For a company that didn’t even exist before 2010, Xiaomi has achieved many things in the last four years and has excelled in every step of the way, from being the third largest Smartphone manufacturer, just behind the giants of the industry like Samsung and apple, to having shipped 15 million devices in a single quarter, Xiaomi has revolutionized the Smartphone industry with its disruptive strategy, now Xiaomi has added another feather to its already full cap by becoming the world’s most valuable tech start-up having just gained an additional 1.1 billion dollars in funding raising its market valuation to around 45 billion dollars .
Significant events in Xiaomi’s history
Xiaomi was founded in April 2010 by ex-Kingsoft CEO Lei Jun, a company creating a new custom ROM based on Google’s Android with an aim to provide additional functionality that Android had yet to offer and an easy to use user interface. The Interface termed as MIUI which closely resembles the IOS, is available for over 200 devices in multiple languages having around 30 million users worldwide, which is pretty impressive for a four year old company.
In the year 2011 xiaomi entered the hardware market by announcing the MI One which emphasized their business model of selling top end phones at attractive prices.
Following the success of the MI One, Xiaomi lauched its second smart phone the Xiaomi Mi2, which sold over 10 million units in the span of 11 months. In addition to phones Xiaomi also tired their hands at producing TV’s Set top Boxes and routers, all all of them sold quite well to establish xiaomi as an multi product company akin to Samsung. By 2013 Xiamoi was the fifth most fifth most-used smartphone brand in China. In 2013, it sold 18.7 million smartphones.and 26.1 million smartphones in first half of 2014. In the year 2014 Xiaomi decided to expand and their first country of choice was Singapore, where it experiencd unparalleled success, selling out it’s entire stock of MI3 phones within two minutes of opening the sale.
This encouraged them to expand further opening up sales in countries such as Malaysia and India, where the phones were received with tremendous response. In April 2014, Xiaomi purchased a new domain – mi.com for a record US$3.6 million making Mi.com the most expensive domain name ever bought in China as confirmed by a senior executive of Xiaomi. Mi.com replaces xiaomi.com as the official website domain of Xiaomi.
What makes them successful?
Xiaomi captures its core audience, students and technophiles, people who constantly want the latest in technology and are more concerned about the configuration than the brand value.
Instead of launching and selling a new flagship every six months like Samsung, Sony and Apple, Xiaomi sells the same model for up to 18 months, giving it more flexibility with profits and the ability to sell accessories.
“The future of mobile internet is really about services” Lin Bin
Instead of focusing on hardware profits to grow the company, Xiaomi is more concerned with offering services to customers as a way to make money. To further reduce overhead costs, Xiaomi does not own a single physical store and instead sells exclusively from its own online store. It also did away with traditional advertising and relies on social networking services as well as its own customers to help advertise its products.
What does the future hold?
Xiaomi is growing explosively, selling 15.8 million phones worldwide in the third quarter of 2014, compared with 3.6 million sold worldwide in the third quarter of 2013, which is sizable for a 4 year old company, Xiaomi has also caused market leaders Samsung and Apple to struggle with reduced sales and revenue.
The company has set its sights on bigger conquests, moving its low-cost phones into Thailand, Indonesia, Brazil and 10 other countries. Xiaomi has all the potential to be a leader in the Smartphone industry and has the right strategy and the business sense to do so. But will they actually achieve it? That’s for the future to answer.