At the stage when brand premiums are generally shrinking and cost-effective consumption concepts are sweeping the world, Xiaomi’s exploration of high-end will provide a methodology for more Chinese companies to learn from.
Compared with the grand occasion of the halo half a year ago, Xiaomi now presents a strong sense of separation between products, business and public opinion.
On the one hand, Xiaomi’s mobile phone and automotive product sales are rising strongly, new products have shown strong product strength, and the financial report data has once again set a new record of “strongest in history”. According to Canalys statistics, Xiaomi mobile phones have returned to the first place in the domestic smartphone market after ten years; As of May 21, Xiaomi SU7 series has delivered more than 258,000 units, with a delivery target of 350,000 units in 2025.
On the other hand, from the accident on March 29, to Lei Jun’s internal speech, the resumption of Weibo, the delivery of Xiaomi SU7 Ultra carbon fiber front hatch, and then to the release of Xiaomi YU7 and self-developed Xuanjie chip, Xiaomi’s important nodes in the past two months have been accompanied by controversy. In June, Xiaomi fell into a turmoil suspected of insinuating with Yu Chengdong, executive director of Huawei and chairman of Terminal BG.
We believe thatNot completing the high-end is the core reason why Xiaomi currently presents this sense of separation.
Xiaomi takes the high-end of cost-effective products as the cornerstone, relies on the detonation of cars and founder IP, and has received the blessing of huge traffic for a period of time. However, this traffic was not only transformed into stronger brand power by continuous technology and innovation capabilities, but also offset the accumulation of brand power brought about by the high-end of some products after the accident on March 29.
This feeling of separation can be a pain in pain, or it can become a pebble that shatters Xiaomi’s high-end dream. If Xiaomi’s decline in shipments in 2015 was the first “darkest moment”, prompting it to improve its production and R&D omissions; Then we would like to see that after experiencing the “darkest moment”, Xiaomi can improve its brand building methodology and achieve high-end transformation.
Because at the stage when brand premiums are generally shrinking and the concept of cost-effective consumption has swept the world, Xiaomi’s exploration of high-end will provide more Chinese companies with a methodology to learn from and a possible path to enter the global market.It will depend on how Xiaomi and Lei Jun respond to the accident controversy, how to properly quell the dissatisfaction of Xiaomi SU7 Ultra owners, and how to continue to improve technology and innovation capabilities.
01 High-end products are the first half step of the foundation
Lei Jun said in “Xiaomi Entrepreneurial Thinking” that high-end is a life-and-death battle that Xiaomi cannot avoid, and it is “a big test of Xiaomi’s comprehensive ability and strategic determination in the next 10 years.” whereasA complete brand system, recognition and technology of high-circle users, and experience leading products are the three core elements of Xiaomi’s high-end methodology.
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Among them, high-end products are the basic elements. The market share of the high-end price segment is the main indicator to measure the high-end of the product. Combined with the latest financial report data, the high-end of Xiaomi’s mobile phones and cars is progressing smoothly, and there are no shortcomings.
In terms of mobile phone products, Lu Weibing, president of Xiaomi Group, said on the earnings call that the market share of Xiaomi mobile phones in the price range of 4,000-6,000 yuan in 2024 has reached 17-18%, and the next target will shift to the price range of more than 6,000 yuan, and the current market share of Xiaomi mobile phones in this price range is 5%. While the price segment has increased, Xiaomi’s mobile phone sales have ranked among the top three in the world for 19 consecutive quarters, and even the domestic market share has rebounded significantly.
In terms of automotive products, Xiaomi chose high-end models of more than 200,000 yuan at the beginning of car manufacturing. According to data released by Xiaomi’s financial report, in April 2025, the Xiaomi SU7 series will deliver more than 28,000 units, of which Xiaomi SU7 will become the sales champion of all models priced at more than 200,000 yuan. Lu Weibing even said: “SU7 has been released for so long, and none of them are opponents of SU7, and there is no one who can fight.”
The core of Xiaomi’s high-end products is still the logic of explosions. First of all, the main tone of the explosive logic is cost-effectiveness, which can stimulate the desire of a larger group of people to buy. Secondly, the logic of explosive models means a more concise product layout, which can concentrate on polishing a highly competitive product. Finally, the popular model itself has its own traffic, which is the core element of building word-of-mouth, and good service and communication are auxiliary elements.
