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Is Xiaomi an internet company? Lei Jun's ideal and the reality of Xiaomi

via:博客园     time:2018/12/7 23:33:33     readed:379

“ Is Xiaomi an internet company? ”

Although Lei Jun preached his answer as early as the beginning of his business, in the following eight years, Xiaomi has never escaped the self-torture caused by the above topic.

“Millet is an Internet company with mobile phones, smart hardware and IoT platforms at its core. ” In Xiaomi's IPO prospectus, the identity of the "Internet company" was previously appended with up to three attributives. The latter two, just after the 2015 “U-type” trough, Xiaomi opened up new business opportunities for himself.

Lei Jun once felt that this new version of "Millet Genesis" should be able to push its valuation to $100 billion. But at least when it went public in July this year, the capital market only recognized $45 billion —— not even half, and at the end of October, the company's market value once fell to about $32.5 billion.


On July 9, 2018, Xiaomi Group completed the listing ringing ceremony at the Hong Kong Stock Exchange.

Xiaomi urgently needs to prove to investors that they have enough imagination in the business realization ability and considerable profit margin.

After 133 days of completion of the listing on the Hong Kong Stock Exchange on July 9th, on November 19th, Xiaomi Group announced the third quarter earnings report for 2018. Although its mobile phone revenue still accounts for 68%, it is still down from 70.30% in 2017 —— in 2015, this figure is still 80.4%.

At the same time, the revenue of mobile phones has shrunk. At the same time, the revenue structure is growing from the revenue of “Internet services” and “IoT (Internet of things) and consumer products”. Both contributed to 9.2% and 22.1% of Xiaomi's total revenue, respectively.


In the past few years, due to the excessive MIUI system and prematurely carrying the landing of “Internet service monetization”, the engineers of MIUI team had to face the performance task of splitting each of them. The contradiction between user experience and liquidation has become very sharp.

Fortunately, the hardware that is produced by more than 200 eco-chain companies invested by Xiaomi, especially through the Xiaomi retail channel, is actively helping Xiaomi to uninstall some MIUI at least in the short to medium term. The liquidity pressure on the body —— they do not need to strictly abide by Lei Jun's "hardware comprehensive net interest rate must not exceed 5%", but only required to be significantly lower in product pricing than the peers' similar products As long as the price is competitive, the product view and the millet are generally consistent.

The industry has a consensus —— the smartphone market has entered the stock market, and the smart hardware launched by Xiaomi Eco-Chain Company not only contributes considerable hardware revenue, but also continuously provides Xiaomi's eagerness to “Internet users”. You can even win a lot of iOS users for Xiaomi by jumping across the Android system that MIUI belongs to. The continued expansion of the “IoT and consumer products” sales volume was handed over to Xiaomi’s so-called new retail strategy.

However, in the face of increasingly complex business structures, the young company continues to increase its management challenges. The Internet ideals that Lei Jun preached, and the reality of reality that Xiaomi faces, seem to be constantly growing. .

# MIUI: Realizing, realizing, realizing #

Just two weeks after Xiaomi announced the most important major restructuring in the company's history, “Yanfen” was taken over from Xiaomi. To be precise, he made this decision after "delete powder".

He joined Xiaomi in early 2016, which was the darkest moment in the company's eight-year history. However, Zhang Yong had a very optimistic judgment at the time: this is an opportunity for a good company to enter the market.

During that time, Xiaomi was at the end of a high-level personnel struggle. As the final stage of this struggle, in late May 2016, Lei Jun issued an internal letter on personnel appointment and dismissal, saying that “Zhou Guangping, co-founder and vice president of Xiaomi Technology, will be the chief scientist of Xiaomi”. Zhou Guangping's new position is described as “Responsible for the research of mobile technology frontiers”, which is quite retreat. In the past, he led the two major business lines of Xiaomi mobile phone R&D and supply chain, which was led by Lei Jun.

