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A year ago, China's smart phone maker Xiaomi changed from 'Unicorn' to 'Unicorn' because of the slump in handset sales, making Xiaomi the No. 5 mobile phone manufacturer from China's number one position No single company in the global smart phone industry has managed to regain its former level after suffering a serious traumatic injury.
Today, millet is called 'Phoenix of China' and the company has seen rapid growth in the past year. Strategy Analytic estimates that millet is expected to overtake rivals such as Apple, Huawei and OPPO in 2018 to become a The world's second-largest maker of smartphones after Samsung, there are also reports that Xiaomi is considering allowing the company to complete its IPO by 2018, and that Xiaomi is likely to be one of the largest IPO companies in history.
Millet successful comeback, so that the company has become a model of China's start-up companies.Now China has 10,000 new companies established every day, that is, every minute will set up seven companies.While the United States business circle, the United States can start-ups new The number is declining continuously, with the number of U.S. start-ups dropping by 36% over the past 10 years to an average of only about 1,000. China no longer only has a "cottage", but has already surpassed the United States in key technologies such as mobile payment, And in advanced microchips, artificial intelligence and other fields, China's competitiveness is also constantly strengthening.Xiaomi is one of the best examples of China's business circle.
Why millet can get an unprecedented turning point in order to achieve a comeback? Xiaomi re-success achieved can continue? Brutal profit margins in the mobile phone business will make millet die again? Millet can do other Chinese handset manufacturers have never done Thing - the successful conquest of the US mobile phone market?
To find the answers to these questions, we must first review the failure of millet in the years 2015 to 2016. In 2015, the shipment of millet smartphones was 70 million units, and by 2016, the number dropped sharply To 41 million.Jun Lei, founder of Xiaomi, known as 'China's Jobs,' believes that the main reason for the slump in millet production is the problem that arises between the rapid development of millet and the supply chain. During that period, millet Forced out of several overseas markets, such as Brazil and Indonesia.
In addition, there were some problems with Xiaomi's organization, so the company reorganized the smartphone hardware, R & D, supply chain and quality management team, but the biggest problem that the company encountered during that period may be for online sales Over-reliance, making their products difficult to reach hundreds of millions of technology-insensitive consumers in China, such as consumers from small cities and rural areas.MOPO, the leading rival in China, took a The exact opposite of Xiaomi's sales test, the two companies consolidated their relationship with their sales partners in these regions and swallowed the void that Xiaomi has left in this market.
However, this near-known mistake, so that Xiaomi explored a new business model, but also to make millet usher in a turning point.With the rebound in sales, millet began its own global expansion of the company's unusual mode and internal The mode of operation is worth exploring, it is with this model, millet received an incredible recovery.
Like many other businesses in the internet age, millet has also been a dual-business model since its inception, selling hardware products and providing online services to consumers. Most of Xiaomi's revenue comes from low-cost smartphones and smartphones TV sales, and these smart phones and TVs, Millet has also become a platform for online services.As Xiaomi hardware products are low prices, meager profits, so most of the company's profits come from online services, such as users Providing a large number of TV dramas, movies, games, etc. Xiaomi's movie and TV drama service offers two kinds of payment methods: pay-as-you-go and monthly service.In addition, Xiaomi even uses artificial intelligence engines to evaluate user credits for users Provide online microcredit services.
Ecosphere strategy
After millet setbacks, executives at the company became aware of a problem: they needed to find a third business model, offline retail, but they wanted to sell hardware products, not just smartphones, to offline retailers The solution they proposed was to create an ecosystem of more than 100 start-ups that, as millet partners, provided other home networking equipment and technology products to Xiaomi to attract consumers into Millet retail store.
