Xiaomi means "little rice" in Chinese, but there is nothing small about the trajectory of this red-hot tech company. Although only four years old, Xiaomi, a smartphone company, is the world's third largest smartphone distributor .
The Chinese company was founded in 2010 by CEO Lei Jun who, according to Forbes, ranks at number 8 on the list of wealthiest people in China, with a net worth of $9 billion.
So what is the story behind the triumph of this company that most people, outside of China, have never heard of? When you combine style, speed and affordability into a mobile gadget, success is no real mystery. Their flagship phone, which runs an open source version of Google's Android firmware (meaning it comes without Google services), is the Xiaomi Mi series - the most recent being the Mi 4 which is being marketed as the fastest phone in the world. All that, and yet its starting price tag is $320? Our minds are blown.
And you know what? For an affordable smartphone running Android and packing some pretty decent specs, we think it looks pretty good. In addition, when you slap one of these fancy looking covers on it looks even more...
...like an iPhone, but at half the retail price.
However, Xiaomi has taken some heat in the media for essentially copying the Apple look . Founder Lei himself has declared a competition with Apple, and has admitted to being inspired by Steve Jobs ' success. We think that might just be smack talk, as Lei Jun was a successful businessman far before the conception of Xiaomi. In 2004, he reportedly sold his retail site Joyo.com (at the time China's largest online retail company) to Amazon for $75 million . Joyo.com is now Amazon China.
So what if the tech giant's products are virtually unheard of outside of its home region? In 2012, Xiaomi's Mi 2 sold 7.19 million units, and in the first half of 2013, the company sold 7.03 million handsets with their Mi 2S model beating Samsung S4 sales . Year end reports state that the company is now allegedly raising over $1 billion in funding from investors.
The billion dollar question is, how did they go from zero to hero in barely five years?
Some credit their innovative marketing strategies. In 2012 for example, Xiaomi announced that it would sell its phones only on China's top microblogging platform Weibo, a tactic the resulted in 50,000 units sold in the first 5 minutes with an additional 1.3 million units reserved. Starting off their sales with a limited supply of a few hundred thousand units, the company gauges demand and keeps costs down.
Selling at prices that are only minimally over the cost of production makes Xiaomi's profit margins narrow, but the company plans to rectify this in the future by monetizing their software and services in the future. Xiaomi also keeps company costs down by encouraging lots of user feedback, specifically for their version of Android, called MIUI. Each week they release a version which is then tested directly by thousands of their most avid users.
From the Xiaomi's affordable and classy products to their unbelievably speedy growth and their annually rising sales numbers, we think it's pretty safe to say that other tech giants might have a thing or two to learn from the Asian Steve Jobs.