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Xiaomi Corp will focus on its core businesses

By Qiu Quanlin | China Daily | Updated: 2015-03-06 07:19

Xiaomi Corp will focus on its core businesses

Chairman of Xiaomi Corp Lei Jun answers reporters' queries outside the Great Hall of the People in Beijing on Thursday. Lei is attending the annual NPC session. Zou Hong / China Daily

Smartphone maker will not expand into other sectors, insists chairman, amid diversity rumors

Xiaomi Corp, a leading Chinese smartphone and TV accessories maker, said on Thursday that it would continue to focus on growing its core businesses and ruled out plans to diversify into other sectors.

"We will rely on our main businesses - smartphones, TV accessories and routing devices - to maintain growth," said Lei Jun, founder and chairman of Xiaomi.

Lei, also a deputy to the National People's Congress, which opened in Beijing on Thursday, made the remarks in response to speculation that Xiaomi would enter other businesses like home decoration and real estate.

"We are not associated with the home decoration and real estate businesses. Some companies have been using Xiaomi's development mode to tap these sectors," said Lei.

A startup company, which Lei did not identify, used Xiaomi's business model to enter the home decoration industry, he said.

"The company is following our business model, and it has proved effective in profit generation. But I have to reiterate that the business has nothing to do with Xiaomi," Lei said.

Xiaomi, which incorporates users' feedback into its product range, sells products directly to its customers to remain competitive in the smartphone sector.

Lei said he changes his mobile phone every week, so as to gauge fresh perspectives as a smartphone customer.

"I am in the phone-making business. Hence, it is very important to make our products better by incorporating experiences of all the latest smartphones," said Lei.

Lei was seen showing Xiaomi's latest phone, Xiaomi Note, to reporters before he entered the Great Hall of the People for the opening of the annual NPC session.

According to Lei, Xiaomi would not be engaged into other businesses such as electric cars for the next five years.

"It is a tough task to diversify business for a startup company, which should concentrate on its core business for growth," said Lei.

Xiaomi, which was founded in 2010, has become one of China's leaders in the smartphone sector, with sales increasing 135 percent year-on-year to more than 70 billion yuan ($11.16 billion) in 2014.

According to company sources, Xiaomi sold more than 60 million smartphones in 2014, an increase of more than 227 percent from the previous year.

Exuding confidence, Li said that Xiaomi's robust business growth would help it catch up with other global smartphone makers like Apple Inc and Samsung Electronics Co Ltd in the next 10 years.

"Xiaomi wants to be the world's top smartphone producer and has an ultimate goal of building a sound and healthy market system to promote the development of the smartphone industry," said Lei.

The company's products are already being sold in several overseas markets like the United States and India.

"Xiaomi will not be listed in the next five years. We are concentrating on our core businesses to expand market share," he said.

The company will realize sales of more than 100 billion yuan this year, and is on track to sell more than 100 million phones, judging by the growing demand in domestic and overseas markets, Lei said. "The booming Internet industry has also created huge opportunities for Xiaomi's business growth."

With China's economy stepping into the "new normal" phase, traditional industries should be better integrated with the Internet sector, he said.

"Integration into the Internet business will help upgrade traditional industries and maintain business growth," Lei said.

Qiuquanlin@chinadaily.com.cn

 

 

 

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