Moreover, Xiaomi’s explosive logic will match different operating plans when facing different groups of people.
The initial target audience of Xiaomi mobile phones was enthusiasts, and later gradually expanded to mass users, and after the split from Redmi in 2019, the Xiaomi brand focused on high-end people. Different groups of people will have different requirements for explosive models. High-end people yearn for the latest technology and the best experience, and mass users will consider the price, technology, and experience more comprehensively, and some users will want the ultimate cost performance.This will point to different product definitions, and Xiaomi needs to be more targeted to find and create explosive products.
Specific to the details of the creation of explosive products, Xiaomi often finds several pain points in a targeted manner to show users its “ultimate” pursuit of products as a marketing selling point. This is very clearly reflected in the creation of the Xiaomi SU7. In addition to the high-value design, Xiaomi will be equipped with sunscreen glass and co-pilot makeup mirror to increase attractiveness and topicality for female users.
02 Controversy and self-proof are not the main theme of high-end
The shortcoming of Xiaomi’s high-end is in the brand, which is a half-step that Xiaomi has not taken thoroughly. The various controversies that have arisen in Xiaomi in the past two months are ostensibly the backlash of traffic, but in essence they are the embodiment of the lack of high-end potential energy of the Xiaomi brand.
A small part of the halo that shrouded Xiaomi two months ago came from the value brought by Xiaomi SU7, and a larger part came from the traffic Lei Jun himself attracted from the short video platform. From “the cold 4 billion lying on the account when it was the most depressed” to “the 100 billion boss bent over to open the door for users”, Lei Jun has attracted a large number of fans and marketing accounts to create memes and play memes around him by showing his conscience and people-friendly personality.
However, the traffic community formed around Lei Jun personally is completely different from the logic of Xiaomi’s previous use of explosive products to ferment word of mouth and precipitate brands. The former is impulsive, sensitive, irrational, and unstable, and it is difficult to contribute effective feedback to Xiaomi’s business development; The latter is relatively rational, peaceful and stable, which can help the Xiaomi team anchor a clearer development consensus.
This also led to the death of three young girls in the Xiaomi SU7 accident, Lei Jun would feel “a storm of doubts, criticism and accusations”, and he did not expect that this accident would hit Xiaomi so hard. Behind this is that the expectations and requirements of traffic for Lei Jun and Xiaomi are beyond the normal range. When a person is enshrined on the altar, people demand him by the standards of a saint.
If Xiaomi itself has the strength to undertake these traffic conversions, it may not let Lei Jun feel such an impact. The investigation report on the car accident has not yet been released, so we will not discuss it for now. However, the subsequent carbon fiber hollowed out front hatch cover turmoil, the controversy over excessive borrowing from car design, and the question of whether Xuanjie O1 was developed by Xiaomi all exposed Xiaomi’s shortcomings in brand building.
According to Lei Jun’s understanding, brand is a user’s comprehensive cognition of the whole process experience of products, services, channels, and communication provided by an enterprise. The shortcomings exposed by the above controversies can basically cover the above points.
Li Nan, former vice president of Meizu and founder of Angry Miao, also posted on Weibo that Xiaomi’s real flaws are only three: first, the originality of the design is insufficient, and it over-borrows from brands such as MUJI, Porsche, and Ferrari, causing harm to China’s industrial design industry; second, the persistence in stacking parameters has led to some users speeding on the road, endangering traffic safety; Third, exaggerate and publicize its own technical strength.
It is precisely because of these flaws that Xiaomi will give Yu Chengdong a chance, insinuating that “the product quality and intelligent driving ability are not so good, but with the brand, traffic and new media marketing capabilities, only one car will sell out.” Therefore, Xiaomi will frequently fall into the self-certification trap to prove that the chip was developed by itself, to prove that it is not an assembly plant, and to prove that it is a technology company.
03 Complete three incisions for high-end
At present, similar to relying on optimizing the entire organization and product system to get out of the first “darkest moment”, Xiaomi also needs to make a system-level patch to get out of the second “darkest moment”, rather than tinkering at a few specific points.
Automobiles, chips, and intelligent manufacturing will be the three incisions for Xiaomi to complete high-end.