Speaking at his office, Xiaomi, a former senior vice president and president of Qualcomm Worldwide and Xiaomi, president of Greater China, explained the ecological strategy of Xiaomi and why the strategy can attract traffic. "The frequency of people buying mobile phones and TVs How many times do you need to go to a retail store to buy a cell phone? But if you want to buy a Bluetooth impression, a networked rice cooker, or an air purifier? We're not just selling the best products, Other competitors' products are cheaper, and our ecosystem can even provide consumers with products they have never heard of before, so consumers are willing to keep checking in to see what new products we have. "
Wang Xiang said Xiaomi's strategy is to reduce Chinese consumers' pain points. "He pointed out that air pollution is a serious problem that China is now facing .High-quality air purifier price is about $ 500. Therefore, the investment in the A start-up founded by an air-conditioning expert who provided design and manufacturing help to the company and provided them with experience in assessing the supply chain and reducing operating costs. With the cooperation of both The company has made a price of just $ 105 Millet air purifier 2. This purifier can be interconnected with the phone to allow users to monitor the air quality in their home and send reminders to users when it is time to replace the filter.
This purifier has gained market welcome.Wang Xiang said: "In less than two months, it has become the highest-volume air purifier products on the Chinese market. We are in this way, to solve the 'Pain point' on the air purifier market.
In the fitness bracelet products, millet has taken a similar approach.They designed a smart bracelet life of up to 60 days, to solve the other smart bracelet need to charge every week pain points.Micro has now even surpassed the Fitbit And Apple, become the world's highest sales of smart bracelet manufacturers.
Whether it is a pillow, an air purifier, a rice cooker or a Bluetooth 4.0 speaker, all the products in the Xiaomi Ecosystem address the pain points of consumers in terms of price / performance ratio, but the price of these products is not high, but the quality of design and production Not low.As of now, these products together have won more than 100 international design awards.
However, this strategy has also been criticized by Xiaomi.Xiang Xiang said: 'When we first started using this model, many people said that we are not a focused enterprise.We say that we are like a supermarket or department store - What they are selling, what they are selling, they criticize us and say: 'You are a smart phone company, why sell rice cookers, batteries, ballpoint pens and trolley case?' But it turns out that our choice is correct, this method is We are working.
But some analysts are still skeptical of the practice of millet.Philips columnist, has been questioned millet Tim Culpan (Tim Culpan) said: 'millet's PR seems to promote the company has a large number of product categories Such as smart bracelets, air purifiers, etc. They talked about some of the ecological effects and want to prove that millet is not an ordinary device manufacturer, but I do not buy it. The word networking was placed on a piece of electronic equipment Before, it did not make this device part of a smart home. '
However, in front of the number of millet, no doubt is no longer important.Strategy Analytics said that third-quarter shipments of millet phones increased 91% over the same period the global smartphone market grew by only 5% .Another analyst It is predicted that millet sales this year are expected to reach 110 billion yuan, about 17 billion U.S. dollars.
Millet mobile phone sales surge is one of the main driving force, millet Mix phone, this phone was released in October 2016, is the world's first borderless phone. Millet CFO week introduced the development of this mobile phone Encountered engineering problems, he said: 'In order to remove the phone's forehead, and use the borderless screen, we first replaced the microphone in order to do this, we placed behind the touch screen ceramic plate, which passed Vibrations pass the sound to the user's ear. "Millet then uses ultrasound instead of the distance sensor to measure the distance between the phone and the user's face, and the front camera, usually placed on top, is moved to the bottom of the phone. , Millet has released Mix 2 phone.
MIUI These products are designed to solve the pain points in both China and overseas markets have built a huge fan base MIUI is a millet based Android system to create a mobile phone user interface now MIUI has 300 million active users. Users daily cell phone usage time reached 5 hours, this figure is sufficient to explain the enthusiasm of rice flour millet phone.
For example, millet will ask the user to put forward the function suggestion, every week lets the user vote which function will be implanted in the system renewal.Every Friday at 5 o'clock, millet will release with the The latest popular features MIUI update.
Millet way
Last year, one user said he could not find the key because he was drunk and could not find the phone's flashlight application one night. The user suggested to Xiaomi whether to turn on the flashlight through the Changan fingerprint sensor. Other users like this very much It is suggested that this feature has now been added to MIUI, a change that seems seemingly insignificant, but which makes users feel the sincerity of millet, as if millet was their own company.
