Widely popular Chinese hardware maker, Xiaomi, has today revealed that the company will no longer publish its smartphone sales for their previous year. This move stems from a statement where CEO Lei Jun has accepted that their company has grown ‘too fast’ in the last couple of years. He has also shared future projections and strategies for continued growth of their business.
There is currently no hiding the fact that 2016 wasn’t the best year for Xiaomi, in terms of smartphone sales. The Chinese company slipped from its top position in the sales chart to the fourth, courtesy of bombastic sales of Huawei devices in the country. There is also the concern of the company not being able to meet its revenue targets due to a sharp drop in hardware sales — which it says does not make them money.
With regards to the same, Xiaomi is currently faced with a problem that is similar to that being faced by LeEco at this very moment. Chinese manufacturers, in their ambitions to expand globally, have extensively poured in humongous sums of capital into their businesses. The same strategy has been employed by the company till date. But Lei Jun now reveals that Xiaomi is currently transitioning and plans to slow down and streamline operations.
Talking about the same in an internal memo sent to employees, he says,
In the first few years, we pushed ahead too fast. We created a miracle, but also drew on some long-term growth. So we have to slow down, further improve in some areas, and ensure sustainable growth for a long-term future.
Thus, vying to the struggling smartphone ecosystem, Xiaomi has decided (and confirmed) that it will no longer share the details for the sale of their devices. But he further added that the ‘difficult times are behind us’ and spewed a variety of figures to further advertise the growth of Xiaomi. In 2016, it achieved a billion dollars in annual revenue in India; offline stores crossed $14.5 mn in GMV; internet services revenue doubled and it released innovative new products — Mi Mix.
Further, Bloomberg reports that Xiaomi is running towards the ambitious goal of achieving nearly 100 billion yuan (approx $14.5 billion) of revenue in 2017. Lei Jun, the co-founder and CEO, has also shed light on other targets it plans to achieve this year. This includes quadrupling its offline store network to over 200 outlets (most likely globally) and deepening its artificial intelligence research. It also plans to overhaul their online-focused retail strategy in the coming months.
Talking about the same, the memo reads:
Xiaomi has great ambitions, and we are not satisfied with just being an e-commerce smartphone brand, so we have to upgrade our retail model, and incorporate offline retail for a new retail strategy.
In addition, the Chinese giant still plans to expand its root into the global market but at a controllable pace. Last year, it set foot into the U.S with the launch of its premium smartphone lineup and an Android TV plus Daydream partnership with Google. Called the ‘Apple of China,’ the company had last raised capital at a valuation of $45 billion in 2014. But, most analysts are now of the opinion that Xiaomi has failed to deliver on this bloated value and is operating way below that.