According to foreign media sources, the listing case of Chinese mobile phone maker Xiaomi is in the process of accelerating, and Xiaomi may apply for listing as early as the first week of May. The company may raise $10 billion in the listing, and the company is looking for a valuation of $100 billion.
In addition, recently, Xiaomi founder Lei Jun promised that the comprehensive net profit margin of Xiaomi's hardware businesses such as mobile phones, Internet of Things and various ecological chain products will not exceed 5% this year. This makes foreign media believe that the small profit strategy has disappointed some investors.
The ultra-large valuation and financing plan have formed Xiaomi, which has been adhering to the slogan theory, and has the most beautiful convulsion this year.
And why does it dare to do so? Is it really worth the price? Xiaomi, whose external evaluation and internal experience are always lingering in a world of ice and fire, is going to play with the wind again?
"The entire Xiaomi brand has gone through a lot of hardships, and it has come step by step until no one makes our fakes and can stand up again. I think the brand is the lifeline for Xiaomi, and it is the trust of all users in us. ” On November 7, 2017, at the Xiaomi Investment Annual Conference, Lei Jun, the founder, chairman and CEO of Xiaomi, said in a speech.
This time, Lei Jun stood in front of the stage of the speech very seriously, and used PPT to preach the bitterness of the past two years: "In the global market rankings in the first quarter of this year, Samsung is the first, Apple is the second, and Apple is the third. It is Huawei, the fourth is OPPO, and the fifth is vivo, but I can’t find Xiaomi, Xiaomi and other companies have a common name called others.”
Who could have imagined that just three years ago, Lei Jun told Forbes reporters in high spirits: The only mistake in the past four years was to underestimate Xiaomi by a zero.
This time, Lei Jun wants to make this zero more round in the IPO.
Starting a business is not easy, and Lei Jun and the Xiaomi company founded in April 2010 have once again returned to their own outlets.
Millet, who is always in the wind, can be summarized as three stages of "wind - cold - wind".
It is possible that after the IPO, there will be another historical cycle.
Let's start with the wind:
The IPO valuation needs to break through 100 billion, but the net profit does not exceed 5%. The history of Xiaomi’s outlet is always pumping “wind” (Part 1: Wind)
one
A subversive journey of a steel plate
Lei Jun has a famous saying: "As long as you stand on the tuyere, even a pig can fly".
In 1992, Lei Jun, who was born in Xiantao, Hubei, graduated from the Department of Computer Science of Wuhan University. At the age of 23, he immediately joined Kingsoft Software. Jinshan is Lei Jun's first and longest job. Six years later, at the age of 29, Lei Jun became the general manager of Kingsoft Corporation. After 15 years, Jinshan went public, and Lei Jun was only 38 years old.
On December 20, 2007, Lei Jun resigned from the position of CEO of Kingsoft and began to invest in Lexun, Letao, Duowan, Duokan and Vanke Eslite as an angel investor...
At that time, Lei Jun was already tinkering with his own business plan. A story that is repeatedly quoted goes like this:
One day in early 2009, Lin Bin was sitting in a conference room in the Google office building in Wudaokou, Beijing. He is the vice president of Google China Engineering Research Institute, responsible for the research and development of Google Mobile and the localization of the Android system. His boss, Kai-Fu Lee, president of Google China, walked in and introduced a guest to him. This person is Lei Jun.
"In the beginning, we talked about the commercial cooperation between Google and UCweb... Later, we often made appointments, often from 8:00 p.m. to two or three in the morning, talking about the mobile Internet industry and mobile phone products. "Lin Bin still remembers that the most common place he and Lei Jun met at that time was in the cafe of the Pangu Grand View Hotel.
The two sat down facing each other, each took out a number of mobile phones from their bags, lined up on the table, and began to disassemble one by one. "And the waiter asked us, do you sell mobile phones?"
Lei Jun's knowledge and enthusiasm for mobile phones surprised Lin Bin secretly: "I can often get fresh prototypes that haven't been released yet. But I found that Lei Jun is more fanatical than me. We went out together, and I took out six or seven units in my bag, He is usually eight or nine."
