Xiaomi Corporation

• Date founded: 2010
• Industry: Electronics; technology
• Corporate Headquarters: Beijing, China
• Type: Public

Overview

Xiaomi Corporation, pronounced Shao-mee, is a Chinese manufacturer specializing in consumer electronics and technology. Originally known for its smartphones, Xiaomi expanded during its first years of operation to include a wide range of products such as laptop computers, wearable fitness devices, streaming boxes, headphones, electric scooters, air purifiers, vacuums, televisions, electronic toys, smart home devices, and other items. The company offers streaming services and software that use the devices it produces. It has several subsidiaries, including Redmi, which makes less expensive smartphones, and Pocophone, a mid-range line of phones especially popular in India. Xiaomi was first listed on the Hong Kong Stock Exchange on July 9, 2018. In 2024, it was the world’s third-largest seller of smartphones.

Chinese entrepreneur Lei Jun founded the company in 2010. He collaborated with several co-founders, including Lin Bin, Hong Feng, Liu De, and Wang Chuan. Within four years, the company was selling $12 billion in products annually and had become one of the top cell phone manufacturers in China. Though its market share fell for a time, the company rebounded by changing its approach and broadening its product line. Xiaomi initially focused mainly on markets in Asia, India, and Russia, where the population creates a demand for smartphones at a lower cost than industry giants such as Apple and Samsung can deliver in those areas. The company expanded to Europe in 2017, and by 2019, Xiaomi’s products were available in the United States through a number of online retailers.

History

Lei Jun was already a successful businessman, investor, and entrepreneur when he founded Xiaomi in April 2010. He became the company’s first chairman and chief executive officer when the company entered the smartphone market just as it began to take off. Lei was also instrumental in naming the company Xiaomi, which means “little rice” in Chinese.

Xiaomi originated as a collaborative effort between several companies already involved in manufacturing consumer electronics and mobile phones. These included Qualcomm, a company that makes the chips used in smartphones, as well as Temasek Holdings, an investment company owned by the government of the Republic of Singapore. The first Xiaomi phone to enter the market was the Xiaomi Mi1 in August 2011. Prior to that, the company sold software for the Android operating system. The company’s phones use a variation of Android software.

Within a year, Xiaomi sold seven million phones. By 2013, it more than doubled that to about twenty million. In 2014, it more than tripled its previous year’s sales to sixty-one million units. While these numbers are small compared to sales by Apple and Samsung, they represented a significant showing for a new start-up company.

Initially, the company’s smartphones were only available online. This fit with the company’s model of selling a cellphone with a low markup. This strategy was aimed at appealing to technology-savvy customers and students who wanted a quality product at a lower price. This market was the same market that appreciated another product offered by Xiaomi, Mobile Internet, or Mi. The company’s website emphasizes the role the supporters of Mi played in the company’s formative years and indicates that many employees were first “fans.”

Experts attribute part of the company’s meteoric rise from start-up to the top of the Chinese market in just four years to the loyalty of its customer base. Some studies have indicated that Xiaomi customers are so technology-focused that, as a group, they spend more time on their smartphones than users of any other cellphone, including Apple. However, in 2015, Xiaomi’s sales slowed and then dropped significantly. Industry analysts attributed the drop to the online-only sales method used by the company. While this was ideal for a target market that favored all forms of technology, it limited Xiaomi’s ability to move into new markets in more rural communities where internet access was limited. As a result, the company’s sales dropped from seventy million phones in 2015 to forty-one million in 2016.

The company adapted, opening a number of physical stores throughout China. Physically, these stores resembled Apple flagship stores. However, the stores reflected a change in the business model for Xiaomi. Stores that sold only smartphones will service any one particular customer occasionally, as their phones generally have a lifespan of at least a year or more. To generate repeat business from these customers, Xiaomi developed other products to meet consumer needs.

For instance, China has a significant problem with smog and air quality. As a result, many people are interested in having an air purifier in their homes. Noticing that most air purifiers available in China cost the equivalent to about $500, Xiaomi developed a new product with similar quality but at a price point of around 20 percent of the industry average.

The company was able to do this because it established an innovative business model that provided an air-purification company with funding and access to Xiaomi’s supply and manufacturing facilities. This enabled the company to create a new product at a lower price point. Xiaomi later replicated this model to create several other popular products, including a wearable fitness device with a long battery life.

Continuing to adapt to the market, its customer needs, and investing in new products and services, Xiaomi continued to grow in the early twenty-first century. In addition to expanding smart home technology, the company began investing in electric and autonomous driving vehicle technology. As reported by Forbes, Xiaomi's 2024 revenue totaled $38.2 billion, with $45.7 billion in assets and $2.5 billion in profits.

Impact

Xiaomi continued its goal to be an innovator in both products and business models. The company has earned more than one hundred international design awards and developed products and services that have allowed it to enter other markets. Xiaomi has also become known for its responsiveness to suggestions and requests from its “fans,” further securing the backing of its very loyal base of supporters. The appearance of its flagship stores, the devotion of its customers to anything bearing the Mi brand, and its dominant presence in the Chinese smartphone market have led to some call Xiaomi the “Apple of China.”

Bibliography

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