Zhou Guangping's loss stems from the “Millet 5 Incident” that began to ferment in the spring of 2015. Xiaomi 5 is the 5th generation mobile phone of Xiaomi. It was originally planned to be launched in June 2015, but it was not shipped until February of the following year. The reason is that Guo Jun, vice president of Xiaomi's mobile phone supply chain, reported to Zhou Guangping almost offended Xiaomi's suppliers. Within half a year, Xiaomi Mall showed 10 mobile phones, but only one or two were available. This is the starting point for Xiaomi to fall into a series of bad luck in the absolute core business of mobile phones.

“A lot of people didn’t believe that (the company) would turn over from (Xiaomi) 5 at the time. & rdquo; Zhang Yong told the "First Financial Weekly". But what he didn't even think about was that Xiaomi's journey of turning over in more than two years eventually became his own trip.

Within the Xiaomi company, Zhang Yongcai gradually understood that Lei Jun’s “Ideal” and “model innovation” every day, experienced layer-by-layer conduction, and the reality that he faced the grassroots product manager in the MIUI department every day. Stress can be turned into an irreconcilable contradiction.

The two system versions released in August 2015 and June 2016, ——MIUI7, MIUI8—— are called "ADUI", meaning that it is an advertising system, not a user interaction system.

In addition to forcing advertisements to be pushed by users without customization, these two systems will also recommend other related or irrelevant new applications in the form of buoys when users open some applications. The effect is like that on many Internet pages. There are some kinds of advertising floating windows, you want to close it, you may not find the closed entrance. Some users feel that their mobile phone has become like "warm baby", suspected that the battery is out of order, in fact, the system is loading too much content.

The outside world has also begun to label Xiaomi with the label of “Giant Baby Company”, which means that the hands are long, the brain is long, and the brain grows too fast and does not have time to form values. Didi Travel and Today's headlines were later considered to be this type of company.

This term may not be suitable for use in Lei Jun. He is nearly 50 years old and has listed four companies on the market. Those companies can be called excellent, not great. He has said on several occasions that Xiaomi was the last company he founded in his lifetime. Even if it is not for the social ideal of creating a national brand and promoting a new round of industrial revolution, he also needs a company worth $100 billion to prove himself.

The problem faced by Lei Jun is not that the company has no values, but that the expectations are too high, so that he will unconsciously create luck and rationalize some radical practices when he is unable to achieve it. “He once said at the press conference that we sell mobile phones at such a low price. Users are willing to let us make some money on the system. If one day we close down, there will be rice noodles to donate to us. & rdquo; Zhang Yong said.

MIUI's advertising space has been more and more in the inaction of Lei Jun. A Xiaomi public relations official told CBN that the company has never set a specific KPI for the MIUI department, let alone the ability to cash in with the salaries of department employees. But Zhang Yong said that those numbers will be written into OKR (Objectives and Key Results) and become a kind of implicit encouragement. “The so-called OKR can be understood as a KPI. Sometimes the meeting bosses will blurt out when they are anxious. ‘KPI’……”

“The mission of engineers is no longer just to make a pure product, let alone have any energy to support them to polish a successful application that is enough to serve the entire network of users. & rdquo; Zhang Yong's enthusiasm for the company is disappearing. Including himself, MIUI's engineers often hang a word called "big-format data" —— always remember the true characteristics of the Xiaomi mobile phone users and the corresponding user needs —— The products that are constantly iterating in their hands are becoming more and more “in the first place” in terms of content selection, in order to exchange for higher user stickiness and greater traffic. The final value of these efforts is to convert to more advertising revenue.

Xiaomi asked data research company Nielsen to complete a customized user experience report. When the report was placed on Lei’s desk, he realized the seriousness of the problem.

Lei Jun spent a lot of money to restore the confidence of users. The core task he asked for the next MIUI9 to solve was to let the user re-experience the Xiaomi mobile phone & quot; lightning fast & rdquo;. To this end, "(Advertising) can be cut first, can not be cut to set the manual switch to the advertising space."

At the Xiaomi Note 2 mobile phone conference in October 2016, with most of the Xiaomi employees, Lei Jun suddenly released Xiaomi's first full-screen concept mobile phone — — Xiaomi MIX at the end of the conference.


In October 2018, Xiaomi MIX 3's new product launch was held in the Beijing National Palace Museum. The MIX series of mobile phones is helping Xiaomi gradually increase the average selling price of its mobile phones.

