Xiaomi Boosted the Smartphone Industry’s Efficiency

Oct 15, 2016

Lei Jun delivered the speech at the 2016 China E-Commerce Innovation and Development Summit, emphasizing that Xiaomi boosted the smartphone industry’s efficiency, and later expanded its operations to cover more areas, including power banks, fitness bands, and air purifiers. According to Lei, consumers in China are forced to spend more money if they want to buy quality products.

lei jun market

“The underlying reason is that the entire industry in China is inefficient ,” said Lei Jun. Companies spend a large proportion of money on marketing and sales promotion, squeezing the budget set aside to cover raw materials, design, and production processes”

On top of that, the smartphone maker reassigns costs by taking full advantage of the internet. It sells phones via its website, taking advantage of word-of-mouth style marketing. Lei said the in the first three years, the company’s marketing expenditure was close to zero; in traditional enterprises this expense accounts for roughly 30% to 40% of operation costs.

Xiaomi expanded that business model of efficiency to other fields. It is the world’s largest maker of power banks, self-balancing scooters, and air purifiers by volume – and it is the second-largest maker of fitness bands, according to Lei.

What I like about Lei Jun is he not conceal his principles. He said that base their decisions on. He is one of the few influential people in this area who has the power to recognize unjustified price increases due to ineffective advertising campaigns. Advertising and marketing is reinventing itself in this period. Customers are more informed and more cautious. They are no longer so easily convinced to buy a product. Even techniques based on subliminal messages do not generate desired results.

Lei Jun understand these changes and adapts. He broke away from the past and seek solutions adapted to current market requirements. Search, tests, analyzes. Gain confidence.

By Tudor
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Website: Tudor