Summary: Empty headlines proclaiming ‘The Fall of Xiaomi’ have littered the internet since the company missed its first smartphone sales target back in 2015. But Xiaomi is not just a cheap handset manufacturer. In fact, Xiaomi’s $45b valuation has always been built on the promise that it could build a network of products and services — an ecosystem that includes not just smartphones, but also Mi branded fitness bands, power banks, air filters, smart home devices, and other technology products. And after a few years of incubation, this vision is coming into fruition.
Shunwei Capital considers Xiaomi’s ecosystem story to be one of the most interesting and innovative coming out of China. Having invested in multiple such ecosystem companies, Shunwei is uniquely equipped to share insights based on deep existing knowledge and ongoing conversations with the main actors.
Shunwei translated an article first shared on Toutiao by L, Picar, and 穆澄 on April 26, 2017 (link here). Given its length, Shunwei split the original article into two sections, with Part I providing the introduction and Part II describing the value exchange.