Xiaomi, x-i-a-o-m-i.
How many of you have heard of it?
Sincerely. The truth is that, when I was in China
everyone was talking about Xiaomi.
If you go outside of China,
if you come here to England or Italy,
who knows about it apart from the experts?
Almost nobody.
But soon, very soon,
you’ll hear everyone talking about it,
even here in Italy.
And here’s why.
First, as of yesterday they’re listed on the stock exchange.
With a 100 billion dollar valuation,
one of the highest valuations,
the highest after 2014,
they’ll collect about 10 billion shares,
and this clearly will not go unnoticed.
Second, people will realize that they
don’t only produce cell phones, smartphones,
as some in the Italian media have written.
Of course they’re the fourthlargest smartphone manufacturer in the world,
so clearly they have a position there,
but they make much more
and that much more
they sell both online and offline in retail shops.
Let’s talk about retail.
Xiaomi is planning to open
2000 shops around the world, including China,
by 2019. Among these locations,
will be shops in England, in Europe,
and even in Italy, in Milan at the end of May,
the 26th of May I believe, they’re opening in Milan
and then they’ll invade the rest of Italy
with these monobrand shops,
which are like the Apple Store,
above all from the point of view of profitability
per square meter, that is, the profitability per square meter
is outmatched only by Apple
but is higher than brands like Tiffany, so
in short, they know how to make a square meter profitable.
Who is behind this company?
Behind this company is a figure
who in China is super famous, named Lei Jun,
who founded Xiaomi, can you imagine, after the age of 40,
which is great news for those of us over 40
and in a few years, he transformed this little startup
into a colossus
with 15,000 employees and growing,
and 15, 16 billion dollars in sales.
One important observation of the strategy used by Xiaomi,
and the idea is very simple,
is that they enter the market with very low margins
on hardware, so you can get
this gadget here at a super affordable price,
and yet it’s high quality, and the business goes on
to provide all the services they sell on top of it,
games, e-books,
financial services and investments,
Everything you can imagine
beyond hardware. Once you have
this gadget in hand,
that’s when they monetize everything else.
Another interesting consideration is
how they’re able to create so many products
so quickly.
Because if you go into a Xiaomi shop,
you’ll see that there’s the speaker, the IOT device,
the cleaning robot,
all high tech stuff, but a sea of products
each one different from the next,
things you didn’t even imagine existed.
They do it all with a simple but very effective strategy.
They accelerate and incubate a series of startups.
Just imagine it. Hundreds of startups
that make single products,
they take equity in each company
and provide each one with access
to their enormous online and offline platform.
A fun example that they told me about in China
is the case of this guy that was selling towels
made of a specific type of cotton,
antibacterial towels,
who made this deal with Xiaomi,
and he got access to the entire user base of Xiaomi
with this type of product and explosive sales,
it took off at $100 million per year.
Xiaomi, let’s engrave this name in our minds
because soon everyone will be saying it.
Because, as someone rightly pointed out,
it’s a bit like the Ikea of technology,
and it’s difficult to compete with the Ikea of technology,
because their consumer offering
is something that’s difficult to say no to,
difficult to ignore.
They offer premium products,
of the highest quality, at a non-premium price.
It’s an affordable price for everyone.
How many of you have heard of it?
Sincerely. The truth is that, when I was in China
everyone was talking about Xiaomi.
If you go outside of China,
if you come here to England or Italy,
who knows about it apart from the experts?
Almost nobody.
But soon, very soon,
you’ll hear everyone talking about it,
even here in Italy.
And here’s why.
First, as of yesterday they’re listed on the stock exchange.
With a 100 billion dollar valuation,
one of the highest valuations,
the highest after 2014,
they’ll collect about 10 billion shares,
and this clearly will not go unnoticed.
Second, people will realize that they
don’t only produce cell phones, smartphones,
as some in the Italian media have written.
Of course they’re the fourthlargest smartphone manufacturer in the world,
so clearly they have a position there,
but they make much more
and that much more
they sell both online and offline in retail shops.
Let’s talk about retail.
Xiaomi is planning to open
2000 shops around the world, including China,
by 2019. Among these locations,
will be shops in England, in Europe,
and even in Italy, in Milan at the end of May,
the 26th of May I believe, they’re opening in Milan
and then they’ll invade the rest of Italy
with these monobrand shops,
which are like the Apple Store,
above all from the point of view of profitability
per square meter, that is, the profitability per square meter
is outmatched only by Apple
but is higher than brands like Tiffany, so
in short, they know how to make a square meter profitable.
Who is behind this company?
Behind this company is a figure
who in China is super famous, named Lei Jun,
who founded Xiaomi, can you imagine, after the age of 40,
which is great news for those of us over 40
and in a few years, he transformed this little startup
into a colossus
with 15,000 employees and growing,
and 15, 16 billion dollars in sales.
One important observation of the strategy used by Xiaomi,
and the idea is very simple,
is that they enter the market with very low margins
on hardware, so you can get
this gadget here at a super affordable price,
and yet it’s high quality, and the business goes on
to provide all the services they sell on top of it,
games, e-books,
financial services and investments,
Everything you can imagine
beyond hardware. Once you have
this gadget in hand,
that’s when they monetize everything else.
Another interesting consideration is
how they’re able to create so many products
so quickly.
Because if you go into a Xiaomi shop,
you’ll see that there’s the speaker, the IOT device,
the cleaning robot,
all high tech stuff, but a sea of products
each one different from the next,
things you didn’t even imagine existed.
They do it all with a simple but very effective strategy.
They accelerate and incubate a series of startups.
Just imagine it. Hundreds of startups
that make single products,
they take equity in each company
and provide each one with access
to their enormous online and offline platform.
A fun example that they told me about in China
is the case of this guy that was selling towels
made of a specific type of cotton,
antibacterial towels,
who made this deal with Xiaomi,
and he got access to the entire user base of Xiaomi
with this type of product and explosive sales,
it took off at $100 million per year.
Xiaomi, let’s engrave this name in our minds
because soon everyone will be saying it.
Because, as someone rightly pointed out,
it’s a bit like the Ikea of technology,
and it’s difficult to compete with the Ikea of technology,
because their consumer offering
is something that’s difficult to say no to,
difficult to ignore.
They offer premium products,
of the highest quality, at a non-premium price.
It’s an affordable price for everyone.
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