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How Xiaomi Broke Out Of China To Go Global?

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How Xiaomi broke out of China to go global ?Xiaomi was started in 2010. Today, it’s one of the world’s most popular smartphones.

In India, it’s number one.

So, I’ve come to its headquarters here in Beijing to understand just how this company grew so rapidly and how it can maintain its momentum.

Xiaomi’s rise has been meteoric.

How Xiaomi Broke Out Of China To Go Global?

Just nine years after it was founded and one year after going public, the Chinese company became the youngest member of the Fortune Global 500.

The tech giant is best known for its smartphones.

Xiaomi smartphones
How Xiaomi broke out of China to go global-Xiaomi smartphones

It’s the world’s fourth most popular smartphone maker, behind Samsung, Huawei and Apple.

But Xiaomi doesn’t just make phones.

Walk into one of Xiaomi’s more than 1,000 global stores, and you’ll find an array of different devices.

Almost anything you can imagine, they sell here in the Xiaomi store.

I see virtual reality, walkie talkies, this device translates languages, like Chinese to English, voice assistants and smart home speakers, wearables and even tools.

How Xiaomi broke out of China to go global
How Xiaomi broke out of China to go global

Did I mention they sell everything?

Since its early days, Xiaomi’s founders dreamed of an international footprint.

And now, it’s one of a hand full of Chinese companies who have managed to do what many couldn’t.

It broke out of its home market and went global.

Xiaomi’s headcount has grown from about 100 in 2010 to a whopping 17,000 staff members today.

How Xiaomi broke out of China to go global
How Xiaomi broke out of China to go global

This is company orientation where employees learn about the corporate history and corporate culture before they begin in their roles, and just by the looks of it, this is quite a lot of people.

Its global headquarters in Beijing is home to about 12,000 employees.

I’ve come to Xiaomi’s brand-new headquarters and it’s so new that you can still see them putting on the finishing touches around the building and at the base of this lobby you actually see this, it’s the Xiaomi store.

How Xiaomi broke out of China to go global
How Xiaomi broke out of China to go global

The first thing that I think of when I see this store, well, it reminds me of an Apple Store.

We are different, we are very, very different than Apple.

Xiang Wang is Xiaomi’s Global Senior Vice President and head of the company’s international business.

Apple is a great company, they do a lot of technology innovation.

We are doing the same, but our model is different.

We want to sell as low as possible instead of selling at a premium price.

That business model originates from Xiaomi’s founder, Chinese entrepreneur Lei Jun.

Xiaomi CEO-Lei Jun
Xiaomi CEO-Lei Jun

Lei Jun’s vision was to create a premium smartphone.

that could compete with the likes of Apple and Samsung, but at a more affordable price.

This allowed Xiaomi to tap into China’s growing lower end smartphone market, and it wasn’t long before it did the same abroad.

Just look at this graph.

In 2015, six percent of Xiaomi’s total revenues came from outside Mainland China.

By 2018, that grew to 40%.

How Xiaomi broke out of China to go global
How Xiaomi broke out of China to go global

The aim?

To eventually have half of its total revenue coming from outside its borders.

Xiaomi has achieved that by expanding into more than 80 markets.

but it’s India that is its biggest overseas success story to date.

It launched in the world’s second most populous country in 2014 where it held flash sales to generate hype around their phones.

It worked.

You only entered India less than four years ago,

and you’ve become the number one smartphone maker, how did that happen?

We offer very, very high-performance device, with a very, very affordable price.

Before us, if you want to buy this smartphone, it was very, very expensive.

Our model is to make the best product but sell as low as possible.

That helped Xiaomi pull ahead of Samsung to become India’s top smartphone brand in 2018.

While it still holds today, Chinese rival, BBK Electronics, which backs Vivo, Oppo and Realme,could be challenging Xiaomi’s market dominance.

Outside of India and China, there’s an additional 400 retail outlets,including locations in Dubai, Barcelona, London and Mexico City.

We opened our first store in Mexico City and 4,000 people showed up.

