How come Xiaomi has so many different devices? In the world of technology, few companies have managed to create as impactful and expansive an ecosystem as Xiaomi. What started as a smartphone-focused startup has evolved into a sprawling network of products, services, and partnerships that touch nearly every aspect of daily life. At the heart of this success lies a brilliant strategy rooted in simplicity, scalability, and user-centric design. Let’s dive into how Xiaomi achieved this feat and what lessons we can learn from their approach.
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Xiaomi is an amazing company. Not only because it is "top for its money", but because it has an unreal number of products. I found on the Internet that today Xiaomi has about 500 different devices and products, although in reality there are even more. Xiaomi has smartphones, tablets, laptops, cars, headphones, vacuum cleaners, air purifiers, refrigerators, dishwashers, speakers, smart cameras, fitness bracelets, toothbrushes, power banks, electric scooters,.... the list can be continued almost endlessly. And there are also not gadgets at all, but just goods - backpacks, pens, towels, children's toys and even toilet paper.
In general, Xiaomi has an incredible number of different products, which are often not particularly related to each other (at least, it seems so at first glance). I think there is no other technology company in the world with such a diverse range. And this is despite the fact that Xiaomi is a young company, it is only 12 years old. Childhood by corporate standards. It turns out that on average Xiaomi rolls out at least 40 new products to the market every year. And most of them are not some kind of consumer goods, but gadgets, and smart ones at that! How is this even possible?
Step 1: The LTV Mindset – Think Beyond the First Sale
When Lei Jun, Xiaomi’s founder, realized that smartphones alone couldn’t sustain long-term profitability, he made a pivotal decision: instead of focusing solely on hardware sales, Xiaomi would adopt a Lifetime Value (LTV) approach.
Let's go back 15 years. Then Xiaomi was a small startup that didn't have any of its own hardware. There was only the MIUI operating system.
At that time, MIUI was very similar to the "elite" iOS, but also with flexible customization - you could play with themes and styles, change icons and sounds. And MIUI was also very open - Xiaomi welcomed bug reporting and user testing and even rolled out weekly updates based on user feedback.
It is no wonder that MIUI appealed to many advanced users, and Xiaomi began to gain fans. In 2011, Xiaomi decided to make a "house for MIUI", and so the first Mi 1 phone was born. Then Mi 2. A little later - Mi 3, as well as the first truly budget phone from the Redmi line.
It would seem that smartphones are selling, business is going well. Cultivate this market further and enjoy! But Lei Jun had other thoughts on this matter.
The thing is that in those years, the smartphone boom was in full swing in China, and the phone market was already starting to overheat. There were a bunch of strong players with huge resources - giants Huawei and ZTE, strong Lenovo, ambitious brands from BBK... And do you remember who was called the "Chinese Apple" back then? No, not Xiaomi, but Meizu (though something went wrong later). And there were also strong Taiwanese from HTC, who at one time released the very first Android phone in history. And Samsung did not sit still and actively developed budget lines. All this fraternity competed in camera pixelation and battery amperage, they all cloned the iPhone (and each other) and staged brutal wars of features and prices.
In general, Lei Jun clearly understood that the Chinese smartphone market would be very, very tough, and a startup called "Xiaomi" would not be able to compete with the huge monsters. But if it is not possible to make money on phones, then what to do?
Lei Jun makes an obvious, yet brilliant decision:
If we can't make money on smartphones, then... we won't make money on them. We'll use them as bait, and make money on something else!
By offering affordable, high-quality smartphones as "bait," they attracted users into their ecosystem. Once inside, these users became loyal customers for other products and services - smart home devices, wearables, even everyday essentials like backpacks and sneakers.
This shift in mindset allowed Xiaomi to think beyond short-term gains and focus on creating value over the entire customer lifecycle. It wasn’t about selling one phone - it was about embedding themselves in users’ lives for years to come.
Step 2: Filling Your Digital World
In 2014, Xiaomi switched to a very bold business model called "ecological chain" or "eco-chain". Here’s what that means:
- The company starts selling phones with a minimal margin, about 5%. This allows it to squeeze out competitors with price and capture the phone market at breakneck speed.
