Consumer electronics startup enters Malaysian market; cofounder bullish
Handsets at near cost, aims to profit from cross-selling services and merchandise
CONSUMER electronics company Xiaomi Inc is confident that its quick rise to becoming one of the most recognisable names in the smartphone space is no fluke and believes it is poised to grow in South-East Asia, said one of its founders.
Speaking to Digital News Asia (DNA) in an interview, president and cofounder Bin Lin said Xiaomi is on track to sell 40 million phones this year, more than double the phones it sold in 2013.
“In 2012, we sold 7.2 million units and in 2013 we touched 18.7 million units sold,” he said. “[This year] we’re pretty confident of growth in this region.’
Founded in 2010 by eight partners including Chinese serial entrepreneur Lei Jun, one of the richest men in China, Xiaomi has quickly grown in the highly competitive world of smartphones.
The company name, made up of the Mandarin words ‘xiao’ ('small') and ‘mi’ ('rice'), is a reflection of its philosophy to work from small things and innovate from within. The term 'MI' is also an acronym for the ‘mobile Internet.’
Xiaomi employs some 3,000 people and is now currently valued at US$10 billion, after two rounds of very successful venture funding. All of its products were first sold in China via its online retail store, although it began moving into the Taiwan and Hong Kong markets in 2013, before coming to Singapore and Malaysia this year.
In its bid to go global, the company even snared a high-profile hire last October when Google’s former head of product management Hugo Barra joined the Chinese player as global vice president. He is tasked with end-to-end product management.
Meanwhile, Lin (pic) said the growth Xiaomi is currently experiencing is born out of delivering "high-specification quality products" but at a fraction of the price compared with some of its leading rivals in the business.
Consumers, he claimed, are drawn to the lower price points of Xiaomi's products but don't have to sacrifice top quality hardware such as processors, flash memory and high resolution screens.
Another attraction, he added, was its user friendly and feature-packed proprietary adaptation of Google’s stock Android operating system known as MIUI (MI user interface).
“We don’t have a marketing budget and we depend solely on our user community, known as ‘MI Friends,’ to spread the word on our products,” Lin said. “That’s how we can offer all our handsets at attractive prices.
"Also, we sell directly through our website www.mi.com, so we don’t incur distribution costs,” he added.
Xiaomi's flagship smartphone, the Mi 3 which goes on sale May 20 on its website, rivals the best that Apple and Samsung can muster in their iPhone and Galaxy range of smartphones respectively. Its full specifications can be found here.
The Mi 3 is priced at an incredibly low RM889, while its midrange smartphone, the Redmi, goes for some RM200 to RM300 less. Currently, all top-tier smartphones such as the iPhone, Galaxy S5 or the HTC One (M8) cost more than RM2,000.
[RM1 = US$0.31]
Lin also said that at the heart of its products is the MIUI, the software that the company began with, which he claimed has been thoughtfully designed with the user in mind.
The MIUI has won plaudits for being easy to use, fast and feature packed.
Next Page: How Xiaomi makes money, views from an analyst