Xiaomi has spent two years developing this phone. It uses a ceramic body to prepare for wireless charging and the arrival of the 5G era. More importantly, Xiaomi became the first in the world to make 17:9. Screen mobile phone company. In the words of Lei Jun, the advent of MIX is the result of Xiaomi's “cost development”, and when the first batch of MIX mobile phones were mass-produced, the yield rate was less than 10%, which means that there is 10 behind each mobile phone. The cost of a mobile phone.

Zhang Yong experienced this scene, and it really made him get back to the mood when he became "my rice powder", "that kind of feeling that really makes you always young and always tears." At that time, I watched the introduction of Note 2 in the audience and then I slammed it. Later, PPT flashed, my God. "Zhang Yong knows that after Zhou Guangping was persuaded to retreat, Lei Jun personally took the Xiaomi mobile phone team to support him all the time, just for the arrival of this moment ——“In order to let all the rice noodles see the Buddha who once met the Buddha Xiaomi, who is only pursuing technology, is back. ”

The release of MIX is an important encouragement to the morale of the Xiaomi team.

In June 2017, when the re-opening mobile phone system MIUI9 was released, it also enhanced the confidence of Zhang Yong. However, the fundamental contradiction has not been resolved. “In this version of MIUI10, the returned advertising space is back.” The Internet service represented by the MIUI department is still the biggest expectation of Xiaomi’s overall profitability —&mdash Although the income ratio is not high, its gross profit margin can currently exceed 60%, while the gross profit margin of smartphones is only 6% to 8%. The gross profit margin of IoT and consumer products is also not high, at around 10%. .

This temptation is implicit in the business model that Lei Jun proposed in 2010, “small profits but quick turnover”: first to make the scale of large hardware users, and then to obtain more profits from the Internet service level.

It turns out that this model is a bit idealistic.

#小米新零售: sales, sales, sales#

Since Xiaomi decided to start the store offline, its first step is to transform the Xiaomi home that only undertakes after-sales service before upgrading.


A Xiaomi home in Hong Kong, customers are waiting in line to check out.

Lei Jun has publicly stated that it is actually “to be late” in 2016 to really transform the home of Xiaomi. At the end of 2016, the “Millet House” was re-given to the retail function. There were only 51 stores. Then it took only two years, and the number of stores expanded to 499 —— almost twice as many as MUJI, which started to open in China in 2008.


In order to further complete the sinking to the lower-tier market, Xiaomi's home shop mode, Xiaomi has launched in 2016, "Millet authorized experience store" and "Millet store" two forms Shop. The relationship between the three stores is that the closer to the county and the town, the greater the difference between the latter two stores and the millet's flagship store.

In the latest three quarterly reports, Xiaomi took the initiative to mention his own “new leap forward” in the new retail business, and it opened 740 new “authorized experience stores” in 90 days. The total number of offline stores has increased to 1,100, covering 563 counties across the country, and the number should be doubled at least in the future.

More subtle is, "Millet shop", this formulation gradually disappeared in the post of Xiaomi's public relations, its iterative name is "Millet franchise store" or "direct supply point" The number of stores has now exceeded 37,000, and their mission is to further deepen the channel network of Xiaomi to tens of thousands of townships across the country.

In October, 2018, in Wuhan, Hubei Province, the flagship store of Xiaomi Home, located in Chuhe Han Street, the most famous commercial street in the country, was opened. This three-storey flagship store, which is the largest in the country, sells all kinds of products such as mobile phones, computers, rice cookers, electric toothbrushes and even towels. The minimum inventory units (SKUs) other than mobile phones add up to more than 700. . Besides, this is just a mobile phone shop, it is completely inappropriate. It looks like an IKEA & mdash; — there are even sample rooms in the store.

Lei Jun’s ideal model for offline stores is Muji: the variety of products, the design and display of merchandise, the preference for shopping malls, and the sales model. He also hopes to cut like MUJI. Dismiss the middleman & rdquo;, personally operate the store.

