Rise of a giant
Making affordable technology a viable concept in the near future is among the key milestones in Xiaomi’s march towards global dominance, writes Nur Zarina Othman
IMAGINE a vacuum cleaner that knows when to start cleaning even when you’re not around. It’s a dream come true for most home owners — they can go shopping and return to a dust-free house. But how much does such technology cost? And can we all afford it?
IT’S IN THE CORE
One technology company that is working towards making advanced home technologies affordable to all is Xiaomi.
Known for its affordable smartphones, the China-based company also makes smart hardware connected by an Internetof-Things (IoT) platform.
During a recent launch in Madrid, Spain, the company showcased an array of new smart devices that make technology affordable to everyone.
These come from its triathlon business model which comprises three synergistic pillars of growth.
The first is the company’s promise for innovative, high quality and well-designed hardware that is focused on exceptional user experience.
Secondly, it relies on highly efficient retail to make sure its products are highly accessible. The third is to ensure an engaging Internet service.
According to Xiaomi’s global spokesperson, Donovan Sung, these factors are what sets Xiaomi apart from other smartphone makers in the market.
Founded in 2010 by a group of engineers and designers, Xiaomi believes that highquality and well-designed technology products and services should be accessible to
the world and they are certainly heading towards becoming one of the key technology producers.
MORE THAN PHONES
Innovation, quality, design and user experience make up the DNA of Xiaomi’s products regardless of whether they are developed in-house or in collaboration with partners.
As of the fourth quarter of 2017, Xiaomi was the world’s third-largest wearables company by shipment, according to IDC, with over 100 million connected devices sold, excluding smartphones and laptops.
“Because of this, we are able to price our products aggressively,” says Sung.
“We don’t market our products traditionally. Besides really good products, we depend on word-of-mouth, social media and e-commerce as our model is quite different,” he adds.
At the event, Sung also announced the release of Xiaomi’s latest non-phone products ― a Bluetooth toothbrush and two robots.
The Mi Robot Builder is a modular coding toy using 978 toy blocks along with other parts like wheels and chains to make it come to life.
Safe for children and adults too, all parts and blocks are made of eco-friendly materials. Powered by a CPU processor and a proprietary operating system, the robot can perform perfectly-coordinated actions.
It also features four USB type-C ports, which provide power connection to the robot. Connect Mi Robot Builder to the app via Bluetooth and simply drag and drop complex command codes to the robot from a smartphone.
Users can learn to program the Mi Robot Builder through a series of tutorials on the Mi Robot Builder app.
It’s also suitable for STEM learning. (STEM is a curriculum based on the idea of educating students in four specific disciplines — science, technology, engineering and mathematics — in an interdisciplinary and applied approach)
The company has an array of smart products that are available around the world which includes smart cleaning robots, Bluetooth kettles, smart TVs, and smart watches, among others.
“We have a lot of non-smartphone products that are available in different countries,” says Sung.
“In Spain, one of our most popular ecosystem products is our (Mi Electric) scooter. In Thailand and Vietnam, we are known for our powerbanks and cameras.”
He says Xiaomi is all about offering options for users because not everyone likes the same thing and the company is serious about producing “killer products” that are of high quality, high performance, well designed and affordable.
“This is to ensure that everyone can have access to technology and enjoy the options which will lead to brand loyalty.”
QUALITY PRODUCTS
In recent months, Xiaomi has announced that the company would put a five per cent net profit margin cap on its hardware products, including smartphones and gadgets.
Can the company sustain with such a slim margin?
Unlike most hardware firms, Xiaomi does not make gadgets on its own. It employs an “ecosystem” approach, where it invests in device manufacturers like Lumi United and Segway-Ninebot, to name a few.
To ensure that the start-ups stick to their core values of quality and affordability, Xiaomi sends engineers to work alongside them. The start-ups accept low margins in exchange for huge sales volumes that come with joining the Xiaomi ecosystem.
The company curates a wide range of additional products by investing in and managing an ecosystem of over 210 companies, among which more than 90 companies are focused on the development of smart hardware and lifestyle products.
Apart from being the main player in India, the company has already been ranked as one of Europe’s top five phone brands and is strengthening its presence in the region.
MORE THAN A PHONE
The Mi A2, the second generation of Xiaomi’s Mi A1, an Android One smartphone developed by Google, is now in the top 10 best-selling smartphones in the world.
The brand toppled Samsung to be the largest smartphone brand in India late last year, and is slowly making its way into the European market.
So what makes Xiaomi so successful? Considering it had just started selling smartphones three years ago, what factor could have allowed this China grown brand to make it big?
“The Mi fans,” says Sung.
Xiaomi has a large and highly engaged global user base with approximately 190 million monthly active MIUI users as of March, 2018. Mi fans is a large global community of passionate users who are intensely loyal to the Xiaomi brand.
“They are hardcore fans who’ve helped us spread the word ― through word of mouth and social media. They are very loyal,” he says.
During two separate launch events in France and Italy recently, Sung says thousands of Mi fans flew in from all over Europe to camp outside its flagship store to get their hands on Xiaomi’s products.
“They can resonate with Xiaomi because they feel that we are very sincere — two of our core values are passion and sincerity,” says Sung.
The Mi fans are highly engaged on Xiaomi’s platform and actively contribute feedback and ideas to its product development.