What are the major factors that contributed to Xiaomi becoming a leading smartphone company in the PRC?
Xiaomi Discussion Questions:
What are the major factors that contributed to Xiaomi becoming a leading smartphone company in the PRC?
What does Xiaomi’s rapid ascent mean for Apple and Samsung in China and globally? How are Apple and Samsung likely to react? What capabilities would Xiaomi need to develop to compete head-to-head with industry giants Apple and Samsung?
Should Xiaomi focus on competing with Apple and Samsung, or should they be more focused on competition with local Chinese rivals?
Xiaomi has been successful in China, but how will they fare in the global market? What obstacles are they likely to face? What capabilities will they need to develop to expand globally?
Xiaomi, Inc.: The Rise of a
Chinese Indigenous Competitor
Always believe that something wonderful is about to happen.
Xiaomi Mantra
Xiaomi’s rapid rise is changing the smartphone landscape in China, and potentially the world. China rapidly surpassed the United States of America to become the world’s largest smartphone market in 2011. While industry giant Apple’s attention was focused on overtaking industry leader Samsung for the fast-growing China market, Xiaomi burst onto the mobile phone scene catching both giants off guard. In the five years since their founding in 2010, Xiaomi rose to be the world’s third largest smartphone company based on units shipped. South Korea- headquartered Samsung Electronics Co. Ltd. and U.S.-headquartered Apple Inc. are the holders of the first and second spots, respectively.
When founded, Xiaomi’s vision was to develop and sell software for mobile devices using the Android operating system. As the company evolved, Xiaomi grew into a mobile Internet and e-commerce company that contract-manufactures smartphones and compatible devices designed to offer a complete customer experience. Xiaomi, one of China’s relatively few indigenous innovators, has been a major disruptor in China’s lucrative mo- bile telecommunications industry, due in large part to their emphasis on continuous, incremental improvement.
The reputation of Xiaomi’s driven founder, chairman and CEO Lei Jun, a Chinese serial entrepreneur and investor, is that he rarely rests. His reach in China’s high-tech sector is extensive, and his vision for Xiaomi ag- gressive. Lei stands out from many other Chinese IT leaders like Alibaba’s Jack Ma or Lenovo’s Yuanqing Yang; when he founded the company, he had no Western experience and did not speak English. To realize his vision, Lei surrounded himself with a world-class team of Chinese executives—and one prominent Western executive—with collective experience at top foreign IT firms like Google, Microsoft, Motorola, and Yahoo. This executive team complemented Lei and brought attributes that Lei lacked, in addition to considerable world-class IT experience.
Xiaomi was the 2014 leading smartphone vendor by shipments in China and the third largest smartphone manufacturer globally. Lei has come a long way from his youth in Xiantao, Hebei, to the helm of the most highly valued start-up in the world; yet, challenges remain for Lei and for Xiaomi. With more than 18 million handsets sold in China by 2013, and products launched regionally in Taiwan, Hong Kong, Singapore, Malaysia, Philippines, India, and Indonesia, the company contemplated global expansion. Xiaomi had been very successful in China, but how would they fare in the global market? Would Xiaomi need to develop additional capabilities to compete head-to-head with industry giants Apple and Samsung? Given Lei’s extraordinary range of interests and activities, would he have the focus and bandwidth to lead Xiaomi to its future?
Lei Jun, Founder, CEO, and Chairman
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