These practices are different from the traditional offline distribution mode of mobile phones. Taking OPPO and vivo, which are the main online market share companies, as an example, the two companies pursue a three-level proxy model from “National” to “Land” and then to “County”. “Sometimes there will be more levels”, a living employee who told the “First Financial Weekly” that those agents usually open the store on the street where the mobile phone brands gather, and the products in the store are basically mobile phones.

The diversified merchandise structure and location strategy make Xiaomi's home look more attractive than OPPO or vivo's offline stores, but its market coverage is limited. Xiaomi originally hoped to sink to more third- and fourth-line markets with weak online shopping habits through this model. However, according to its third-quarter earnings report, Xiaomi’s 499 millet homes in mainland China are mainly distributed in the first and second lines. city. According to the information provided by Xiaomi Public Relations Department to "First Financial Weekly", Xiaomi will not increase the number of such stores.

This allowed the actual number of Xiaomi's home to achieve only half of Lei Jun's original goal. At the Yabuli Forum in February 2017, Lei Jun had proposed to open to 1,000 Xiaomi Homes in “3 years”. A large part of the millet house that has been opened is actually invested by franchisees. Xiaomi officials have never disclosed the ratio of this model to the fully self-operated Xiaomi home, but Sun Yanxi, the director of the First Mobile Research Institute, told CBN Weekly that Xiaomi has only retained a few sample shops in some cities. Self-operated, the rest are funded by franchisees, and Xiaomi sends a team to station. According to the data he provided, each franchisee must spend at least 1 million yuan to join a store.

“Millet store” When the project was first established in 2016, Xiaomi is looking forward to joining this business with its hundreds of millions of meters of rice. Xiaomi store has set a very low threshold for franchisees, and even a college student without any savings and no stores can open a small mill. But the people who actually joined the business later were not Xiaomi's "ideal candidates", or rice noodles.

Xinzhou District, 40 kilometers away from downtown Wuhan, is a county with a resident population of only 200,000. Xie Wendong, who lives there, is the first franchisee to contact Xiaomi. Before that, he already owned a shop of about 80 square meters in the local pedestrian street. The company mainly sells LeTV. Considering that the introduction of millet products may bring new passengers to the store, he signed up to apply for a Xiaomi shop.

The process of opening a store is relatively smooth. Xie Wendong said, “It is to scan a QR code. There are dozens of questions to see if you agree with the brand concept. If you pass 80 points or more, it will be especially simple. & rdquo; After that he received an account, used to log in to the Xiaomi store's web page back to stock.

Xie Wendong started to choose more than 80 items, but so far he still sells only a small love speaker, a few millet TVs, and more than 20 products that don't take up a lot of space, such as towels, rainbow batteries and signature pens. These products can bring passengers to him, but “it's really not making money from the perspective of our merchants in pursuit of maximizing profits”. Xie Wendong said that he compared LeTV products that he had operated and OPPO and vivo with 30% margin space across the street.

Different from other mobile phone brands, according to the mode of getting the goods at the secondary or tertiary channel price, Xiaomi offline stores adopt the rebate mode and mdash; — Xie Wendong first gets the goods according to the price of the background, and the price is online. At the time, the retail guide price marked, after the sale of the goods, will be able to get "revenue" in the next month. He showed reporters the back-end operating system of Xiaomi's shop. If you click on a mobile phone with a retail price of 999 yuan, you will jump out of the pop-up window and tell the merchant that the income is 180 yuan. The profit of selling a rice cooker at the price of 999 yuan is 149 yuan. It seems that this "return point" is not low, but Xie Wendong still shouts not to make money — — the problem is that Xiaomi does not have a "price insured" strategy.

“ I sell 999 yuan for a mobile phone, but Jingdong may only sell 699 yuan for activities. I can only sell at a reduced price. So even if Xiaomi returns to me 180 yuan, in the end we actually don't make money at all. & rdquo; Xie Wendong said. At the same time, the franchisee of Xiaomi shop is not optimistic about the penetration of Xiaomi in low-tier cities. — In Xinzhou, a county with a monthly income of 2,000 yuan per capita, I want a family to accept new things like IoT. It is still an unrealistic thing. Some of his customers will buy a small love speaker of 299 yuan for fresh and fun, but after a month or two they become idle items at home.

