Lei Jun's Jedi counterattack plan takes effect, revealing three key words that will help Xiaomi return to the throne

Xiaomi has changed the mobile phone industry around the world.

If Google has paved a new development path for the smartphone industry, then it is no exaggeration to say that Xiaomi is the first company on this path to allow users to drive a 1.2T small-displacement car - the price is cheap enough and the power is unambiguous.

There is no doubt that Xiaomi is the pioneer of the entire industry. At the beginning, its popularity was so great that it even alarmed Huawei to set up its own Honor mobile phone brand to compete with it.

However, the wind and rain will blow away the glory. No one can stay at the forefront forever, and Xiaomi is no exception.

When quality problems, hunger marketing and other problems emerged frequently, the original small-displacement Xiaomi has grown into a large truck with forty wheels.

Xiaomi has slowed down. Since 2015, Xiaomi's sales have begun to show signs of decline, so much so that Lei Jun began to avoid talking about the grand goals set at the beginning of the year at the end of the year.

Due to inertia, Xiaomi had a very bad year in 2016, and its sales plummeted again. In 2017, IDC reported that Xiaomi's sales in China fell by 7.5% in the first quarter, and it dropped out of the top four in sales.

However, data from IDC also shows that Xiaomi's domestic market share was 9.0% in the first quarter of 2017. Compared with the fourth quarter of last year, Xiaomi's domestic market share was only 7.4%, a sharp increase of 21.6% month-on-month. According to (official account:), Lei Jun believes that the reasons for Xiaomi's 21.6% month-on-month growth in the first quarter of this year are: cost-effectiveness, new retail, and internationalization.

However, the mobile phone market is now highly competitive. Can Xiaomi achieve a comprehensive counterattack relying solely on the three codes of cost-effectiveness, new retail, and internationalization?

“Carry out cost-effectiveness to the end”

It should be said that the Xiaomi brand has always carried the "cost-effectiveness" gene since its birth. It is precisely by virtue of cost-effectiveness that Xiaomi, as a fledgling, has rewritten the entire mobile phone market; but it is also because the threshold of the price war is too low that Xiaomi itself has been caught in a stalemate offensive and defensive battle with "friendly competitors".

In addition, Xiaomi has always followed the strategy of "no design is the best design", pursuing the ultimate in configuration parameters but being quite disdainful of appearance, often copying popular models in the market. While improving cost-effectiveness and reducing design costs, this practice has also made Xiaomi wear the hat of a "loser brand" for many years, which has been criticized.

How bad is Xiaomi's brand image? How to remove the Xiaomi logo from Xiaomi phones has long been a hot topic on Tieba and Zhihu. There are even many Xiaomi tempered glass films on Taobao that directly say "remove the logo" as a gimmick. Consumers don't want others to know that their phones are Xiaomi, and they don't want others to see the "MI" on their phones.

As the sales of mobile phones declined, Xiaomi began to rebuild its brand image. In 2016, Xiaomi made frequent moves, hiring a spokesperson, redesigning the appearance of mobile phones, and even inviting internationally renowned designer Philip Starck to design Xiaomi MIX, which won numerous awards. Xiaomi has gone from one extreme to another.

What is more commendable is that despite this series of measures, Xiaomi mobile phones still maintain a very high cost-effectiveness.

The Xiaomi MAX and vivo X7 released last year both use the Snapdragon 652 processor, but the X7 is 500 yuan more expensive than the top configuration of the Xiaomi MAX. In terms of cost performance, Xiaomi wins hands down compared to vivo. The Xiaomi 6, which was just released, uses the Snapdragon 835 processor, but its price is half that of the Samsung S8, which also uses the Snapdragon 835.

Using price as a weapon and relying on its upstream advantages, Xiaomi has successfully dragged down countless brands. While the price of core components has soared by more than 50% compared to the previous generation of flagships, the price of Xiaomi 6 has only increased slightly by 25%. It can be predicted that Xiaomi 6 will still have the advantage of cost performance in the future Snapdragon 835 phones.

