Xiaomi: A High-End Low-Price Smartphone Start-up Trying to Diffuse Its Own Platform

Abstract

Founded in Beijing in 2010 by the Chinese serial entrepreneur Lei Jun, Xiaomi focused on high-end smartphones sold at a very competitive price-point and equipped with a highly personalized Android-based operating system rapidly attracting a wide ecosystem of application developers. Within five years, Xiaomi became one of the top five smartphone vendors worldwide and the most valuable unlisted business in late 2014, with a market valuation of $46 billion after the fifth round of financing. As examined in this chapter, the amazing success of Xiaomi was the result of an innovative business model allowing the start-up to (1) smartly position its products across industry strategic groups and (2) successfully exploit a set of complementary offerings customized for the rapidly expanding Chinese market.