Xiaomi wants to sell mobile phones by rice noodles. After all, only those who understand Xiaomi and believe in the brand concept of Xiaomi can better sell their products through word-of-mouth marketing, but Xie Wendong is not such rice noodles. Sometimes for business considerations, he will also “Operate” to open more. For example, when Jingdong cuts prices, he will get goods from Jingdong, or open a store on Taobao, and sell the inventory in the store to customers in Jiangsu and Zhejiang provinces. Some real estate developers like to get goods from him, both invoices and prices. Later, Xiaomi official also deliberately played down the active spread of Xiaomi shop.

Yan Fuyong is also a Xiaomi franchisee in Wuhan. Unlike Xie Wendong, he has already bid farewell to the junior store model of Xiaomi Xiaodian and has a Xiaomi authorized experience store.

Yan Fuyong is optimistic about Xiaomi, “although the profit margin is small, but the amount is large, the level effect can also be high. "He told the CBN Weekly that the OPPO and Vivo practices would be more and more attractive to him.

Yan Fuyong is actually from the Xiaomi store "promotion" to become an authorized store. His performance during the Xiaomi store was not bad, which caused the attention of the store management team under Xiaomi. In August of this year, Xiaomi Company sent a provincial manager to visit his store several times and took the initiative to upgrade the direct supply point of Yan Fuyong to Xiaomi authorized store. The authorized store model enjoys the “insured price” policy —— when the online price is lower than the price of the goods, the company can sell according to the online price, and the company subsidizes the difference.

However, in order to become an authorized store, it is necessary for the agent franchisee to purchase a product worth 400,000 yuan in one time. Moreover, although Yan Fuyong believes that Xiaomi's “new retail” is more promising, he feels at a loss in the specific store operations. “I don’t know how to do it. I didn’t want to understand it. Maybe Xiaomi didn’t think too well. & rdquo; His do not understand including a full range of business methods from the structure of the goods, in-store display, dynamic design and marketing. In the end, what should be done in each link, in the end, almost Fu Yongyong himself explored a little. During the entire store opening process, Xiaomi’s store operators only provided a standardized set of shop renovations for his reference.

If the business is good enough, Yan Fuyong intends to open a few more stores, but he is not very happy that the authorized store that he is working hard will also bear the so-called "offline experience" role —— those customers come to the store I can't just buy it, but it is a zero contribution to his business.

The “stored goods” formed by the authorized store level has caused the price of millet commodities in many areas to be chaotic, and the wide variety of store images has made it difficult for consumers to form brand awareness. However, these problems are currently not in Xiaomi's task management list. The goal of Xiaomi at this stage is to open up more shops operated by agents. “ At least there is currently no cap. & rdquo; After Xiaomi announced the third quarterly report, the above-mentioned Xiaomi public relations department told the "First Financial Weekly".

#“Eco-chain”Company: Users, Users, Users#

The SKU for the Xiaomi offline store is more than 200 millet <; ecological chain & rdquo; company.

Tong Shihao, managing partner of GGV Jiyuan Capital, first listened to Lei Jun’s suggestion that the word “ecological chain” was in September 2013. At that time, he participated in the Global Mobile Internet Conference (GMIC) in Silicon Valley. Lei Jun and Shun Capital jointly found him and talked about an upgrade story of Xiaomi.

“At the time, he mentioned that he wanted to be the Xiaomi ecological chain. We all think that this idea is very good. Because Xiaomi already has a brand effect, everyone is used to buying things in its App or Xiaomi Mall. If we can add more products, we I think this model is worth exploring. & rdquo; Tong Shihao said to the "First Financial Weekly".

According to Lei Jun's idea, Xiaomi can use the smart phone as the core to create an ecological circle. On the periphery of the mobile phone, it can also construct a smart home circle layer and a lifestyle consumable circle. The intelligent hardware in these products can all be controlled by MIUI, which not only can expand the number of users on the millet market, but also play a role in the frequency of physical store-to-store frequency —— compared to towels or batteries, people may I will change my mobile phone once in a year or two.

