We have several times reported on the impressive development of Xiaomi, a Chinese smartphone manufacturer. The founder of Xiaomi, Lei Jun, recently gave an interview. He explains the reasons for the company’s successes and emphasizes its unique characteristics. What is the equivalent of Xiaomi in the West?
Lei Jun on Xiaomi
7.4 million preorders of a budget Red Rice (Hongmi) phone prove that Xiaomi is a big player in the Chinese smartphone market. In Q2 2013, it outclassed Apple, reaching 5% of the market share. It is still lower than big companies such as Samsung, Lenovo or Huawei, but Xiaomi entered the market no sooner than in 2011. By October 2013, Xiaomi was the fifth most-used smartphone brand in China. In Q2 2014, Xiaomi shipped 15 million devices, or 14 percent of China’s market share, meanwhile, Samsung shipped slightly more than 13 million.
By using effective marketing tools, such as online preorders (usually the first batch sold out within minutes), Xiaomi managed to create media hype and is sometimes compared to the said Apple. But Lei Jun disagrees with that comparison.
“We’re actually an internet company,” – says Lei Jun. He said that the hardware they sell is only the carrier for the MIUI software environment, which is not only the Android-based firmware but also features a lot of modifications, apps, games, and motifs. “Xiaomi and Apple are completely different things […] Xiaomi’s system can be changed by anyone, thousands of designers can create all functions and solutions.” Selling phones cheaply means, in fact, buying the market share, similar to Amazon selling Kindles at a very moderate price.
Therefore, Xiaomi’s further plans to expand may come into reality. For the company, which monthly revenue was on the level of $3 mln, reaching $21-24 mln is possible.
Image by CFP