To the majority of people in the Western world, Xiaomi (小米) is just another China electronics brand, producing cheap smartphones such as the RedMi Note. Being from China, most of these people consider their products as inferior in quality, and copying designs of others. In recent years, Xiaomi hs branched out from the smartphone market into household products, and remaining a close step behind innovative ideas. In this article I’m not trying to sell you the Xiaomi brand, but rather I hope you can get a better understanding of the company and their philosophy, and introduce you Xiaomi products that’s not normally sold outside of Asia.
Company History & Profile
Xiaomi was founded in 2010 by Lei Jun, based in Beijing. Having held the position of CEO and Vice Chairman of Kingsoft, Lei Jun has invested heavily in the past on various succesful start-up companies. Believing that high quality technology does not need to cost a fortune, Xiaomi was formed to produce tech that you will normally find costing much more.
Lei Jun – Founder, Chairman & CEO of Xiaomi
Xiaomi released its first Android based firmware MIUI, and then their first smartphone in August 2011, the Xiaomi Mi 1 which was shipped with either MIUI or stock android, and from there has grown from strength to strength, with an IDC report in 2014 putting Xiaomi as the 3rd largest smartphone manufacturer in the world behind Samsung and Apple, and also the largest smartphone vendor in China. Later on in December that same year, Xiaomi became the world’s most valuable technology start-up after it received US$1.1 billion funding from investors, making Xiaomi’s valuation more than uS$46 billion.
From 2014, Xiaomi has expanded to Singaporte, Malaysia, Philippines and India and has plans to enter Russia, Turkey, Mexico, Brazil, Indonesia and Thailand’s markets.
One of Xiaomi’s highest profile moves, and one that showed the intent of Xiaomi entering the international market to compete with the big boys, was Hugo Barra leaving his post as Google’s VP to join Xiaomi as VP Global. At the time, many people speculated on why Hugo Barra really left Google, and it was later explained by himself in this detailed interview.
At a D: Dive into Mobile conferenece in New York in 2013, Bin Lin, president and one of the co-founders of Xiaomi explains the company’s philosophy very well:
| “We believe the future of the mobile Internet is really about services. Cellphones are really just like PCs were 20 years ago. They generated big profit margins in the beginning. But those margins are in the single digits now. The same thing is beginning to happen to smartphones. So rather than focus on devices where margins will decline, we’re focusing on services.”
“Our flagship phone (the Xiaomi MI-2) has a lot of the same specs you’d see in high-end Samsung and HTC phones, It’s got the same processor that Samsung uses in the Galaxy S4. But it costs about half as much. … We essentially price our phones at bill-of-materials.” |
To further reduce overhead costs, Xiaomi does not own any physical stores, selling exclusively from its online store. Xiaomi has also chosen not to have traditional advertising, relying on social networking servieces and word-of-mouth to publicise its products. By also keeping a tight control over its stock, Xiaomi is able to place cheap batch orders to meet demands. The business model changed slightly in 2014 when Xiaomi stores started to open around the world. Many people openly criticized that the stores openly copied Apple Stores asthetically.
Xiaomi Store at 20/F Hollywood Plaza, Mongkok, Kowloon, Hong Kong
Xiaomi reports that they listen to customer feedback very closely, having them test out upcoming features, and building an extensive online community. Lei Jun describes it here, “When I was with Kingsoft, I had the opportunity to work with Nokia and Microsoft, two mobile phone giants of their time. One dy, I pointed out to their R&D boss, some inadequacues. After that, they merely acknowledged my input, but never acted upon what I had said. So I thought to myself, if I make a phone, you can tell me anything you wish for it or what’s wrong. If it is justifiable, we will work on it immediately. I’ll give you an update every week and you may even see your wishes come true within a week.”