Among all the products, Xiaomi only designs and produces a few items such as mobile phones, TVs, routers, and smart speakers to stay focused. Other smart hardware products such as mobile power, desk lamps, rice cookers, water purifiers, or lifestyle items such as towels, batteries, and electric toothbrushes are handed over to the eco-chain company. Xiaomi will give its products, product design, supply chain resources, sales channels and successful experience to these companies.


In the Xiaomi store, only a few items such as mobile phones, TVs, routers, and smart speakers are designed and produced by Xiaomi.

Most of the companies that Xiaomi and its investment team have incured are “starting companies”, which are “starting companies”. They use “my m” as their brand name, and some of them form a company form when they receive investment. No. For example, the production of mobile power purple rice is the result of the "proposition composition", its founder Zhang Feng was originally the general manager of Nvidia, after talking with Lei Jun and Liu Deqian, Zhang Feng accepted the two millet founders thought Let him set up a company to develop mobile power.

This model has great advantages at the beginning. Under the guidance of Xiaomi, some eco-chain companies quickly took out the first “exploding product”.

On the 8th of April, 2015, the Huami Bracelet, one of the most famous products of the Xiaomi Eco-chain, achieved a sales volume of 208,000.

The first product released by TS Glasses with the Xiaomi platform is its nylon polarized sunglasses that participated in “Millet Crowdfunding” in February 2017, achieving 1130% completion. Two months later, it officially joined the Xiaomi ecological chain. “ When Xiaomi meets with us, we often remind us to do the basic disk first, that is, you first do ‘ single product explosions & rsquo;, do not consider too many other things at the beginning. Yan Jin, general manager of TS glasses, told China Business Weekly that the biggest suggestion that Xiaomi provides to the eco-chain company is that the first product must “break through”, that is, to quickly occupy the market through low prices. There is no room for survival in competitors' products.

According to Xiaomi's product positioning suggestion, the first product of TS glasses is selected to be a sunglasses that does not require offline optometry. The price is set at 199 yuan, because according to Xiaomi's online business experience, “customer unit price exceeds 200 yuan. , sales will drop by 70%”. In the procurement process, Xiaomi added TS glasses to the joint purchase list of silica gel, such as mobile phones and bracelets. This makes the sunglasses match the suppliers of high-end competing products in the market at the beginning, and the cost is higher than the other party. low. Because of the sales platform provided by Xiaomi, the first production order, the TS glasses will be opened to the order of 100,000.

Shenzhen Yunmi's first water purifier is also a process that learns Xiaomi to re-examine all aspects of the supply chain, cut down those parts that can be “cost down”, and improve those designs that have a poor experience. . In the end, it changed the assembled waterway in the traditional water purifier to the integrated waterway, which not only solved the problem of easy water leakage in the assembled waterway, but also reduced the injection cost through the large-scale procurement of the millet platform, at an average price of 5,000 yuan. In the water purifier market, Yunmi has produced a product with a price of 1999 yuan for the millet platform.

These companies and products have been in preparation since 2013. When the Xiaomi House opened its store in 2016, it will be available for sale immediately. After that, the shelves of the shop under the millet line are hard to come out.

But not all products are as easy to re-examine costs and designs as mobile phones. “Some products have natural inventory turnover problems, such as clothing, as well as seasonal and fashion trends. I have higher operational efficiency and cannot guarantee that it is like a fan (long sales), then its cost-effective gross margin is Must be bigger than the fan. ” The founder of an eco-chain company that did not want to disclose the identity of the company told China Business Weekly.

Small ants that produce cameras can't do this either. “We said that you should quickly penetrate the market with a lower price and faster response, but the other party did not follow our logic, and its pricing is very expensive. If this is the case, it will not be broken down. It should have sold two or three billion yuan a year. Now it is still on the hundreds of millions. ” Xiao De, co-founder of Xiaomi, who was responsible for the ecological chain business, said in an interview with China Business Weekly in November 2016.

