Article: Xiaomi's One More Thing – "Just for Fans"
Founded in 2010 as a startup to sell smartphones exclusively over the Internet, Xiaomi Corp. has achieved huge milestones in 2014. Just a few months after overtaking Samsung in Q2 as the largest smartphone vendor by shipments in China and becoming the world’s third-largest phone maker in the process, Xiaomi was proclaimed the world’s most valuable technology startup at a $45 billion valuation surpassing the much more hyped Uber Technologies Inc.
Xiaomi's success can be explained by two big factors. As noted in a recent a16z podcast (podcast by Andreessen Horowitz, a venture capital firm), "Xiaomi is embracing design and branding marketing in a way other Asian manufacturers have always struggled to do". Of course, a great part of Xiaomi’s success can be attributed to their blatant copying of Apple’s aesthetics on the design side. However, it's the branding side which I think might become even more important for the future of Xiaomi.
“Just for fans” is the slogan of Xiaomi as every step of the way is led by our hardcore fans. Amongst our staff, many were initially a fan of Xiaomi products before they decided to join us... It is with this mentality and dedication, combined with the support of Xiaomi fans that has made Xiaomi products so unique.
(Source: Xiaomi Corp. | About Us | Culture)
According to a recent article by the New York Times, Xiaomi seems to be creating a community of highly engaged fans only achieved by a few technology brands, namely Apple, until now:
To be sure, Xiaomi is treated with respect by its competitors. Li Nan, vice president of the rival Meizu, which began in the early 2000s by making digital music players and aims at customers slightly older and wealthier than Xiaomi’s, likens the devotion of Xiaomi supporters to a religion. “Xiaomi fans have a high level of organization,” he said. “They love Xiaomi. It’s a form of idolatry.”
In other words, Xiaomi's "just for fans" strategy is one more thing they are borrowing from Apple to create the equivalent of the "Apple fan phenomenon" in China and, if successful, could become their biggest growth driver in the foreseeable future. Xiaomi, unlike Apple, will most likely not leverage their brand equity by charging premium margins on their products (Xiaomi was founded with the vision of producing high-quality technology at the lowest cost possible). Xiaomi's aspiration is becoming a lifestyle brand for all their fans, a brand that doesn't sell them just smartphones but anything they need. In a world where Apple fans would buy Apple underwear if available, Xiaomi's ambitions doesn't seem to be that crazy after all. Let's see if they can deliver!
Update: I found this excellent video on Xiaomi's rapid rise by Bloomberg TV.
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