Forget Apple. Xiaomi CEO Now Wants to Be More Like Costco (bloomberg.com)

Xiaomi says it's misunderstood. Once compared with Apple for its sleek smartphones and charismatic leadership, the Chinese startup is seeking an image makeover as it tries to recover from a sales-growth slide. From a report: And the brand its billionaire co-founder Lei Jun wants to be compared with: Costco Wholesale Corp., the Issaquah, Washington-based warehouse retailer that sells everything from wine and diamond rings to bulging boxes of cereal and fruit at knockdown prices. Xiaomi's revenue will probably reach $15 billion this year as the Beijing-based maker of products ranging from pens and air purifiers to TVs and smartphones adopts a new business model and fine-tunes operations, Lei, 47, said in a recent interview. "We are not Apple," Lei, clad in a black polo shirt and blue jeans, said at Xiaomi's Bengaluru office in India, its biggest overseas market. "We have the same value system as Costco. We want users to enjoy better products at an affordable price."

Comments

Re:Noble of them but...

[Registered Coward v2]

...it takes a lot of discipline to be willing to take less than one could justify. The structure of Costco does this, their upper management does not take all they could, they do not pass all they can on to shareholders. They instead pay their workers well enough that it's possible to make working for Costco in a store a career and to retire from a life in that career.

It's very tempting to instead take more and more and more. It's hard to resist that. Hopefully if they really want to be like Costco they have the fortitude to really mean it.

Costco has a very interesting business model built on loyal employees, and makes it money from memberships, not sales. It's liberal return policy also builds loyalty; I returned an Xbox with the red ring of death, got my money back and promptly bought a new one rather than sending mine to MS for repair and Costco handled the return. That is a key difference, along with the the revenue from memberships, that is hard to replicate. Low price quality goods sold at low margins may attract buyers but can you sustain such a model over time?