Overview of the company

Xiaomi Inc is a privately owned Chinese electronics company headquartered in Beijing. It is the
world's 5th largest smartphone maker. In 2015 Xiaomi sold 70.8 million units and accounted for
almost 5 percent of the smartphone global market share. Xiaomi designs, develops, and
sells smartphones, mobile apps, laptops and related consumer electronics.
Xiaomi was co-founded by eight partners on 6 April 2010. In the first round of funding,
institutional investors included Temasek Holdings, a Singaporean government-owned investment
company, the Chinese venture capital funds IDG Capital and Qiming Venture Partners, and
mobile processor developer Qualcomm.
Since the release of its first smartphone in August 2011, Xiaomi has gained market share
in mainland China and expanded into developing a wider range of consumer electronics,
including a smart home (IoT) device ecosystem. The company's founder and CEO is Lei Jun,
China's 23rd richest person according to Forbes. The company sold over 60 million smartphones
in 2014.
The company has over 8000 employees, mainly in mainland China, India, Malaysia, and
Singapore. It is expanding to other countries such as Indonasia, Philippines and Brazil.
According to IDC, in October 2014 Xiaomi was the third largest smartphone maker in the world,
following Samsung and Apple Inc., and followed by Lenovo and LG. Xiaomi became the largest
smartphone vendor in China in 2014, having overtaken Samsung, according to an IDC report.
At the end of December 2014, Xiaomi became the worlds most valuable technology start-up
after it received US$1.1 billion funding from investors, making Xiaomi's valuation more than
US$46 billion.

Strategy options for entering and competing in new markets.

In selling the Xiaomi smartphone, Xiaomi employs a strategy very unlike other smartphone
makers such as Samsung and Apple. The company prices the phone almost at bill-of-material
prices, without compromising the component quality and performance compared to other
premium smartphone. It also profits by selling phone-related peripheral devices, smart home
products, apps, online videos and themes. The company sees hardware sales as a means of
delivering software and services in the long term.
To further reduce overhead costs, Xiaomi does not own any physical stores, selling exclusively
from its online store. It also did away with traditional advertising and relies on social networking
services and word-of-mouth to publicize its products.
Furthermore, by keeping a tight control over its stock, Xiaomi is able to place cheaper batch
orders as demand dictates. Limited availability flash sales ensure that supply never outstrips
demand and helps create promote its products. In contrast traditional OEMs incur large upfront
productions costs, which must be recouped by selling prices, in order to ship phones, some of
which may not sell, out to retailers all around the world.
Finally, by making its operating system MIUI open for download on other Android phones, it has
made Xiaomis apps and content more easily accessible, widening the potential to provide
services to more users.