Xiaomi’s Formula to Success

Xiaomi was created in 2010, but over 11 short years, they’ve gone from a nobody in China to now trading blows with Samsung in many European countries as the Android King.

So how did Xiaomi of all companies get this successful? Let’s break it down.

Staff Members

Xiaomi has a grand total of 20,000, which might sound like a big amount but that’s only 7% of Samsung’s 300,000 members.

Xiaomi specifically said that they want to keep their staff members small and agile. This means that they can massively streamline their staff and keep costs low while paying decent to high wages to the existing staff members.

Makes you kind of wonder why other companies don’t do it too.

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Xiaomi has a very unique direction when it comes to advertising. They seldom opt for expensive and let’s be honest, mostly useless, billboards & TV adverts. Instead, they tend to use free media like Instagram posts, word of mouth, Twitter, and other social media platforms.

This is why you rarely see Xiaomi on billboards and TV. It’s not because they can’t afford it, but because they choose not to do it.

Online First

Carrying on from the theme of Xiaomi avoiding expensive advertisement, they also tend to avoid brick-and-mortar stores whenever possible. They tend to only have physical stores when they need to show products that need a physical demonstration, for instance, a TV or a vacuum cleaner.

This way, they can save on rent, electricity bills, and even employee wages since they don’t need people to run the store. By shifting these savings onto the consumer, they can make the pricing of these phones more attractive while still making a profit.

Ecosystem

Just now I briefly mentioned that Xiaomi only has physical stores when they need to sell products that require a physical demonstration. Because Xiaomi makes everything from a phone to a vacuum cleaner to a shaver, they can make all of them work seamlessly with each other. They all roughly follow the same color scheme which strengthens the fact that you are using a Xiaomi product which is all at a surprisingly affordable price.

Sub-brands

So you might know that Xiaomi has two sub-brands, namely: Poco and Redmi. Xiaomi uses these sub-brands to make different types of phones for consumers. Redmi phones are photography-focused like the Note 10 Pro with a 108MP camera at 250$. While Poco phones are power-focused like the Poco F3 with a Snapdragon 870 at 350$.

This means that they can serve amazing valued budget phones while still having room for their flagship phones, namely the Mi series such as the Mi 11 Ultra without cannibalizing their own sales.

Profit

I touched on the fact that Xiaomi products all have a surprisingly affordable price, this is because Xiaomi has a very different view on profit. They’ve gone on record to say that they only take away 2$ of profit per phone.

They sell quite the number of goods though, so this number does still add up to quite a large sum of money.

So that’s it. From how Xiaomi lies to manage their staff to their views on profit is what adds up to their massive success. Let me know what you think of this down in the comments.