- The phone is transformed from a source of profit into an "entry point" through which the user falls into a single digital world under the Xiaomi brand.
- Within this digital world, the company will make money in different ways.
Eco-chain is a set of smart devices and additional Xiaomi products that cover a wide range of user needs. And it is important that these products are interconnected and unified. What does this mean?
Firstly, all gadgets and additional products should work together. So you bought a smartphone. It comes with a case, headphones and a power bank, which are made especially for it. And also a fitness bracelet. You bought smart scales that transmit information to the bracelet, and that to the app on the smartphone. And you also buy a smart camera, a doorbell, a kettle and a robot vacuum cleaner. You install a smart home app on your phone, slap scenarios there - for example, so that the kettle turns on as soon as the camera detects you or you ring the doorbell. As a result, the smartphone is no longer a phone, but a "remote control for life". Oh yeah, and your cat drinks from a smart water bottle - and if the water runs out, the fitness bracelet will vibrate for you. Well, you get the idea.
Thirdly, there should be a lot of these gadgets and goods, so that they cover all (okay, almost all) needs.
And now, within such an ecosystem, you can earn money. How exactly? Well, there is plenty of scope for development. You can sell a bunch of additional smart gadgets and products (with a much higher profit margin than smartphones). You can sell a subscription to extended functionality. Let's say, if you have a bunch of connected devices, then you need a large cloud storage, and it is already paid. You can stuff advertising into the operating system and run it right inside the phone and smart gadgets (the most annoying practice, but Xiaomi does it). And you can also take money from partners: do you want to integrate into our ecosystem and get new clients? Pay.
Now that's a different conversation and a completely different business! But there is a nuance. To build such an eco-chain, you need to churn out a shitload of cheap, decent-quality, and similar-in-design-and-interface DIFFERENT devices.
This cohesion is no accident. Xiaomi ensures that all its products share:
- Similar Design Language: Minimalist aesthetics and intuitive interfaces make switching between devices seamless.
- Unified User Experience: From setup to daily use, the logic behind each product mirrors the others. This reduces friction and keeps users within the ecosystem.
But how can you do that when you're just a tech startup without your own factories, newspapers, and ships? So we've come to the key point in our story.
Step 3: Scalability Through Partnerships – Why Build When You Can Collaborate?
Here’s where things get interesting. Unlike traditional manufacturers who invest heavily in building everything in-house, Xiaomi took a different route: collaboration.
The thing is, before Xiaomi, Lei Jun was an experienced venture investor. In the late 2000s, he began investing in Chinese tech startups, and in the early 2010s, he launched his own venture fund, Shunwei Capital. Many startups with Lei Jun's money later took off very cool - for example, video services YY.com and iQiyi, the social network Xiaohongshu, electric car companies XPeng and NIO, and others. In short, this guy was very good at investing in startups, and also at making sure that startups with his money produced results.
This is the approach he began to sew into Xiaomi's DNA. In essence, he began to remake the "Xiaomi corporation" into a kind of hybrid of a venture fund and a business incubator. In 2013-2014, Xiaomi launched its venture fund and began investing in startups. But it does this cunningly, as if in layers:
In the center, we have a smartphone, this is the core of the ecosystem. And we need to gradually grow other levels and envelop the user in new layers. Therefore, Xiaomi first invests in products "around the smartphone". And only then, when the first layer of devices around the smartphone is ready, it moves on to the next layers - smart home, household appliances, purifiers/humidifiers, electric scooters and other smart ear sticks. And only then - to the "body kit" in the form of children's toys and branded toilet paper.
Instead of constructing factories or hiring thousands of engineers, Xiaomi partnered with startups and third-party companies. For example:
- Roborock handles robot vacuums.
- Viomi specializes in smart kitchen appliances like kettles and washing machines.
- Ninebot focuses on personal transportation solutions.
But Xiaomi doesn't just give money, it does something else.
Initially, Xiaomi bought about 20-25% in both Huami and Zimi startups. Huami received an exclusive right to manufacture fitness bracelets for Xiaomi, and Zimi - similarly with power banks. Both companies manufactured their devices themselves, but Xiaomi helped with the technology, participated in the design development and ensured full compatibility with its smartphones. But most importantly, both startups were able to sell their products through the online store and Xiaomi boutiques. In essence, Xiaomi gave them money and took these companies under the umbrella of its powerful brand, and in return received uninterrupted supplies of the necessary goods without any hassle with production. A great deal for both parties, a real win-win.
