LIVE FROM APAC INNOVATION SUMMIT, HONG KONG: Lin Bin (pictured), co-founder and president of Xiaomi, gave an insight into the secrets behind the company’s fast rise up the smartphone rankings, but scotched speculation the Chinese device manufacturer will file for an IPO anytime soon.
Bin claimed that competition in the smartphone market is now so intense, that one generation of success does not guarantee success in the next.
“The biggest challenge for us is if we can push innovation and low prices on a yearly basis,” he said. “Technology innovation of course is the most important element for success.”
One thing that Xiaomi’s boss says allows the company to better understand its market is the fact it listens to – and acts on – customer feedback by updating features weekly. Every Friday at 5pm new features are added, which a user can install with the push of a single button.
“We embrace the power of the internet to let millions of customers be our product engineers.”
Lin said the company – until recently the third largest smartphone maker in the world before being displaced by the $2.9 billion Motorola/Lenovo deal – usually doesn’t look at profits and is instead focused on expanding its market share.
On the possibly of an IPO, he said there are no immediate plans to be listed. “We are very young and want to stay a startup as long as we can. We have a lot to do and there are so many areas we can look at.”
A vital component to its success, he said, is that adopting an e-commerce retail model allows it to reduce its channel costs to offer, for example, a premium model with high-end specs and a steel frame for $275. And on the low-end, it sells handsets for about $84.
He said a key differentiator for Xiaomi from the start is that it’s a mobile internet company, not a hardware company. “The internet is an open platform, it’s so open that word of mouth is critical to internet companies’ success. And word of mouth plays either way. When you put out a good product, it goes viral and spreads. When you put out a bad product, it goes viral even faster.”
Without good products with great quality, he said, it’s almost impossible to sell on the web.
Lin said it has seen some success in markets like India and Indonesia, but has slowed down the pace of its expansion as it tries to keep up with demand.
He said it was too early to say what will work in markets outside of China. “Our thinking is that we believe in taking our existing model to see how it’s accepted in other markets.”
The last four months have been very encouraging in India, where he said it has quickly sold out of the 200,000 units it is shipping there each week.
It is looking at large markets and is likely to move into Brazil and Russia next year.
Its R&D facilities are now in Beijing, but when it looks to expand, Lin said it will definitely consider Hong Kong – a plug for the conference organiser Hong Kong Science & Technology Parks.