The story of taking out several mobile phones from the bag was actually staged in front of several Internet practitioners before Lei Jun founded Xiaomi.
Lei Jun is discovering opportunities and partners. In October of that year, Lei Jun sent an invitation to Lin Bin, who had been in close contact with him, to start a partnership.
In April 2010, Lei Jun finally joined forces with Lin Bin, former vice president of Google China Engineering Research Institute (who had participated in the creation of Microsoft Asia Engineering Institute and served as engineering director), and Zhou Guangping, former senior director of Motorola Beijing R&D Center (hosted by Design "Ming" series mobile phones), Liu De, former director of the Industrial Design Department of University of Science and Technology Beijing, Li Wanqiang, the former general manager of Kingsoft Powerword, Huang Jiangji, the former development director of Microsoft × × ×, and Hong Feng, the former senior product manager of Google China, co-founded Xiaomi Technology , and announced its own brand mobile phone - Xiaomi mobile phone in August 2011.
two
Make mobile phone with internet mode
How to seize the mountain in the mobile phone market that is already a red ocean? In 2011, China's mobile phone market was still dominated by feature phones. The price of international big-name mobile phones is as high as 4000-5000 yuan, and "China Cool Union" is concentrated in the operator's customized phone market. Xiaomi chose to use the Internet model as a mobile phone.
However, Xiaomi was not successful at the beginning, or used a successful case to prove the failure of model selection.
At that time, the iPhone's application model became the common choice of all manufacturers who wanted to make Internet mobile phones. Lei Jun is no exception. Before the launch of Xiaomi's mobile phone, Lei Jun was also building his own application system. However, unlike others who made a big push into the application store, Xiaomi chose the vertical incision of social networking.
At the beginning of Xiaomi's establishment, there were always three or four people working on a communication product called "Xiaomi Tong". Then, in October of that year, Kik, a social app based on the mobile phone address book, appeared in major mobile app stores and gained millions of users within 15 days. Xiaomi found a breakthrough in it.
Two months later, Xiaomi released China's first product that mimics Kik, Mi Chat. One month before the official release of Xiaomi phones, Mi Chat users reached 4 million. At the same time, these users have also become the first generation fans of Xiaomi mobile phones. This is a successful case, at least at the marketing level.
If there is no WeChat, perhaps Xiaomi will move towards the application ecosystem. But just a social application is too fragile.
In January 2011, Tencent released WeChat, and on October 1 of that year, WeChat became the number one instant messaging tool software. In January 2013, Xiaomi Corporation announced through its official community that Lei Jun, Chairman and CEO of Xiaomi Corporation, opened the official WeChat account, and Lei Jun will release the latest news related to Xiaomi through his WeChat official account.
The war between Mi Chat and WeChat is over, and Xiaomi's rise has slipped from the application entrance to the hardware entrance.
Lei Jun said that Xiaomi's entire business model is for high quality and high cost performance. This feature was particularly evident in the initial stages of Xiaomi mobile phones.
It may be more convincing to use the opponent's evaluation. Zhou Hongyi is such an opponent. As the chairman of Qihoo 360, a geek in the Internet field and a person who is sometimes demonized, he was very objective in a keynote speech in August 2014, using the success of Xiaomi mobile phones to interpret his own hardware failure.
Zhou Hongyi claims to be the person in China who values Xiaomi phones most besides Lei Jun.
In the comparison, he pointed out: "Everyone said to pursue the ultimate. Note that the pursuit of the ultimate is a single-point breakthrough. You can see that when Xiaomi sells mobile phones, it does not copy all the indicators. The dual-core 1999 has covered everyone. Single point Breakthrough, the ultimate product you make is not perfect... When you buy a mobile phone
Wait, why can you buy eight cores but not quad cores for the same concept, and you can buy quad cores but not dual cores? I tell everyone that the cost of dual cores, quad cores, and eight cores is the same, but he thinks 8 is bigger than 4. "
Although he is also a fellow from Hubei, Zhou Hongyi's words are full of ridicule, but this is actually the best way to dig out consumers' wallets in the smartphone war.
