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The astonishing numbers of Xiaomi, Mobile and Ecommerce in China

13 Dec 2013

Xiaomi

 

Among all the panels of LeWeb 2013 in Paris, one was particularly standing out, bringing facts and figures unknown to the most part of the audience, such as the figures of mobile and e-commerce in China.

We’re speaking of the interview to Hugo Barra – former Google VP for Android and current VP for Xiaomi Global.

He gave some really interesting insights on the state of the art of digital and mobile in China, also helping us in understanding why Chinese tech and Internet companies are unstoppable.

 

The Xiaomi model

Xiaomi is a software company making very successful Android smartphones, such as Mi3 – Xiaomi’s flagship product currently running the fastest processor in the market, Snapdragon 800 – and RedRice, a dual-sim 8-megapixel phone sold at the aggressive price of $110 for the Chinese market.

 

xiaomi red rice

 

The Beijing-based company controls the whole supply chain process, from design to marketing, with partners for manufacturing.

Barra gave a quite interesting definition of the company he works for:

“Xiaomi has the Google-style approach to software, which means building everything, including hardware, integrating quickly and moving fast; and attached to that, an Apple-style supply chain management, with high control over cost and quality.”

 

This perfect synthesis of the company’s efficient business model might help us understanding why in the future we’ll hear A LOT about Xiaomi.

 

Xiaomi’s Global Expansion

China is a massive country, and a rather independent digital ecosystem. In China there are 500 million smartphone users, a figure that doubled in just 6 months. The top 10 most downloaded mobile apps in China are Chinese – out of these, 5 are made by Tencent (the company behind QQ, QZone and WeChat).

From mobile applications to find taxis (such as DiDi) to social-dating mobile networks like 100M-users-strong Momo, the Chinese mobile Internet offers everything a user might ever need.

This means something very important in order to understand today’s digital world: in China there’s no real need for Western products. On the other hand, many Chinese tech and Internet companies are working on a quick global expansion – a matter we discussed during our interview with WeChat.

According to Barra, Xiaomi is a global-minded company, looking for international expansion in the short-term. The numbers are astonishing: 7 million phones where sold in 2012, set to became 18-to-19 million in 2013.

Xiaomi is already shipping in Hong Kong and Taiwan – where they sold 10,000 pieces in 10 minutes through an Internet flash-sale – and according to The New York Times, they’re planning on starting distribution in Malaysia and Singapore in the near future.

For sure, the potential for growth is huge. The company has now 400 employees including logistic and support, and 100 engineers. Barra stressed a very important point: all the marketing is done via social media, and in November 2013 Xiaomi sold 150 thousand Mi3 Android phones via their WeChat account, at the price of RMB 1,999 ($320) with a RMB 0.01 reservation payment.

Xiaomi WeChat

Xiaomi also runs a very powerful and user-focused forum, where the company gets feedbacks and suggestions for new products.

Once again, numbers speak by themselves: the banner on top of the page shows a few figures related to the forum’s activity – including over 10 million registered users, and over 450 thousand posts every day.

 

Xiaomi Forum

 

Digital in China today

Before talking about Xiaomi, Barra gave a very interesting introduction to Chinese Internet, with some figures regarding a series of different fields. Starting from China itself, a country with 8 million college graduates every year – compared to 3M in the US – and a disposable income tripled over the last 8 years, which fueled the incredible growth of e-commerce.

Speaking of which, here are some nice data he gave about e-commerce in  Cina:

  • Alibaba’s Taobao is the largest ecommerce in the world, more than twice the size of Amazon and Ebay combined, with a catalog of 800 million products, and made $160B dollars in revenue in 2012.
  • On 2013 Singles’ Day (November 11th) 5,7 billion dollars has been spent in one day on Taobao and Tmall. 1 billion dollar just in phones, and Xiaomi alone sold 100M dollars on Tmall.
  • Alibaba’s payment system Alipay accounts for 50% of all electronic translations in China, and it’s set to reach a run-rate of a trillion dollars a year (Paypal is 180 billion dollars).
  •  JD.com is the second-largest e-commerce company in China which bases its strength on super-fast delivery through a proprietary infrastructure and a mobile-based tracking system.

 

If you want to know more about Hugo Barra’s adventure in China, you can join the over 200 thousand followers of his Weibo profile – well more than the 6,000 on Twitter. In case you want to check out the video – which we warmly suggest – here’s the full panel at LeWeb in Paris:

 

 

Guido Ghedin

Guido Ghedin

After his University years between Italy and California, today he deals with Market Research and Digital Scenario Analysis at Young Digitals. You can follow him on Twitter: @guido_ghedin.

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