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production is like apple, revenue is like amazon... what is the company that swept across china in three years?

Posted by harmelink at 2020-03-19

Xiaomi, surpassing the "child apple", has become China's four major IT enterprises, with the ultimate price competition with a yield of up to 1%. The product group is diversified, surpassing the synonym of winning or losing the price performance ratio. Now there is even the phenomenon of fan group

[photo source = Union News]

Recently, one enterprise has been added to the "bat" (Baidu, Alibaba, Tencent) of China's three major information technology (it) enterprises, known as the "staff" of the four major IT enterprises. The hero of X is Xiaomi. Three years after Xiaomi first launched its smartphone, China's smartphone market ranked first and the world's fifth. Five years after its establishment, LG, Sony and other large smart phone manufacturers surpassed each other. Last year, after Samsung, Huawei and apple, they ranked fourth in the market share, reducing the gap with apple, the founder of smart phones.

Xiaomi is a company founded in 2010 by Lei Jun, the chairman and CEO of Jinruan. Xiaomi, the meaning of Xiaomi, is based on the story of Lei Jun and his colleagues cooking porridge with Xiaomi. It contains the Buddhist concept that "a grain of rice equals a mountain".

Xiaomi's first smartphone was Mi 1, which went on sale in 2011. At that time, sales in the United States were 18.7 million units, so sales reached 600 million yuan (about 103.2 billion won). Since then, MI series smart phones have been published. In 2014, the share of global smart phones rose to the third place, ranking fourth last year. Last year's sales were 174915 million yuan (about 3 trillion, 90.6 billion won) and net profit was 13.4 billion yuan (about 230 billion won). Last year alone, 180.7 million smartphones were sold. All this was founded nine years later.

From "fruit apple" to "millet"

When Xiaomi first introduced the "flavor source" of smart phones, the industry rated Xiaomi as "Shancha apple". Xiaomi has actually planned the success stories of global enterprises such as apple and Amazon, which are fully reflected in Xiaomi.

Lei Jun, Xiaomi's CEO, most respects Steve Jobs, Apple's founder. He is trying to build up his image. Every time a new product is released, it's reminiscent of Steve Jobs's black T-shirt with jeans and sneakers. As a result, Lei Jun was nicknamed "Rachel booth".

The same goes for products. All products are outsourced like apple. This is based on the advantages of less investment burden and flexible volume adjustment. Plus the product itself is very similar to Apple products. Not only the MI series smartphones, but the tablet "mipad" also mixes the iPad and iPad. The slope is not too bad.

But the profit structure will imitate Amazon, the world's largest circulation company. Compared with the price of Apple's same product, the U.S. series of smart phones and mipad are less than half. In fact, the operating profit margin of hardware department is less than 1%. The reason why such a price can be set is that, like Amazon, it mainly focuses on online sales and reduces costs. The circulation fee is 2% of the competitive company's, and the publicity fee is 1% of the overall sales. In fact, Xiaomi's smartphone accessories and accessories account for only 3% of the total sales, but its profit contribution accounts for about 10%.

In addition, Lei Jun has also launched products with shorter replacement cycle, which should be sold in combination with products with longer replacement cycle. In order to make up for the decline in sales of smartphones or home appliances with longer replacement cycle, products with shorter replacement cycle should be replaced. At present, Xiaomi sells more than 1600 kinds of products, ranging from well-known fans, air purifiers and other household appliances to clothes, sports shoes, stationery, musical instruments and food.

[image source = AP news]

"Repeated mistakes are strength"

"Mistakes of the mainland", nicknamed millet. Under the condition of the continuous emergence of negative awareness of low quality of Chinese products, millet products with good cost performance (cost performance) have emerged, which means that "is the mainland (China) doing well because of mistakes?".

Therefore, the original expectation of Xiaomi is not great. As you can see from where, plus the fact that the software "MIUI" itself is only Android based on environment, Apple's IOS system and popularity, it has won the success of "Apple fakes". Many people commented that it is difficult to build more independent brands.

But unlike the industry's expectations, Xiaomi is building its own brand recently. American children with similar IOS system will upgrade their software every week and actively receive feedback from consumers. There is no Design Management Office (adjust launcher and smartphone configuration screen) on IOS as paid sales. Apple and Android have also created new systems.

Because of this, there is even a fan group called "Mi Fen". Every time Xiaomi releases a new version, it will recruit a "tester" to check whether there is a defect, and confirm the feedback from the Xiaomi online community with a total of 9.5 million participants at any time.

Recently Xiaomi is preparing for the 5g era. "The global smartphone market has ushered in a new mobile phone replacement boom in the 5g era," said Lei Jun. "this is a huge opportunity for Xiaomi. We continue to consolidate the foundation of 5g, increase investment in research and development every year, and make all preparations for the 5g era. "