From Startup to Global Competitor - Insights into Xiaomi

This is a terrific article from BusinessWeek on the growth strategy of Xiaomi, a Chinese business that is fast-becoming one of the countries best-known global brands.Lots in the article (and the related video which I have added further below) for business students to note - I have jotted down some of the things I spotted below.We've written before about Xiaomi and it is certainly an important business to watch - take a look at the other business blog articles on Xiaomi.

Some key points from the article:

In 2013 Xiaomi sold 18.7 million smartphones almost entirely from its own website, bringing in $5 billion in revenue.

Xiaomi initially set a corporate objective of selling 40 million smartphones in 2014, then raised it to 60 million. There is talk that the objective for 2015 will be to ship 100 million smartphones.

Xiaomi has extended its product range to other digital devices, including tablets, HDTVs and digital product accessories

A culture of constant product innovation: Xiaomi devices run the company's own version of the Android operating system and this is updated every week., often incorporating ideas from users

A distinctive business model based on direct sales: Xiaomi sells online (promoting via social networks), never in retail stores, and avoids conventional advertising, devoting only about 1 percent of its revenue to marketing. By comparison, Samsung spends about 5-6% of revenue on marketing. By selling direct, Xiaomi also save around 20-25% of margin that would otherwise go to retailers.

Premium products at a low price: Xiaomi's flagship smartphone - the Mi 3 - is priced at around $270, approximately half the price of an iPhone

Growth beyond China: Lei Jun on expanding Xiaomi's product range into other emerging markets: "Chinese technology companies are coming to the rest of the world"

A success story built on a distinctive organisational culture. The 8 co-founders of Xiaomi "forged a hard-driving office culture. The founders agreed to work from 10 in the morning to 10 at night—10 to 10, they called it—six days a week."

No plans to raise finance from a flotation: Xiaomi will stay private for some time to come - no plans for an IPO. “We have to focus on how to provide better products and services. Xiaomi has no plans to go public within the next five years.”

Leadership style: Lei Jun remains a workaholic; consistently working over 100 hours per week.

Some supporting videos: