Xiaomi – is this Business Model Maverick worth $100bn?

Updates

Xiaomi, the Chinese Unicorn, is looking to raise $10bn via an IPO this year, which could value it at up to $100bn. In this article, Simon Torrance, Futures Agency member and author of the New Growth Playbook, analyses its business model and draws out four key lessons for leaders in all sectors about how to generate rapid growth and value in an increasingly digital world.

Xiaomi is a maverick Chinese company with a maverick leader that defies easy categorisation.

Most people see it as a smartphone manufacturer that is on track this year to overtake Apple and Huawei to become the world’s second biggest after Samsung.

However it describes itself, in its IPO filing, as something rather different: ‘We are an internet company with smartphones and smart hardware connected by an IoT platform at its core’.

It does sell very high spec phones and devices, but at very low prices (and razor thin margins), and does so in order to create a marketplace for other connected products, digital services, entertainment and ‘lifestyle’ products and services. Mi.com is the third largest e-commerce site in China.

This is almost the reverse approach of Apple, which sells high spec phones at high prices and margin, using 3rd party apps to drive demand for its phone manufacturing business.

But like Apple, Xiaomi sees its future in services and the Internet of Things, based on a platform-enabled growth strategy, orchestrating an ecosystem of innovation around it.

Read the rest of the analysis here

 

Simon Torrance

Discuss