Wang argues Xiaomi’s fan culture is what helps set the company apart from other low-cost competitors.

From launch events to meet-ups for gadget enthusiasts,there have been more than 1,000 Xiaomi fan events to date.

Here you have an entire wall dedicated to fans, things that fans have sent to Xiaomi.

We always receive many, many gifts.

Normally they are technology geeks.

A boy and a girl, they met during our fans event.

So the couple in Indonesia met at a Xiaomi event and named their child, Xiaomi.

But the Chinese tech company has had its share of challenges, too,from temporarily withdrawing from Brazil to losing a trademark case in Europe against Apple over the name of its tablet.

And of course there’s the elephant in the room, the United States.

Xiaomi has long-said it plans to expand into the U.S. market, but those plans seem to be on hold thanks to the U.S.-China trade war.

U.S. President Donald Trump has openly scrutinized Xiaomi’s home-grown tech rival,Huawei on multiple occasions.

The U.S. market, there were talks about 2019?

The U.S. market actually is, I think in no doubt, is the most important market, for everyone.

We are still very, very young. The U.S. market is very, very different.

We are working very hard trying to design a product for the U.S. market but still, resources is the big issue.

Xiaomi made its name with the smartphone, but it, like its competitors,is having to diversify as the smartphone era’s peak winds down.

Smartphone shipments have declined for nine consecutive quarters here in China.

So for Xiaomi to continue to grow, it sees its ambitions beyond the smartphone and beyond China.

Actually, we are much more than a smartphone company.

We are the largest consumer IoT brand in the world.

The company is putting much of its energy into the home of the future.

From smart rice cookers to smart door locks,our homes are going high-tech and Xiaomi wants to ride that wave.

It says it has more than 190 million connected IoT devices.

There’s five ways that I can enter through this smart door.

First is through my phone electronically using something like NFC or bluetooth.

And then there’s a number pad, where I can input a number, there’s also a traditional keyhole here but I’m going to be super unique and try my fingerprint.

There we go.

It’s also taking on Samsung and LG with the launch of this smart refrigerator, which can categorize your groceries, play music, and even take notes.

Xiaomi hopes that every room will have one of its AI Smart speakers, including the bedroom, so the moment I walk in, the lights automatically turn on.

Let’s see if she recognizes me with an accent.

I got her to recognize me and she just said, “What’s up?”

Earlier when I walked into the room she told me,”Welcome back home, you must be very tired, go to sleep.”

She has quite a personality.

The Mi AI Speaker is Xiaomi’s answer to the Google Home or the Amazon Echo.

While Xiaomi sold nearly three million smart speakers in the second quarter of 2019, it still trails behind its Chinese rivals Baidu and Alibaba.

This store was open just about two years ago, but one of the first things I noticed is just across from it, Xiaomi is preparing to open a brand-new space but this one will be focused on lifestyle products and things related to the smart home.

While many of these products carry the Xiaomi name, not all are actually made by Xiaomi.

Take for instance, air purifier company SmartMi.

It’s one of the 270 startups that Xiaomi invests in.

Xiaomi helped SmartMi in significant ways because we use Xiaomi channel to sell products.

Its products are sold in Xiaomi stores but also, through its own channels, too.

SmartMi has grown to become China’s number one selling air purifier.

Consumers will know, “This product is really good, its from Xiaomi.

Oh, they also have their own brand called SmartMi.”

SmartMi even hopes to one day go public.

And just like Xiaomi, SmartMi is pushing for success outside of China too.

Right now 41,000 of your products are being used in India, and you can track this in real time.

Right.

It’s startups like this that have helped push Xiaomi’s international reach.

How do you continue the momentum?

You have to keep the innovating spirit.

The smartphone market is very, very, very competitive. You have to do a lot of exciting things everyday.

Xiaomi turns 10 years old next year and in under a decade, it’s been able to do what many companies here in this country haven’t done, succeed outside of China.

But just how big this company can get, well that’s anybody’s guess.

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