Xiaomi: Will It Become the New Apple at Half the Price?

Xiaomi Raised $4.7 Billion at a $54 Billion Valuation

Xiaomi went public early last week, with its debut on the Hong Kong Stock Exchange. Although the company raised around $4.7 billion, this was nowhere near the $8.5 billion it was hoping to raise when the IPO was first announced back in May. Xiaomi has since made it clear that this new-found capital will be used to help fund its international expansion, increase the presence of its physical stores, and continue to invest in new products and services. And Xiaomi certainly isn’t waiting around to act on this strategy, as the company has already planned a global product launch in Madrid on July 24, where it is expected to launch the Xiaomi Mi A2.

What’s Next for Xiaomi?

One of Xiaomi’s main draws for consumers is that it offers high-end phones at affordable prices. The devices are often compared to Apple’s — both in terms of design, functionality, and specs; even some of the Chinese company’s advertising has drawn comparisons to Apple’s ad campaigns. And Xiaomi’s well-designed, innovative, and high-quality smartphones — belonging to their own family of services and related devices — are certainly reminiscent of Apple’s everything-connected strategy.

“You shouldn’t think of Xiaomi as a hardware company, or an Internet company, or an e-commerce company,” said the company’s CFO, Chew Shou Zi, at the Xiaomi IPO. “We are the rare company that can do hardware, and do Internet, and do e-commerce.”

So, even though the company’s focus is on smartphones, Xiaomi is looking to entice customers to buy into a variety of their non-smartphone products. This tactic has even seen some early wins globally: Xiaomi’s electric scooters have been something of a hit in the U.S., with transit startups such as Spin and Bird adopting Xiaomi scooters. This has led to an influx of rebranded Xiaomi scooters across U.S. cities, particularly in San Francisco.

Xiaomi’s Challenges: Internet Services and Securing Success in China

Xiaomi boasted an impressive user base of 250 million in May 2018, but the company still faces a number of challenges. For example, it has seen a steep decline in active users in China recently, losing out to competitors such as Oppo, Vivo, and Huawei. The Oppo R9 and Vivo X9, in particular, have won over many Chinese consumers, even though Xiaomi’s devices generally get positive reviews from consumers and critics alike.

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