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

Posted by msmash on from the brand-perception dept.

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."

7 of 33 comments (clear)

  1. Noble of them but... by TWX · · Score: 5, Insightful

    ...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.

    --
    Do not look into laser with remaining eye.
    1. Re:Noble of them but... by MrCodswallop · · Score: 2

      I fear their ambitions are not of that nature but to emulate the "knockdown prices" strategy with Chinese manufactured products?

    2. Re:Noble of them but... by Registered+Coward+v2 · · Score: 4, Interesting

      ...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?

      --
      I'm a consultant - I convert gibberish into cash-flow.
  2. Uh, no... by __aaclcg7560 · · Score: 2

    Steve Jobs handing out free samples on a Saturday afternoon.... I can't picture it.

  3. My xiaomi experience by Camembert · · Score: 2

    I currently live in in Hong Kong. I needed a remotely controllable webcam for baby monitoring and a friend suggested me to check out xiaomi. Indeed, I found a well-designed Apple-like product that works well for a good price. I also found their other products on display well made and beautiful for a sensible price.
    In the end I came home not only with the webcam but also with their elegant "urban backpack", a well designed non-utilitarian looking backpack that is just perfect to gonto the office with, and not even embarassing when visiting customers.
    Xiaomi earned my goodwill.

    1. Re:My xiaomi experience by rogoshen1 · · Score: 2

      Wow, in addition to making apparently decent products, Xiaomi even employs shills with proper grammar.

      Top notch, Impressive!

  4. Product Philosophy (Kirkland), not Corporate. by Hodr · · Score: 3, Informative

    Everyone keeps mentioning Costco's corporate structure, or how they pay their employees. I took the comment to be more of a reference to Kirkland products. Good products sold for a reasonable price that are relying on their value rather than a name to make them attractive.