According to the investment agreement, Xiaomi will customize some products in these companies by means of project establishment. The relevant person in charge of Xiaomi ecological chain products will participate in the project establishment. If it is the product of the ecological chain company's own brand, they will have more autonomy. In other words, choose to sell in the Xiaomi channel, do "Maijia", OEM products, to comply with the profit margin setting of 5% of millet, products that do not sell through the millet channel need to establish a separate brand, the ecological chain company is free Pricing, but in principle still have to be consistent with the value of Xiaomi's “low profit margin”, at least with the same industry quality products in the same industry in terms of profit margins.

With this “right”, these companies have chosen to set up their own high-end, higher-margin private brands outside the Xiaomi platform. The manager of Yunmi Guangzhou Zhengjia Plaza Store told the “First Financial Weekly” that Yunmi has developed a water purifier with a price of 4,999 yuan in addition to the custom-made 1999 yuan water purifier. Both products use almost the same water purification technology, but use different materials in the body consumables and carbon water and other water purification supplies —— this is actually back to the traditional model of marketing drive and layer-by-layer agent to increase market share. Go up.

“We think that the (ecological chain) must be good for Xiaomi. If it is good for Xiaomi Ecological Chain Company, it depends on their own creation. ” Tong Shihao said. Jiyuan Capital finally invested in 4 of the Xiaomi Ecological Chain Company, including Pure Rice, Zhimi, Zi Mi and Jiayi Lianchuang, which are rice cookers, humidifiers, mobile power supplies and headphones. Of the four companies, only Zi Mi has extended its business from mobile power to “battery experts”, and other companies have not yet jumped out of the “single product victory” stage.

The supply chain chain that Xiaomi built from the beginning of investment to the product shelf is bigger and difficult to manage effectively than it was originally imagined, but this is a step that Xiaomi has to take.

The eco-chain company provides multiple hardware and is connected with Xiaomi's “offline store” strategy. The common goal of both is to help Xiaomi continue to expand the number of users. If these products have “artificial intelligence” attributes, then In the end, at the level of Internet services, Xiaomi and eco-chain companies will have more room for realization.


After the large-scale expansion of offline channels and investment in eco-chain companies, Xiaomi's mobile phone sales, total revenue and user base all rebounded or increased in 2017.


Xiaomi is fully replicating its myth of mobile phone sales in China in the Indian market. This is also one of the important factors that Xiaomi has completed the U-shaped comeback in the past two years.

Xiaomi’s third-quarter earnings report showed that the monthly active users of the MIUI system exceeded 224 million. Through the sales of eco-chain products, Xiaomi has won more new customers from non-millet mobile phone users. According to the latest data from the third quarterly report, the equipment connected to the Xiaomi IoT platform (excluding mobile phones and laptops) is about 132 million pieces. The new generation of IoT central point AI Intelligent Voice Assistant “Little Love Classmates” has more than 34 million monthly active users. In addition to the users of Xiaomi mobile phones, there are also a large proportion of these people who are iOS users.

In terms of real value, these new users are more likely to contribute to Xiaomi's user-activated device. In the future, these activated devices may be able to string together more complete behavior data of users. But it takes time to predict. “IoT end needs multi-category, multi-form and even cross-industry reasons. It needs mobile phone companies to have a strong market integration, standard coordination, investment layout and long-term investment capability in the mobile phone market, in order to achieve the IoT field. market status. & rdquo; Nielsen Communications and Technology Research Director Gao Bin said.

Even if the profitability of the Internet service level is a relatively distant dream, Xiaomi has now exchanged revenue from the business platform of the “new retail” section of the business model by providing sales platform services for these eco-chain companies. An operator of Mijia App disclosed to CBN Weekly that half of the gross profit of the eco-chain sold by Xiaomi's own channels belongs to Xiaomi, “sometimes high projects, Xiaomi can still achieve 60%. The gross profit is drawn into ”. Xiaomi is still an absolutely strong party in this cooperation.

It seems that the company is returning to the right track. However, Zhang Yong’s confidence in the company did not come back. “My boss is still telling me how many billions of revenue for the entire project team, and how much I should share in my group. …… & rdquo; Zhang Yong said that the name is still OKR.