First of all, the automotive business is a business that determines Xiaomi’s “strategic depth” in the next ten years.
On the one hand, if Xiaomi YU7 can continue the success of Xiaomi SU7, Xiaomi, which has two popular high-end automotive products as support, will be more convincing to high-end users in terms of mobile phones and IoT, and bring more high-end endorsements to the Xiaomi brand. This also means that Xiaomi can complete the layout of the whole ecology of people, cars and homes through the success of the automotive business, and introduce more high-end users into this ecosystem.
On the other hand, the automotive business is likely to replace mobile phones and become Xiaomi’s biggest revenue pillar in the next few years. According to the financial report for the first quarter of 2025, the total revenue of Xiaomi’s automotive business was 18.1 billion, and the gross profit margin reached 23.2%. Lei Jun said at the investor conference that Xiaomi’s auto business is expected to be profitable in the third to fourth quarter of this year. This will give Xiaomi more room for strategic exploration.
Secondly, the chip business is not only the embodiment of Xiaomi’s technical strength, but also the core of driving Xiaomi’s ecosystem.
As Lei Jun said, “If Xiaomi wants to become a great hard-core technology company, chips are a peak that must be climbed, and it is also an uphill battle that cannot be bypassed.” Although Xiaomi’s launch of the Xuanjie O1 chip has been questioned by some people, Xiaomi has become one of the few companies with 3nm SOC chip research and development capabilities in a de facto sense. The hard technology label is a necessary condition for Xiaomi to go to the high-end.
The success of self-developed chips will also bring two benefits. The first is that Xiaomi’s people-car-home ecological layout has a lower core. Lu Weibing said that chips are a platform capability, and Xiaomi will rely on chips to expand its product line in the future. “Only when we master the underlying chip capabilities can we truly achieve a long-term differentiated product experience and truly form a moat.”
The second is that self-developed chips can better exert the performance of AI. For Xiaomi, self-developed chips are the heart of the ecosystem, and AI will inject soul into the ecosystem. The differentiated product experience mentioned by Lu Weibing is to innovate a better product experience based on self-developed chips and collaborative AI and operating systems. A smarter full-ecological experience is also the pillar of Xiaomi’s high-end.
Finally, intelligent manufacturing can dispel misunderstandings about Xiaomi OEM, and more importantly, ensure the efficient operation of the entire Xiaomi system.
Lei Jun believes that in the past ten years, among the many misunderstandings about Xiaomi, the most widely circulated is that Xiaomi does not have its own factory, and production relies on OEM, so there is no technology. Xiaomi has built three intelligent manufacturing factories, Beijing Changping Smartphone Factory, Beijing Yizhuang Automobile Gigafactory and Wuhan Smart Home Appliance Factory, and will build more than 20 gigafactories around the world.
Moreover, Xiaomi wants to export Xiaomi’s methodology on the production side through the exploration of intelligent manufacturing to improve quality and efficiency. This is a key link in ensuring the quality and service of high-end products, and it is also another “real moat” of Xiaomi in the future. According to Lei Jun, Xiaomi wants to promote equipment automation, intelligence and the transformation of factory system forms to become “manufacturing of manufacturing”.
An intelligent and digital chain from design, production to consumption made by Xiaomi’s methodology can compress greater profit margins, ensure the quality and efficiency of production, and let Lei Jun’s “focus, ultimate, word-of-mouth, and fast” Internet seven-character formula be played at a higher level, and at the same time, it can also reverse the stereotype of some users about Xiaomi’s lack of technology and help its high-end process.
This may also help Xiaomi gain a greater advantage when competing with giants in traditional fields.
Fang Hongbo, chairman and president of Midea Group, said when talking about Xiaomi’s participation in the competition in the home appliance industry, no matter who enters the home appliance industry now, it has lost strategically. He pointed out that home appliances are essentially a low threshold and highly competitive industry, with a fixed playing style, and there is not much space for compressible efficiency in the industry value chain, and no matter how it is fought, it is a huge war of attrition. Xiaomi’s extension to the manufacturing side is also looking for a solution to this situation.
In short, the process of Xiaomi’s high-end is also the process of Li Nan’s “transcending the stage of adaptation and survival” to chase “one’s own pursuits and propositions”. This requires soil change and systematic capacity building.
