Millet Worries of 2015: Farewell to Hunger Marketing Transformation 2.0 Model

The biggest challenge came from Xiaomi's sales performance. Xiaomi CEO Lei Jun had previously given Xiaomi's 2015 mission of 80 million to 100 million units. In view of many analysts, Xiaomi’s index of success or failure this year has already reached a maximum, which is 100 million units.

Obviously, it is a difficult task for Xiaomi to complete the remaining 60 million units in the second half of the year. On the one hand, Huawei, LeTV, 360, and many other competitors have spluttered. On the other hand, the overall decline in the smart phone market, and from the millet's own products, the low-end machine suffered siege, high-end machines have not really opened up the situation.

Some media even asserted that Xiaomi was in an ups and downs: The most terrible thing is not that the growth rate has slowed down, but that it has faded, and Xiaomi or the top has started to decline.

However, Xiaomi executives are satisfied with their performance. Lei Jun once said that even in the case of the slowdown in the growth of the smart phone market in China in 2015, Xiaomi still maintained a 33% year-on-year growth rate. Xiaomi outperformed the market and handed in an outstanding transcript.

"The outside world has a high expectation for Xiaomi." Xiaomi President Lin Bin said in an exclusive interview with Tencent Technology that Xiaomi has inadvertently created a mobile phone sales miracle in China, but many people still expect Xiaomi to maintain at least 150% growth in handset sales as in previous years. .

Of course, Xiaomi is still on the road to pursue the scale. Lin Bin said that after squeezing out Samsung as the first in the Chinese market, the millet model has entered the 2.0 model - normalization, no longer engage in "hunger marketing," but is opening up to purchase and gradually transforming itself into an e-commerce provider.

Millet Mode 2.0: Transforming Normal E-Commerce

Over the past few years, Xiaomi has been blamed by the outside world for engaging in “hunger marketing” and for fattening “cattle,” because the supply chain has not kept pace.

Xiaomi is now changing the "hunger marketing" model. According to sources, Xiaomi’s sales of red rice Note2 reached 1.5 million units in half a month, setting a record for Xiaomi’s history.

“In the past, every Xiaomi cell phone sales could not keep up with the shipment, and it took a long time to stock. But this time, Redmi Note2 has come up with a spot on hand to obtain a very good user experience.” Xiaobin Linbin, President Tencent Technology said, "The entire experience of the purchase process is smooth, do not need to grab a single."

This is a new attempt in the history of Xiaomi. Lin Bin believes that the original mode of relying on users to grab is an e-business, but for many Chinese mobile phone users, if they do not grab a brand of smart phones, there are currently more new options.
The increase in competition is one of the main reasons why Xiaomi has to change the traditional model.

Xiaomi is becoming a normal electricity supplier. “This is an important transformation of Xiaomi this year and it is really moving toward the Internet of e-commerce. The so-called millet model 2.0 refers to Xiao Mi’s need for a real e-commerce model and strong support for research and development and self-confidence.” Lin Bin said Tell Tencent Technology.

For example, Xiaomi is relying on the existing millet network model and operator channels, and has also cooperated with e-commerce companies such as Tmall,, and etc., also because the overlap between these channels and Xiaomi’s users is not high. Another increase in Xiaomi’s mobile phone sales.

The basis for accomplishing this is that Xiaomi must have strong enough supply chain support to provide sufficient sources of goods immediately after the launch of new products, and the product quality and quality can be guaranteed enough. Otherwise, once the Xiaomi phone problems, it is easy to trigger a chain reaction. In a sense, the recent screen-changing disputes in Redmi Note2 are also the pains encountered in the transition.

On the other hand, the transformed millet will also face new inventory pressure.

"A lot of mobile phone manufacturers are dragged to death by inventory." In fact, inventory pressure has always been a concern for Lei Jun. Millet's 2.0 model is closer to traditional mobile phone manufacturers, and is also more likely to cause inventory pressure. How does Xiaomi avoid inventory pressure?

Lin Bin admits that inventory budgeting and control are difficult to do, but compared with traditional mobile phone manufacturers, Xiaomi’s advantage is that it is easier to see daily sales data than traditional mobile phone manufacturers, and the mobile phone production cycle can be continuously adjusted based on these sales figures.

At present, about 70% of Xiaomi's mobile phone sales come from online, and about 30% of the sales come from offline channels. Although the operator channel generally returns data after a week, but overall, Lin Bin believes that Xiaomi can control the inventory risk at a relatively reasonable level.