This is not a generalized Internet thinking, but an operational Internet model.
three
User thinking, participation typhoon
It is undeniable that the Xiaomi series of products represented by Xiaomi mobile phones fully embodies Lei Jun's famous "Seven Words of the Internet" - focus, extremeness, reputation, and speed.
"I just spend almost all the money on one or two models and sell them in a huge quantity, so that the R&D cost allocated to each product is relatively low. Let me give an example, some colleagues spend 10 million yuan. To make a mobile phone, I invest 100 million yuan a year to make 100 models. I directly invest 100 million yuan to make only one model." Lei Jun's interpretation of the ultimate single product is closer to
price level. The truth of the ultimate single product, a steel plate art that breaks down consumers' desire to buy steel plates, is not a simple summary of high cost performance.
Among the stories of Xiaomi, the "Sense of Participation: The Internal Manual of Xiaomi Word-of-mouth Marketing" published in 2014 by Li Wanqiang, the co-founder of Xiaomi, attracted the most attention.
Lei Jun enthusiastically used the title of "Behind Pigs Can Fly, Participation Is "Typhoon", wrote the preface for the book, and explained: "Everything should "follow the trend", if the entrepreneur is likened to "lucky" Pig", the general trend of the industry is a "typhoon", and the participation of users is also a "typhoon".
But in fact, the sense of participation is not simply used at the marketing level, but more at the product level, which is to implement Lei Jun's seven-character formula, in other words - user thinking.
User experience thinking takes the user's biggest consumption desire as a breakthrough point and conducts key attacks.
The appearance may be packed with geeky colors. For example, Xiaomi itself likes to release some “cheap products” that seem very geeky, such as a matchbox-sized action camera, a socket-sized Xiaomi small box, and enough power for three months. Xiaomi Mi Band.
And this kind of geek color is very popular with consumers, because it can be a geek at a very cheap price, although in the eyes of a real geek, it is not worth a slap. But for young people who advocate personalization, showing off in the circle of friends is also worth the price.
In itself, geeks have the color of showing off. Technology is actually second, and practicality is third.
And Xiaomi changed the order, showing off first, practical second, and technology third.
A high-tech color of Xiaomi has taken root in the hearts of consumers against the backdrop of many Xiaomi mobile phones in the general public version and various Xiaomi equipment with rich geek colors. As for what the industry thinks, it is not important. Consumers generally do not look at the industry. Comment.
Among the early products of Xiaomi, it may be the Xiaomi bracelet that can represent this thinking.
As an early example of the Xiaomi ecological chain. Before being invested by Xiaomi, Huami was still a company called Zhizhi. Its main business was tablet readers and Internet distribution. The team was stationed in Hefei all the year round. The boss is Huang Wang.
On July 22, 2014, Huami's products, in the name of Xiaomi Bracelet, made a high-profile appearance at the Xiaomi new product launch conference. With an ultra-low price of 79 yuan and a standby time of up to 3 months, these two extreme single product concepts , instantly broke down the steel plate that consumers want to buy.
As for the black, orange, red, green, blue, and blue wristbands, that is already a secondary content.
What has the Xiaomi Mi Band changed? Not much has changed, just pulled wearables from geek toys back to the world. In the past, bracelets, which cost hundreds of thousands of yuan, and whose power was not very durable, suddenly became a mass consumer product.
As for the function, it is still a pedometer + sleep detector, and how strong the effect is, this is justified.
The cases of Huami and Xiaomi bracelets actually fully demonstrate the style of the Xiaomi ecological chain. According to Lei Jun: Invest in the ecological chain, invest in some start-ups, or invest in some big companies and let others do it. According to my interconnection requirements, it is OK if they can be connected together. I will choose some good ones and sell them for you on Xiaomi.com.
But to sell well, user experience thinking will determine its ultimate fate. Compared with other Xiaomi ecological chain products, the bracelet still maintains the characteristics of explosive models.
The data shows that in the first quarter of 2017, the market share of Xiaomi Mi Band topped the world's top, becoming the world's largest wearable device manufacturer. At the same time, Xiaomi said that 1 out of every 7 people who bought smart wearable devices in the world bought Xiaomi. wristband.
