Xiaomi Corp (小米), one of China’s hottest companies, is bringing its blend of cheap, yet fashionable technology and crowd-pleasing antics to the US.
Although its smartphones will not be available in the US any time soon, Xiaomi on Thursday unveiled plans to test the US market by selling inexpensive headphones and other accessories online. It plans to hew to the Internet-driven, customer-friendly model that has helped turn the company into a major player in mobile computing just five years after its founding.
Xiaomi has made a name in China by selling sleek gadgets at relatively low prices, using online sales and social media to keep marketing and distribution costs low. Some analysts have hailed the company as the Chinese equivalent of Apple Inc, in part because of its intensely loyal fans.
There are some significant differences between the two companies’ approaches, though. While Apple tends to keep its future product plans secret, Xiaomi has invited customers to nosh on popcorn at company parties, chat on Xiaomi’s online forums and review or make suggestions for new features, which Xiaomi frequently builds into its weekly software updates.
“We don’t have customers or users. They prefer to be addressed [as] fans,” said Hugo Barra, who defected from his job overseeing Google Inc’s Android products in 2013 to help plot Xiaomi’s expansion outside of China.
Barra was joined on Thursday by Xiaomi cofounder and president Lin Bin (林斌) at the company’s first major press event in the US.
In an interview, Barra described the US Web site as “an experimental launch” that is calculated to help the company raise awareness in the US, which in turn would help its profile in other countries.
He said the company is also hoping to get the kind of feedback and ideas from US consumers that the company gathers in China.
Xiaomi has emerged as a mobile-computing sensation with a line of smartphones sold in China, India and six other countries where much of the population still lacks Internet access. The company plans to expand into Brazil later this year.
Its phones offer a smattering of the sleek technology featured in fancier devices made by the likes of Apple Inc and Samsung Electronics Co, but they sell at much lower prices, ranging from about US$95 to US$280. In comparison, an iPhone 6 starts at US$650 without subsidies for signing a two-year contract.
A Xiaomi phone “may not be the best product out there, but a product with the best combination: a very affordable price and good quality,” Beijing-based Cheung Kong Graduate School of Business corporate strategy expert Teng Bingsheng (滕斌聖) said.
While the iPhone still dominates the smaller luxury segment of China’s market, Xiaomi’s devices are being snapped up by the masses almost as quickly as the company starts accepting online orders. Xiaomi sold about 61 million phones last year, more than tripling its 2013 volume, Lin said.
That established Xiaomi as China’s top seller of smartphones with a 15 percent market share to edge out Samsung at 14 percent, according to research firm HIS Inc.
However, another research firm, Canalys, estimated that Apple sold more phones in China than either of those companies in the fourth quarter of last year, when Apple’s new iPhone 6 models came out.
By concentrating on online sales of phones and accessories, Lin said, the company has built the third-largest e-commerce site in China.
Besides phones, Xiaomi has an electronics lineup that ranges from a 49-inch flat-panel TV for US$550 to a fitness band for about US$13. The company has also sold about 2 million stuffed bunnies that serve as Xiaomi’s mascot.
Xiaomi is just dipping its toes in the US market by selling accessories for now, including headphones for about US$80.
Barra said it takes “an incredible amount of work” to bring more technologically complicated products, such as a smartphone, to a new market.
He did not say when that might happen.
Executives acknowledged the company would face big hurdles in the US, where most consumers buy smartphones from wireless carriers at subsidized prices. That could make Xiaomi’s low-margin business model less effective.
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