Xiaomi Inc. 2018

Abstract

As a serial entrepreneur, Lei Jun has always dreamed about establishing a company that is as great as Apple Inc and that could really help to solve some social problems. In 2010, Lei Jun sensed the trend of transforming from functional mobile phone to smartphone and he decided to found Xiaomi Inc to make quality technology accessible to everyone. And relying on Xiaomi’s integrated model of hardware, Internet, and new retail, it grew rapidly, especially at the beginning. Within 4 years, in 2014, Xiaomi already became the largest smartphone manufacturer in China and the third largest smartphone manufacturer in the world, which was truly a miracle in the history of smartphone market. However, Xiaomi’s focus on Internet mode not only brought the explosive growth but also some limitations. During 2015 and 2016, Xiaomi experienced the most serious crisis since its establishment. And the main reason behind this crisis was that some major competitors also focused on cost performance and they actively deploy the offline channels. Vendors like OPPO and Vivo opened a lot of offline stores to target the emerging market in third- to fourth-tier cities and some rural areas. At this point, Lei Jun started to notice the importance of offline channel and he also began to deploy Xiaomi’s offline stores. After this crisis, Xiaomi returned to the fourth largest smartphone manufactures in the world. But, it is reaching another crucial point now due to the shrinkage and saturation of smartphone market. At present, there are some potential opportunities as well as some hidden challenges faced by Xiaomi. To create a more promising future and develop more sustainably, what should be the next step for Xiaomi?

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