The millet approach is a national, grassroots business model where millet partners with passionate fans to design the UI and work with other startup partners to develop the product. It appears to millet executives that the solution is to gain extra users Loyalty and brand stickiness.
I have visited Xiaomi's retail store in Beijing's Five-colored City and there are three other mobile phone retailers around the Xiaomi retail store. The popularity of the Xiaomi retail store is in stark contrast to the other three. A consumer from shopping said : 'The millet products are very cost-effective and well-designed, but you have to use millet to control all the devices, which is inconvenient.'
Weekly funding said that high user loyalty brought millet high sales per square foot .CityCity shopping mall with a total area of 100,000 square meters, while millet retail store area of 150 square meters .Although only accounted for Shopping mall 0.15% of the total area, but Xiaomi home store sales accounted for 7% of total sales of shopping malls.
Despite the great success of the past year, some observers are still worried that the company's hardware profit margin is too Weibo, making it difficult for the company to maintain its long-term competitiveness under the fierce competition in China and the global market. Some people worry that this microblogging profits will be difficult for other businesses to provide financial support.
One venture capitalist who has invested in a number of Chinese companies said: 'In the mobile phones and other products, millet can be large-scale, but they are difficult to have enough profit. They are in a very competitive industry While it is clear that they are more than just a handset maker, it is questionable whether they can really be innovation leaders.
The venture capitalist said that millet may be on the way to becoming the most valuable company in the world, but they must make enough profits to support their own valuation.
Wang Xiang admits that millet is now facing many challenges. One of the biggest challenges is how to expand globally, especially how to enter the risky US market. Wang Xiang believes that millet may enter the US market by 2019, but there are people That the millet will enter the US market earlier than this time.Wang Xiang said: 'The United States is a very attractive market for us and my ultimate goal is to make millet a major player in the US smartphone market. '
Wang Xiang was well aware that American consumers had high expectations for service, and most mobile phones in the United States were sold through operators. Xiaomi had almost no experience in working with operators. "Wang Xiang said: Of course Need to cooperate with at least one operator, I hope we can cooperate with all operators.'For millet with about 1.4 million employees, which means they need access to a lot of technical resources.Each US operators for the network Of the phones have different requirements.Wang Xiang said: 'Perhaps we need to select a carrier, so that products succeed.After the other operators will come to contact us, and then we will be more resources to meet the new cooperation Operator's needs. '
Xiaomi will not be the first Chinese manufacturer to sell mobile phones in the United States, and Huawei has confirmed that it will sell mobile phones in the United States by 2018.
Prior to testing the US market, millet will take the lead in Western Europe, where they started sales in Spain last month, and to successfully enter the international market, millet must get the global intellectual property used in the product. Work, millet's international expansion process will be struggling.In 2014, millet encountered in India, a similar thing, they were Ericsson sued.
Millet has gained experience with the lawsuit. Since that incident, Xiaomi has registered about 5,700 patents, most of which are in-house developed and some acquired from companies such as Microsoft and Nokia. If millet In the United States did not do a good job when entering the patent market, Apple and other companies will always be ready to use the patent war to crack down on millet.
So far, millet has entered 60 countries and regions in the world after investing 4 billion U.S. dollars in the ecosphere, millet will invest 1 billion U.S. dollars in India to create a similar ecosystem in the region and 100 India Last month, millet also last month announced the establishment of a strategic partnership with Baidu, the two companies will work together to develop artificial intelligence products for the Internet of Things market. Millet plan, in 2019, domestic and foreign The number of millet retail stores increased to 2000.
Millet company, no one think they have been successful. Wang Xiang said: 'We are in this industry, let us not dare relax for a moment.The competition is fierce here, you can not relax, can not sleep, Even with your eyes open, you may feel like you can not go on vacation or your business suffers after you return on holiday.