Introduction
Xiaomi is the China's tech-giant
Company, Xiaomi started 10 years ago now it's become the fourth largest
smartphone player in the world after Samsung, Apple and Huawei. Xiaomi’s
products segments are phones, Devices and Internet services, LED TV. Smartphone
manufacturing is the core business of Xiaomi. The company’s 70% of revenues
comes from smartphone manufacturing.
History
Lei Jun is the CEO and co-founder
of Xiaomi. On April 2010, Lei Jun founded Xiaomi taking other six co-founder.
His vision was to create a premium smartphone with more affordable Price.
According to his vision he started business with taking 100 staff members and
now they have 18000+ staff members and 2000+ Xiaomi store (1000 in Chania and
the rest globally) around the world. Xiaomi has expanded their business into
more than 90 markets.
Raising of Xiaomi
In August 2011,
Xiaomi launched their first smartphone commercially appeared in Asia and East
Asia
technical market
and successfully to preorder 3laks.
By 2013, Xiaomi they sold 13.7 million smartphones and became
the 6th most used smartphone brand in china.
In 2014, To increase new customer,
the company open 2000 store (1000 china and the rest globally) before they sell
their product online ecommerce sites only. This year Xiaomi became china’s
number one smartphone manufacturer. Xiaomi sold over 60 million smartphones on
the year. This year, Xiaomi enter the Indian market that second largest market
in the world after china. And they achieved success in India, in 22 July 2014,
Xiaomi India got 5 lakes order on Flipcart ecommerce site that was out of
expectation.
In 2015, Xiaomi sold 70 million
units but expected sales was 100 million that decreased revenue 9.2%.
In 2016, Xiaomi launched its Redmi
note 3, it made record sale on the year. It became a grand breaking smartphone
at that time in the budget segment and was well received by Indian customer.
In 2017, Xiaomi sold 91.41 million
unit and increased revenue 328% in Indian market. Sales increased 67% in
2015-2017.
In 2018, Xiaomi sold 119 million
and revenue was $16.75 billion. It was record selling for the company and by
this sales, the company sales increased 88%. On the year, Xiaomi became the
number one best-selling smartphone manufacturer in India by increasing market
share 28.3% and 4th largest smartphone manufacturer in the world.
In 2019, Xiaomi shipped 124.6
million units of smartphones and the revenue was 29.4 billion, up 17.7% Y-O-Y.
The Redmi Note 7 was the best-selling smartphone among all.
In 2020, Although Covid-19
affected the overall smartphone market but Xiaomi’s sales increased 6.83% and
revenue growth rate 3.1% end of the June. Till 27th August, Xiaomi’s
sold was 57.5 million units (Q1 $29.2 million and Q2 28.3 million unit) and earned
revenue $17.8 billion (Q1 $7.1 billion and Q2 $7.7 billion). Xiaomi smartphone
ASP (average selling price) increased by 11.8% YOY in global market. According
to Canalys statistics in the second quarter of 2020, Xiaomi’s global
smartphones shipment ranks 4th in the world increasing market share
10.1%. Xiaomi smartphone ranked 1st in European market by Growth
rate and ranked top 3 for the first time by market share 16.8%. In Western
Europe ranked 1st by growth rate 116% YOY. In Spain increased 150%
YOY ranked top for in terms of market share and ranked second in France for the
first time. And 50% revenue achieve from outside of the china on the year that
was 6% in 2015 and become Top 5 in 47 global smartphone market.
Reasons of Success
Xiaomi never cease to explore and
innovate. The company continuously bring innovation keeping pace the time.
Xiaomi always make the coolest and
eye-catching product that attracts the consumer very much.
Xiaomi is now the best smartphone
in the world for photography proudly following that attract the young
consumers.
Xiaomi’s pricing strategy make
them most successful because Xiaomi continues to offer products with the best
price to performance ratio. The company offer very high performance device but
at lower prices than competitor. For keeping low prices, the company follows
their new business model.
Many companies spend billions of
dollar on marketing for banding their product but at the end, this cost cut
from the consumer. But Xiaomi did not spend billions of dollar in marketing,
the company do very little advertising on social media.
To reduce cost, in initiating the
company did not open any store and sold their product online directly. As a
result, the company did not need to maintain huge inventory and could able to
cut huge cost of marketing intermediaries.
Xiaomi sells their smartphone at
cost of production and make zero profit from the hardware purchase but then
tries to make profit from their customer during the uses period of software by
selling subscription or loot box, services, showing ads and by making ecosystem
with their product like wireless earphone, electric scooter, wearable band.
This kind of business model has
two goal: Acquisition and Engagement.
Acquiring as many customers as
possible and then making sure that those customers spend as much time and money
on the platform as possible.
Acquisition is the cost and
Engagement is the profit. Acquisition achieved by lowering hardware and Engagement
is all about software.
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