Xiaomi Home plays an important role in the new retail model

Although Xiaomi can easily beat the blue and green giants in terms of price-performance ratio, the fact that it was beaten by OV in both sales and profits last year undoubtedly gave Xiaomi a huge stimulus. Countless media outlets gave Xiaomi a "diagnosis": it's time to focus on offline business.

Indeed, the improvement of offline stores is crucial to improving the profit margin of mobile phones and building the brand. OV relied on its deep understanding of offline operations since the BBK era to pull Xiaomi down from the altar.

The single online model has shown signs of fatigue, so new retail has naturally become one of Xiaomi's five major strategies and has made great contributions to Xiaomi at the beginning of this year.

It took only one year for Xiaomi to open 88 stores across the country and began to enter the core business districts. In terms of sales per square meter (sales per square meter), Xiaomi's sales reached 260,000, second only to Apple's 400,000. According to (official account:), Lei Jun's goal is to open 200 Xiaomi stores in 2017, 1,000 stores in three years, and revenue of 70 billion in five years.

For Xiaomi, the significance of Mi Home is more than just an offline sales channel. Different from the exclusive stores of OPPO and vivo, Xiaomi's new retail refers to the organic combination of Mi Home and the Internet, allowing users to experience Xiaomi products in person while enjoying the competitive online prices. This plays a huge role in Xiaomi's brand image and ecological layout.

The technology accumulation has exploded and the internationalization route has achieved a breakthrough

Xiaomi's offline layout is not only carried out in the country.

Recently, the first Xiaomi Store outside of China has been established in Phoenix Market City Mall in Bangalore, providing ecological chain products sold in India, including mobile phones, mobile power banks, earphones, bracelets, and air purifiers, for Indian consumers to experience. It also supports convenient door-to-door pickup after online ordering, which is very convenient.

I still remember that in 2014, Xiaomi was banned from selling in India by a Delhi court due to infringement of Ericsson's standard core patent portfolio. Now, according to market research company Canalys, in the first quarter of this year, Xiaomi ranked second only to Samsung in the Indian smartphone market.

Not only that, in the three years of going international, Xiaomi has entered more than 20 countries and ranks among the top in sales in countries such as Indonesia, Ukraine, and Myanmar.

In the international market, the biggest barrier facing domestic brands is patents. Brands such as OPPO, VIVO, Xiaomi, and OnePlus have all been involved in patent lawsuits abroad and have been banned from selling their products.

With the depletion of the domestic demographic dividend, Huawei has been making huge profits around the world, and the vast overseas market is particularly attractive. However, the iron must be hard to forge, and patent reserves have become a rigid requirement for going abroad to try new things.

Xiaomi’s successful breakthrough is largely due to its accumulation of patented technologies.

According to (official account:), Xiaomi's total global patent applications have reached 16,000, with a total of 3,612 authorized patents and 1,767 foreign-related patents.

In addition to the rapid increase in patent reserves, Xiaomi's Surge chip is also an important part of its internationalization.

The successful development of its own chip "Surge S1" has made Xiaomi the fourth mobile phone manufacturer after Apple, Samsung and Huawei that has the ability to produce both chips and mobile phones. Although its performance is mid-range, taking this step is not easy and it has a huge effect on enhancing Xiaomi's brand influence.

Xiaomi's sales have been declining in the past two years. In addition to the increasing competitive pressure, it is also due to the failure to respond to changes in market trends in a timely manner. In the period when the market structure was gradually taking shape, it failed to accurately position the Xiaomi brand: it was overly superstitious about cost-effectiveness, overly dependent on online platforms, and did not pay enough attention to technological accumulation.

Today, Xiaomi is actively carrying out self-rescue. Faced with Lei Jun’s three counterattack codes of cost-effectiveness, new retail and internationalization, the market has given a positive response, and the popularity of Xiaomi brand is recovering.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.