While Xiaomi is universally known for its high quality mobile smartphones and accessories, the company also happens to be the third largest e-commerce company in China, according to the company’s President, Mr.
In his speech, Mr. Lin affirmed that Xiaomi is creating a small miracle in the history of entrepreneurship, by reminding everybody that his company is an extremely young one, and was founded only on April 6th, 2010. However, within just a five year time span, the company has seen rapid development, resulting in total sales of 61 million mobile phones, just last year alone.
Mr. Lin claimed that the online distribution model is critical to the success of Xiaomi, and emphasized, that four factors have combined to give his company the explosive growth that it has seen since its inception five years ago. According to him, Xiaomi’s products have been fashionable; they’ve been unique, yet mass-market, and the company hasn’t priced itself out of the reach of the majority of buyers. He also attributed the company’s success to a longer life-cycle of its products, than is the norm generally.
Illustrating with simple, yet factual examples, Mr. Bin pointed out that the company has only released a handful of devices over the past five years. He said, mobile devices have a notoriously short life-span, from around three to nine months depending on the product. In such a scenario, he expressed elation that Xiaomi’s devices not only stay in the market that much longer, but also sell in high volumes.
The first mobile phone ever sold by the company, the original Mi1, was released in August 2011. It stayed in the market for 18 months, till it was de-commissioned, but not before selling 7.9 million units. The Mi2 meanwhile, was launched in August of the following year and remained in the market even longer, eventually selling up to 21.42 million devices overall. The Mi3 ended up with 14.38 million units sold in 18 months and the Mi4 is the current flagship that has been on the market since last year. Xiaomi’s Mi5 meanwhile, is slated to launch later this year.
Finally, talking about the e-commerce model, Mr. Lin Bin re-emphasized that it was one of the most important business decisions for Xiaomi, and should be seen as a piece of entrepreneurial innovation. He signed off by saying, the most important aspects for Xiaomi’s business model are keeping costs in check, selling products at reasonable prices and treating the user as a friend by offering them the best possible service.