Xiaomi CEO reveals the secret behind its cheap smartphones


xiaomi

Xiaomi has become a popular manufacturer for offering its customers inexpensive products with good quality. According to the brand CEO Lei Jun, the secret lies in the fact that the manufacturer only has a profit margin of 8 to 9 percent.

For Lei Jun, the value of smartphones, in general, will become higher as brands focus on 5G technology. However, he believes that Xiaomi will be able to combine a competitive price with the high performance of its equipment.

While announcing the third quarter financial results of this year, Xiaomi CEO Lei Jun said: “I think the gross profit margin of 8% to 9% is very low and since our sales model is based on e-commerce sales, the pricing that the end customer ends up paying will be very cheap. The most important thing is that our own gross profit is very Low, and the middle channel is very short, so the final price in the retail market remains very attractive to the buyers.”

Xiaomi wants to keep prices low with the arrival of 5G

Xiaomi intends to maintain its sales strategy even with the arrival of 5G. Remember that Xiaomi is already the fourth best selling smartphone brand globally.

If the company keeps competitive prices coupled with quality, the end consumer also wins. And in the end, that’s what matters to anyone buying a new smartphone.

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15 Comments

  1. wodanesp mondial
    November 28, 2019

    It’s the price that counts in the end… Needs to be value for money. I considered my Redmi extremely good value for an unseen low price and am pretty certain that will remain that way when Xiaomi sticks to this policy!

  2. Finlay Dodgson
    November 28, 2019

    It is extremely good value for the pice, I have the redmi note 8 pro and it is the best phone I ever had!

  3. Imran Yaqoob
    November 28, 2019

    Been buying Xiaomi phones since I got a Redmi 3 Pro as a supplementary phone to play with(was using the Nexus 4/5) and was really impressed. Bought the Redmi 4 prime which became my primary phone due to its battery endurance(would’ve paid more for it after the Nexus 5x battery woes) and never looked back. Now using the Redmi note 5 pro and it’s so decent I haven’t replaced it since I bought it when it first came out, even though I normally liked to change phones every year.

  4. Amar
    November 28, 2019

    That Huawei do in the beginning but after become almost same cost as Samsung and iPhone than they become stiff and now going rapidly down. Probably they deserved

  5. Kendue Jones
    November 29, 2019

    I love xiaomi phones, I have the tedmi note 7 the best phone I ever owned! My next phone definitely will be a xiaomi phone!!

  6. Rudy Hernandez
    November 29, 2019

    9t pro and absolutely amazed w the quality and performance for the price

  7. vince rodriguez
    November 29, 2019

    but many annoying ads..:( (I thought i had a very good bargain with xiaomi redmi 7a i just bought recently with superb specs at low price…)

  8. ricky fusob
    November 29, 2019

    I have been buying Chinese phones (including Xiaomi) for years now because of the excellent value. The quality is surprisingly high and for a fraction of the cost of the large manufacturers. Alas, I just can’t do it anymore. The increasingly strident rhetoric spewing from the mouthpieces of the communist government combined with actions against the Uyghurs is just not tolerable. I will spend my money on products coming from countries which respect human rights.

  9. Aljosa Cebokli
    November 29, 2019

    It’s almost price dumping with this approach though and in the end will water down the high end flagship market and services such as Apples.

    The mediocre handsets will be getting cheaper in a race to the bottom, whilst the high end flagships will be more expensive due to the receding market share.

    I wouldn’t call it a win for the consumer necessarily.

  10. trebor robert
    November 29, 2019

    economics , choices is good for the business side .. if politics come to play..then China have an issue to address for the rest of the countries

  11. ljupco markovski
    November 29, 2019

    i bought my third Xiaomi and still is no.1 for a value vs money.

  12. Bilakos Gr
    November 30, 2019

    Xiaomi ♥️

  13. Lee A Dorney
    November 30, 2019

    Expensive doesn’t mean great, great value can be had at a lower scale like Xiaomi are producing and Samsung etc know this..some features aren’t being issued to phones now, like a Barometer even tho most phones are quite the same. If Xiaomi wasnt pushing the quality/price barrier where would we be ?

  14. Syed Huda
    November 30, 2019

    Well ! These types of cheaper but quality phone are vital for the common man otherwise 💥 the big brothers would have totak monopol. I request even the other 2nd grade companies to stay their ground.

  15. Eluzai Moyo
    November 30, 2019

    Xiaomi is and will ever be the best smartphone . I’m still using a Redmi note 4 but I could tell you that the features are extremely epic than many Samsung and Huawei latest models .