Millet Puzzle: How to Maintain High Growth

In July of this year, Xiaomi announced its sales performance in the first half of the year. From January to June this year, handset sales reached 34.7 million units, down from 35 million in the second half of the previous year. Since Xiaomi reported sales data every six months in 2013, this was the first time that Xiaomi’s mobile phone sales had fallen.

Xiaomi once said that the decline was due to the Spring Festival in the first half of the year and that many factories were shut down and could not compare the first half with the second half of the previous year. However, the media pointedly pointed out that during the same period, Huawei was gloriously mobile and grew rapidly, claiming that it had completed its annual sales in the first half of the year.

After the rapid growth of the past few years, is Xiaomi mobile phone sales growth in China entering the bottleneck period?

“Millet’s mobile phone has grown by 200% every year, but it is not realistic to increase 200% after the sales base is large enough. This is equivalent to Xiaomi’s sales of 150 million units this year.” Lin Bin told Tencent Technology.

The more realistic reason is that the growth of the Chinese smart phone market is slowing down. There are two trends. One is that the sales of smart phones themselves are slowing down, and the other is that the amount of mobile phones sold through e-commerce channel is slowing, and the annual growth is 40 per year. %, it has dropped significantly.

Millet itself is satisfied with the sales of mobile phones, but many analysts in the industry are not satisfied with the current growth of Xiaomi, and all kinds of voices for Xiaomi began to appear. The most typical argument is that Xiaomi's peak period has passed and it may go downhill in the future.

The Chinese market is also changing. China's consumer demand is escalating and millet product upgrades may not be able to catch up with consumer demand. An industry source said that millet’s products have surpassed everyone’s expectations in the past few years, but it’s getting harder and harder, sometimes less than expected.

Lin Bin said when talking about this reality, "this aspect is driven by competitors; on the other hand, consumers' expectations for Xiaomi are too high."

The future of Xiaomi: expanding offline and international markets

Undoubtedly, after five years of smooth sailing, millet is facing new challenges in a new stage - how to take it to a new level.

Lin Bin analyzed the current domestic smart phone market, e-commerce sales channels accounted for 40% of all mobile phone sales, offline channels accounted for 70%, the middle part of the stack is about 10%; among them, Xiaomi mobile phone sales accounted for 30% of online sales, offline The proportion is 5% to 8%.

"Xiaomi mobile phone sales in China accounted for 15% to 18% of mobile phone sales." Lin Bin said Xiaomi ideal goal is to be able to account for 50% of the online part of the offline increase of 10% to 15%, Xiaomi accounted for the entire The proportion of mobile phone sales in China is 20% to 25%.

One of the growth points of Xiaomi is opening more experience shops online, combining Xiaomi smart hardware and smart home products to increase sales and experience. Lin Bin believes that products like millet air purifiers and millet TVs will be more popular online.

In July this year, the former DST partner who joined Xiaomi as the CFO will play a large role in this aspect.

“The millet bracelets, patch panels, and purifiers are all products that Xiaomi invests in. The arrival of Zhou’s funding will help the company more professionally seek cooperation and strengthen Xiaomi’s entire ecosystem.”

Lin Bin told Tencent Technology that the ecosystem layout surrounding the mobile phone is the future of Xiaomi. Selling a purifier is to obtain a user. Selling a mobile phone is also a user. In the future, Xiaomi can provide users with more data mining and other aspects. Added value.

Another growth point of Xiaomi is to look to the international market.

“Millet hopes to complete the internationalization team this year and gain more breakthroughs in internationalization next year.”

At present, an important stop for internationalization of millet is India. Lin Bin said that India’s smart phone sales this year will reach 80 million units, and it may reach 1 to 120 million units next year. Xiaomi is already the fifth largest mobile phone manufacturer in the Indian market. In Samsung and other international brands.

Right now, Xiaomi's main event this year should be the release of Mi 5. In previous years, Xiaomi had already released new products in advance. However, this year Xiaomi has rarely issued relevant information on Mi 5.

To some extent, this is also part of the Xiaomi 2.0 model, which means that Xiaomi no longer wants to start a certain chip, but is more concerned about the stability of the mobile phone. "At least the chip is the first or second, and everyone is not paying attention. ".

Lin Bin said that in the millet 2.0 model, mobile phone sales will be very large, the quality must be good, otherwise it will be a big problem. When Tencent Technology repeatedly asked about the time when Rice 5 was released, Lin Bin only disclosed that “our rice 5 needs more time.”

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