As per the tradition of the company for the celebration of the Chinese New Year, the CEO of Xiaomi Lei Jun gave a very important speech at the Khoo University stadium in Beijing regarding the milestones achieved in 2016 and the goals set for 2017. This speech is It was also sent to the rest of the Xiaomi team by letter.
Right, one of the founders and Vice President Xiaomi, Liu De, who deals with industrial design and the Xiaomi Ecosystem.
In the foreground: Li Wanqiang, Co-founder and Vice President Xiaomi, head of the Mi.com site and of the e-commerce team, and Hugo Barra, Vice President, deals with the Global Division.
Lei Jun.
Translation of the letter sent by Lei Jun to colleagues:
Dear colleagues in Xiaomi,
Happy new year!
2016 was an exceptional and memorable year for Xiaomi. In so many ways 2016 was a fantastic year in Xiaomi's short history.
2016 was a year where we took some time to catch our breath and slow down our rapid pace to make essential adjustments to our business that will allow us to go further. Despite this, we still managed to achieve remarkable results in six key areas:
We have explored new frontiers in technology and marked a big step forward in the high-end smartphone market.
Xiaomi is a company driven by an engineering culture, and the pursuit of technological innovation is a fundamental part of our DNA. In 2016, we achieved a number of breakthroughs: Mi 5 was the first in the world to have 4-axis OIS and a 3D ceramic body; Mi 5s was the first in the world to incorporate (in the display panel) an ultrasonic fingerprint sensor, and the first in China with an incredibly light-sensitive camera with a pixel size of 1.55um; Mi Note 2 was one of the first cell phones in the world to use double-curved glass and the Mi MIX was the first in the world with a full-screen design, a true exemplar of our technological innovation and design capabilities. Meanwhile, we have applied for over 16.000 patents worldwide, of which we have already obtained 3.612, of which 1.767 have been granted by foreign patent agencies. Only through constant innovation will we be able to introduce new cutting-edge products in the intensely competitive high-end smartphone market.
We have seen great results thanks to our new sales strategy.
Solidifying our leadership in the e-commerce industry in China, we were crowned # 1 for the fourth consecutive year on the November 11th Singles Day. We have also renewed our Mi Home outlets, making them in effect points of sale. To date, we have opened a total of 54 Mi Home stores, three of which (one each in Shanghai, Beijing and Zhengzhou) have exceeded 100 million Yuan in gross revenue this year. We aim to open 200 more Mi Home stores in 2017, and a total of 1.000 over the next three years.
We have had a rapid growth in our global operations.
Xiaomi India achieved three important results in 2016: in October we sold 1,35 million smartphones; we surpassed US $ 1 billion in annual revenue for the first time; we secured a spot among the top 3 big smartphone manufacturers in India.
We have seen excellent results from our Mi Ecosystem industry.
Total revenues from our Mi Ecosystem products, smart TVs and smart routers have come to 15 billion Yuan in 2016, and we have over 50 million devices connected to our platform on the IoT (Ndr: Internet of Things, the Internet of Things or even of things) Mi Ecosystem. At the same time, we have also become the most successful hardware design curators in the world.
We now have proof of the success of our Internet service company model.
In 2016, revenues from our Internet services have doubled, proving no doubt that Xiaomi's business model works.
We conclude the year with an improved management structure and greater organizational efficiency.
We close the year with improved management and a more efficient organization. As an example, since we reorganized our smartphone hardware team in May, 2016, team members have doubled, and we have strengthened product research and development, the supply chain, and quality management and control. At the same time we have strengthened the flow of information at managerial level, and improved management as a whole.
In short, despite the challenges we faced in 2016, we still achieved excellent results. A huge thank you to all Xiaomi employees for your great commitment!
We have left behind the difficult times.
What we have accomplished is impressive, but the challenges we faced have not been forgotten. In the early years, we pushed forward too fast. We have created a miracle, but risk not getting growth in the long run. So we had to slow down, improve even more in some areas, and ensure sustainable growth for the company in the long run.
Our e-commerce strategy also faced difficulties. E-commerce now makes up just over 10% of all retail sales in China, and the online smartphone market alone accounts for 20% of the overall smartphone market. Xiaomi has big ambitions, and we're not satisfied with being just a smartphone brand sold via e-commerce, so we need to upgrade our retail model, and incorporate offline sales for a new consumer business strategy.
At the same time, we suffered from supply issues for four months in the 2016. The smartphone supply chain is extremely complex, and the efforts we have made over the last few years have not been enough to cover us from the impacts of the difficulties of the past year. However, the worst is over. With innovative technologies and products that speak for themselves, the year we have before is already promising.
Five groups of attention and a humble goal.
What will Xiaomi do then in 2017? We have identified five interest groups: tech news, new retail strategy, globalization, artificial intelligence, and internet finance. In 2016, we made tremendous progress in the first three areas and achieved sensational results, so I will focus on the last two.
Last year, AlphaGo (for whom he did not know is a software for the Go game) has easily beaten Lee Sedol, admiring the world and demonstrating the potential of artificial intelligence in changing men's lives. We also had major developments in the AI. In the past year, our facial recognition algorithm has climbed the rankings in the Massachusetts University of Massachusetts's FDBB (Face Detection Data Set and Benchmark) index. Artificial Intelligence will help people's lives easier, and this is our mission.
Internet finance is another key area that we will deepen this year. In December 2016, we launched XW Bank in a joint venture with partners including New Hope Group and the Hongqi chain. We have a team of more than 300 people who are working to lay the foundations in the financial sector for providing loans, insurance, other credit, finance, payments and securing the necessary licenses. This is extremely important for our future. Future giants of the future will not only be Internet companies, but also financial companies, because the future of finance is in AI and data. We are always a startup, but we have great ambitions and capabilities.
Finally, in 2017, we have a modest goal of 100 billion Yuan in profits for this year.
Moral values are what they count. Sincerity and passion are the core of Xiaomi's values. Sincerity means making sure that our products are of the highest quality with an affordable price while establishing a friendship relationship with our customers and listening to their requests. Passion means gathering a group of people pursuing excellence in creating products and bringing together to experience the joy of entrepreneurship.
This is the core of Xiaomi. If we're not honest and trustworthy, users will find out; and if we do not put passion, we will not be able to withstand the challenges we face on this path, nor create products that manage to touch people's hearts.
Our vision is “innovation for all” and if we don't enjoy this process, how can we make people appreciate the innovations we are bringing them? Our sincerity and passion have genuinely changed the lives of so many people already.
Looking back over the last seven years, we have disturbed the smartphone industry and other product categories, raising the quality of what's on the whole line.
From the day we started, we had a dream of becoming a great company. More than following profit, I believe there is a better future for us when we focus on the product experience. More than many levels of distribution channels adding to the cost of the product, I believe that high quality products at affordable prices will win people's hearts. It is a challenging and stimulating road ahead of us, and we must be able to overcome the difficulties by working to make our dream come true.
A big thank you to everyone in Xiaomi, who contributed in one way or another to society. Years later, you will be able to proudly say that you played a key role in creating an excellent tech company to bring the joy of innovation to billions of people in the world.
Lei Jun
1/12/2017
These are the long and deep words of CEO Xiaomi: we just have to ask ourselves what other surprises will have in store for us in this 2017.
