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Globalization has broadened national markets, expanding them far beyond traditional boundaries and creating historic opportunities for growth and success.
At the same time, the push across traditional trade lines and practices has amped up competition, altered consumer purchasing habits, and accelerated the pace at which companies must innovate—or risk losing brand recognition and market share.
Nowhere have these disruptions been more apparent than in the technology sector. And perhaps no technology company has demonstrated more global growth or market dominance than Xiaomi Corporation, an Internet company with smartphones and smart hardware connected by an Internet of things (IoT) platform at its core. Founded in 2010 by Lei Jun and a team of brilliant professionals in their 30s and early-40s—men typically older than the average startup age range but boldly entrepreneurial—the company has become an industry leader and a global giant in smartphones with an expansive ecosystem of interconnected IoT products.
The numbers tell an incredible story. In 2012, just two years after starting, the company recorded sales of more than $1 billion. By 2014, as Xiaomi became the top smartphone company in China by unit shipments, annual sales exceeded $10 billion, making it the fastest-growing tech company in history.
Xiaomi is currently the world’s fourth-largest smartphone brand as of March 2019, according to market research and consulting company IDC, and has established the world’s largest consumer IoT platform, with more than 171 million smart devices—excluding smartphones and laptops—connected to its platform.
These and subsequent accomplishments have landed the Beijing-based corporation on this year’s Fortune Global 500 list of the world’s largest companies. A distinction that, in Lei Jun’s words, “is a milestone in Xiaomi’s globalization journey.”
A Smartphone + AIOT Dual-Core Strategy
A core driver of Xiaomi’s runaway success is a business model built on a trio of products and services: well-designed, high-performance hardware at accessible prices; Internet services tailored to meet changing consumer needs; and new retail channels through which products are delivered directly to end-users.
An increasingly important element of that model has been the focus on AI development and application. Earlier this year, the company launched its Smartphone + AIoT dual-core strategy. Part of Xiaomi’s IoT platform, the strategy strengthens the company’s leading position in the industry and enhances the user experience of IoT devices through artificial intelligence (A.I.).
The initiative, backed by a commitment to invest more than ¥10 billion (nearly $1.5 billion) in AIoT over the next five years, signals the company’s strong belief in future opportunities for the technology and new strategy.
“Xiaomi’s achievements so far illustrate the strength and resilience of our model,” noted Lei Jun, as the company launched its initial public offering. “Within seven years of our founding, our annual revenue exceeded ¥100 billion [approximately USD 14.5 billion], achieving a growth rate that many traditional companies are unable to match.”
Yet Lei Jun and his colleagues see Xiaomi as more than simply a hardware company. In their view, it is an innovation-driven Internet company that has established the world’s largest Internet of things platform for consumers. That view is consistent with the company’s mission to make innovation available to everyone and to “be the coolest company in the hearts of our users.” And that has created a broad fan base of consumers.
Mi Fan Culture
Users are at the core of Xiaomi’s culture, as evidenced by a highly engaged global user base that includes more than 260 million active, monthly MIUI users as of March 2019.
“Good companies make profits. Great companies win over people’s hearts,” Lei Jun has observed. “We have a large global community of ‘Mi Fans,’ passionate users who are intensely loyal to our brand, highly engaged on our platform, and actively contribute feedback and feature ideas to our product development.”
In fact, at the end of every year, hundreds of Mi Fans from all over the world are invited to Xiaomi’s headquarters where executives, including Lei Jun, cook for them and celebrate the New Year together. This is just one example of how Xiaomi’s unique corporate culture extends to its dedicated consumer base.
Today, Xiaomi products are present in more than 80 markets around the world and have a leading foothold in many markets. Xiaomi smartphones have remained No. 1 in market share position by shipments for seven consecutive quarters in India as of March 2019 and the company has continued to maintain a high growth rate, ranking fourth in terms of smartphone shipments for Western Europe. Meanwhile, Xiaomi continues to explore new markets in Africa and Latin America. And given the company’s passion to innovate and make its technology and products available to everyone, the menu of products will no doubt continue to expand.
Moreover, in a display of bold strategic maneuvering, Xiaomi products will be available to consumers not only online but offline, in specialized retail stores in China as well as in other countries and regions. As of March 2019, there were 480 authorized Mi Home stores overseas—79 of those in India—representing 93.5% year-over-year growth.
One testament to the success of the new retail model has been the reoccurring phenomena of long lines of consumers at the opening of each new Xiaomi brick-and-mortar store—and not just in China and India, but around the world. With this strategy and a business model that has overcome major challenges in place, it’s clear that Xiaomi is poised for continued growth and success.
By & Source: Fortune
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