Xiaomi founder and CEO Lei Jun on Friday announced that the company sold 23.16 million phones in Q2 2017, an increase of 70 per cent from the previous quarter. At the same time, he said Xiaomi aims to touch the 100 million mark in 2018 on the back of quality products, seamless online and offline retail, and accessible pricing.
Xiaomi’s performance has been “especially encouraging” with respect to India where revenue in the first half of the year was up 328 per cent year-on-year so much so that it is currently the number two brand in the overall Indian smartphone market.
Lei Jun has written a letter to all employees to mark the occasion as also encourage them to work harder to achieve the company’s next goal.
Full text of Lei Jun’s letter to Xiaomi employees as translated into English:
Dear Xiaomi colleagues,
I was pleased to announce a breakthrough achievement at today’s smartphone all-hands meeting: we shipped 23.16 million smartphones in Q2 2017, an increase of 70% from the previous quarter, marking a record high for Xiaomi’s quarterly smartphone shipments. This achievement signifies a major inflection point in our growth — after two years of internal recalibration; Xiaomi is once again embarking on a rapid growth trajectory.
This is a truly significant milestone for Xiaomi — to date, no other smartphone company globally had been able to resume growth after a decline in sales. How were we able to achieve this?
1. Relentlessly pursuing technological innovation, striving for operational excellence with users at our core
Over the last few years, we have consistently increased our investment in R&D. Today, these investments are bearing fruit. In February, we launched Surge S1, our proprietary chipset designed and developed in-house, marking a breakthrough in our chipset technology capabilities. We have been unyielding in our pursuit of technological breakthroughs in other smartphone core components such as the camera, screen and battery. In April, we launched Mi 6 that has an optical zoom dual camera setup, which takes exceptional portrait shots. In May, we launched Mi Max 2, which achieved an incredible 31-day standby time in an endurance challenge. These are practical demonstrations of our technological capabilities. Last year, we applied for 7,071 patents globally; we were granted 2,895, of which half are international patents.
At the start of this year, I also personally spearheaded a committee to assess the quality of our products. After much internal discussions, we laid out the blueprint of our action plan and established a division solely focused on product quality. Our goal is to win through the “iron-fist” of quality!
Our recovery follows a year of setbacks that collectively signify the most challenging period in our company history. Smartphone sales softened as we struggled with two instances of supply issues, each one hampering our supply chain for several months. However, we were able to use this time as an opportunity to recalibrate many aspects of our business. Our Q2 shipment results reflect the improvements we have made in relation to the supply of our products.
2. Upgrading into a new retail model, successfully integrating online andoffline retail
As an Internet company, e-commerce is at the very core of Xiaomi’s retail strategy. While we continue to improve the customer experience on Mi.com, we also deeply value partnerships with other platforms. During this year’s “618” online shopping festival, we ranked number one in terms of smartphone sales on JD.com, Tmall, and Suning.
We have made great strides in our offline presence too. As of July 7, we have opened 123 Mi Home stores across China. Each store that we open receives such overwhelming reception that our revenue per square foot numbers are now industry-leading. On July 8, we expect to open another 14 stores!
3. Explosive growth in our global business as a result of three years ofInvestments
After three years of unwavering investment in our global business, this year has seen Xiaomi rack up successive wins as our global business crosses the inflection point of explosive growth.
Our performance in India has been especially encouraging — revenue in the first half of the year is up 328% year-on-year and we are now the #2 brand in the overall Indian smartphone market. Redmi Note 4 has become the highest shippedsmartphone in the country, and Xiaomi is now widely recognized as a leading brand. Elsewhere, we are seeing great results in Indonesia, Russia, Ukraine, and a number of other countries.
Competing for global market share represents the third wave of opportunity that will shape the Chinese smartphone industry. This follows the first wave of urban Chinese smartphone adoption and the second wave of new smartphone users from China’s third and fourth-tier cities. Seizing this opportunity marks the beginning of Xiaomi’s journey as a technology company on the global stage.
Why were we able to resume growth? The secret lies in Xiaomi’s businessmodel and our values!
Xiaomi has proven the resilience of our business model over the last 7 years, both through our incredible growth in the early days, and our reversion to growth after a period of recalibration.
We firmly believe that as long as we continue to befriend our users, produce exciting products with accessible pricing, and stay true to our core values of sincerity and passion, we will inevitably win users and the market!
Today’s accomplishment is not an easy feat. We offer our sincere gratitude to all of our Mi Fans for the trust they have placed in us over the years. We are grateful to our partners for their support, and especially to Xiaomi’s 13,000 employees and families for your dedication.
The smartphone market is brutally competitive, and we are only taking the first steps in our journey. In order to continue growing, we must keep true to our core values, and innovate relentlessly. We have to give our engineers the freedom to think outside of the box, and explore fearlessly without boundaries. We set no limit when it comes to innovation and investment. In the next 12 months, we will need to hire thousands of R&D talent for our smartphone business and further bolster our innovation capabilities.
I told everyone at the start of the year that the most difficult times are behind us. I also set a humble revenue goal of RMB 100 billion for the year. I am now confident we can achieve this goal. A new chapter for Xiaomi has just begun, and so many possibilities lie ahead of us. Our future is as vast as the constellations and beyond.
Finally, let’s just add another humble goal: to ship 100 million smartphones in2018!
July 7, 2017