Lei Jun is actually aware of the problems facing the company. After completing the listing on the Hong Kong Stock Exchange on July 9, Lei Jun began a management change to the company in order to operate Xiaomi's Internet business more finely and ensure a balance between commercialization and user experience.

First, on July 23, Xiaomi appointed Yan Kesheng, the vice president of the original mobile phone department, as the vice president of the group and also the chairman of the group quality committee. Yan Kesheng is a staff member of Xiaomi No. 53. He internally commented that he “speaks very straight” and previously worked in Motorola's mobile phone R&D department. The new appointment extends Yan Kesheng's authority from the quality management of hardware such as mobile phones to the user experience at the Internet service level. This role is said to be "all the time", the role is to try to reduce the erosion and damage to the user experience of the commercialization of millet.

Then on September 22, Xiaomi announced that “the biggest organizational structure change since the establishment of the company”: newly established group organization department and staff department, and split the original MIUI department and mutual entertainment department into four Internet business departments. Focus on MIUI experience, app store, news, video, etc. The MIUI Experience Department no longer assumes the responsibility of realizing the Internet, and is only responsible for “doing things right”. Applications such as app stores, news, videos, etc., which are related to the realization of the Internet, report directly to Lei Jun.

Before leaving, Zhang Yong knew that Xiaomi had to make greater structural adjustments to MIUI. The pre-production of this adjustment has even begun in the first half of this year. He agrees that this round of reform is the hope of Xiaomi, at least in the big direction, "In the past, the internals were intertwined, and now it has been loosened, and the business line will become more clear." But in the end he chose to leave. “Some issues are not resolved at the architectural level. & rdquo; Zhang Yong said.

Chen Yanning, who joined Xiaomi in 2017, also expressed the confusion of the so-called participants who were the same as Zhang Yong. “The mobile phone itself is not making money, and the sales of the retail channel are not very high, then the MIUI becomes a profit center. & rdquo; He told the "First Financial Weekly".

Both Chen Yanyu and Zhang Yong believe that if they develop a better environment for products, let them lessen some commercial pressure, focus more on the products themselves, develop products with more long-term value, and even make more The explosion-proof application that all users of the whole network are welcome, Xiaomi's "Internet realization" space can be bigger.

In addition to the MIUI system, Xiaomi has also developed reading software, instant messaging software, rice chat, information software Xiaomi information, and millet calculators, games and other applications, in which rice chat was born earlier than WeChat, but these applications Among them, only the Xiaomi calculator is a cross-platform product. "First of all, you have to cross the defense between mobile phone manufacturers, and secondly, for information applications, you have to use a headline of today's headline to do this, the Internet model can be successful. & nbsp; Chen Yanning said that the Internet application market is as competitive as the mobile phone market.

Nearly 70% of Xiaomi's 200 million users hold red rice series phones with a unit price of less than 2,000 yuan, and most of them are men. They may be active payers of mobile games, but in the more potential content of e-commerce, reading, film and television, these users have limited willingness to pay. Half a month ago, Xiaomi won the brand license of Mito's mobile phone business, also to increase some female users.

Xiaomi's employees are very envious of Apple's healthier and more comfortable model. The hardware itself is highly profitable. In the environment of iOS, which has a better paid order, the software level can be fulfilled with more peace of mind. Constantly improve the user experience & rdquo; this mission.

However, Lei Jun never regarded Apple as a benchmark company for Xiaomi. He is very diligent and thinks he has the ability to make a model based on his understanding of the market.

Until leaving Xiaomi, Zhang Yong said that he still agrees with Lei Jun's philosophy, and does not feel that Lei Jun is not sincere in his heart every time he talks about his ideals. In his view, the management problem exposed by Xiaomi at this stage is actually that the above people have a good idea. When they are conveyed to the middle layer, there will always be some profit delivery or personnel problems, resulting in the final deformation of the action. .

“This situation has become very serious since the listing of Xiaomi was put on the agenda. Some things inside can't be said directly, you know what I understand, but you can't talk directly. I don't know why, it's weird. For example, when something is not done, you can't say it directly. ”

(At the request of the respondent, Zhang Yong and Chen Yanyu in the text are pseudonyms.)

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