Four
E-commerce is the big outlet for Xiaomi
In 2011, Xiaomi's sales revenue was 550 million yuan, which jumped to 74.3 billion yuan in 2014.
In the eyes of many people, the key to Xiaomi's success is high cost performance, including foreign media. In 2014, the website of The New York Times in the United States used the title "Xiaomi, an empire built by imitating Apple", and described it as follows: Lei Jun has always taken Apple as his learning object and established himself as a follower of Jobs. He's still selling millions of iPhone-like smartphones... The company's product orientation is for young, highly educated people who want to buy a smartphone but can't afford an expensive one. A Xiaomi phone user said: "I choose Xiaomi because this phone is cost-effective."
Of course, at the same time, this report also admits that the key to Lei Jun's ability to attract a large number of believers is that Xiaomi Technology is the fastest company in the Chinese market to reach the $1 billion annual revenue mark. Even Amazon took 5 years to achieve this. this goal. At the same time, Xiaomi is still profitable.
Is cost-effectiveness really Xiaomi's killer feature? In a 2017 article titled "How Xiaomi Successfully Reversed", Lei Jun gave a more precise answer when he reviewed Xiaomi's ups and downs:
Xiaomi's entire business model is for high quality and high cost performance. High cost performance is an efficiency revolution. To improve efficiency, under the market conditions at that time, only e-commerce can achieve the efficiency that Xiaomi wants.
Pan Jiutang, who became a partner of Xiaomi's Industrial Investment Department in 2017, has previously endorsed the Xiaomi model as an analyst. He gave an example in 2012: For a mid-to-low-end smartphone costing about 500 yuan, due to advertising, retail store rent and labor costs, the increase in prices for agents and retailers was about 300 yuan and 500 yuan, respectively. The retail price of 1500 yuan, almost tripled!
At that time, it was the stage when Xiaomi mobile phone just subverted the inevitable high price of high-end mobile phones in traditional channels with the high cost performance of 1999 yuan in e-commerce channels. "Last year's price of 1,999 yuan was indeed our cost price at that time." Behind Li Wanqiang's vowed words is the rapid expansion of Xiaomi.com in the e-commerce field.
E-commerce channels can sell mobile phones at half the price compared to traditional channels. This became the consensus of the mobile phone industry at that time, and almost all mobile phone manufacturers began to move towards the e-commerce model, but Xiaomi first stood on the wind and obtained the greatest benefit release.
In this regard, Zhou Hongyi once had a classic statement:
All mobile phones sold through offline channels are very expensive, because the channel has to make money, and because there are marketing costs, the price of selling on the Internet can be cut by half. Sometimes I am not afraid of teammates like gods, but I am afraid of opponents like pigs. I often say why Xiaomi has developed to this day, and has no rivals for a year and a half? Because no one dared to follow up and launch a mobile phone with the same configuration and the same price.
To this day, Lei Jun still feels lucky about the opportunity at that time: in 2010, a small startup company made a mobile phone with 30 million yuan and entered the most competitive industry in the world...
The mobile phone industry is generally priced at 2-2.5 times the cost price, which is the offline market that you need to spend a lot of money to do. It turns out that we can do e-commerce with close to zero gross profit.
Since 2014, Xiaomi began to speak out through different channels, claiming that since its establishment in 2010, Xiaomi Technology has become the third largest e-commerce platform in China in less than four years. "In 2013, Xiaomi has become the third largest e-commerce company in China: Xiaomi's annual sales of technology were about 31.6 billion yuan, and the annual sales of mobile phones were 18.7 million units. In December 2013 alone, Xiaomi achieved sales of about 3.23 million units."
In this widely circulated official press release, there is another sentence that is quite eye-catching: "When Lei Jun decided to start Xiaomi Technology four years ago, the e-commerce channel had considered third-party e-commerce, such as Vanke, but In the end, I decided to build my own e-commerce channel, and now it has become the core competitiveness of the entire Xiaomi, which is somewhat unexpected by Lei Jun.”
Success may be accidental, but it will also become a shackle after the rise.
Even as Leslie Cheung sang: The wind continues to blow and I can't bear to stay away... (To be continued)
The theme of the next issue - A brief history of Xiaomi outlet (middle): cold