we understand his personal challenges and wish him all the best in his future endeavours," co-founder Lin Bin wrote in a comment on Mr Barra's Facebook post.


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