The funniest thing is that Huami (for example) not only remained an independent company. It also produced other products without Xiaomi's participation, and in 2018 it even went on a full-fledged IPO (Xiaomi, by the way, retained its stake).
The same thing happened with other startups: Roborock robot vacuum cleaners, Viomi smart kettles, washing machines and dishwashers, Smartmi air conditioners, fans and humidifiers, Qingping sensors and detectors, Ninebot personal transport and many, many others. All of these are separate independent companies, but at the same time, all of this is Xiaomi.
These partnerships allowed Xiaomi to rapidly expand its product lineup without shouldering the costs of development or production. Instead, Xiaomi acted as both investor and mentor, guiding these startups to align with its vision while leveraging their expertise.
By fostering this ecosystem of innovation, Xiaomi created a win-win situation: startups gained access to resources and branding, while Xiaomi enriched its portfolio with diverse offerings.
Step 4: Focus on Disruptive Innovation – "Top for Your Money" Philosophy
You might ask: "Does this mean that Xiaomi only gives away money and sells other people’s developments?"
No, that's not quite true. Or rather, not true at all. Xiaomi needs to manage a huge product ecosystem (eco-chain), and there are plenty of hard-to-solve tasks.
Firstly, Xiaomi has its own products, as well as its own sub-brands. The flagship Mi smartphones are full-fledged Xiaomi. But with the budget Redmi and Poco it is more complicated. Formally, it is Xiaomi, but if you look closely, not everything is so clear.
Take the iconic Redmi series, for instance. In 2016, the Redmi Note 3 became a bestseller in China and India thanks to its sleek metal body, robust performance, and affordability. Despite costing just $140, it rivaled flagships from other brands. This "top for your money" mantra helped Xiaomi carve out a niche in highly competitive markets.
Xiaomi doesn't just give money and "collect tribute with fitness bracelets and smart kettles", but works closely with startups. Again, we are not just talking about a bunch of different products, but about an ecosystem. This means that all products should be unified and similar in design. It is also desirable that they all be made according to the principle of "disruptive innovation" (aka "top for your money").
But Xiaomi didn’t stop there. They extended this philosophy to every product under their brand.
In addition to smartphones, headphones and all sorts of power banks, Xiaomi has invested a lot of money and resources in smart home devices. Even before Xiaomi, Lei Jun invested in Roborock (the one with robot vacuum cleaners), and later it migrated to Eco-chain. In addition, Xiaomi has smart home appliances Viomi, humidifiers and air conditioners Smartmi, smart bulbs and LEDs Yeelight, sensors, cameras and sensors Aqara and much more. In 2013-2015, the company began testing a separate brand for this whole story, and in 2016 this brand appeared officially: Mijia.
Mijia is a unified brand for a line of various products. It includes more than 100 partner companies, 19 of which will even go public. Xiaomi has shares in some of them, and it only helps others with technology, management approaches, and sales. The main thing is that if a company joins Mijia, then:
- Its products become part of the brand and get this word in the name, and also start selling through Xiaomi channels. As a result, any startup gets a hefty boost in sales and recognition, and the consumer gets a guarantee of quality (they understand that if it says "Mijia", then it’s not just some random no-name stuff, but part of the Xiaomi empire).
- It gets a pass to the Xiaomi startup platform and begins to receive assistance in the form of technologies, knowledge, approaches and useful connections (in essence, it is a business incubator with a single brand).
- Its products will definitely work well in conjunction with other Mijia devices.
As you can imagine, creating, developing and maintaining such a story (and also promoting an umbrella brand and monitoring the quality of all its products) is no cakewalk. Therefore, we cannot say that Xiaomi simply gives away money and then makes money on other people's inventions. No, everything is much more complicated and cooler. And Mijia is just one example.
Step 5: Insufficient range of own goods? Expand it with someone else's!
Here we come to a question: It’s clear with gadgets and all sorts of smart homes, Xiaomi bought up startups and sells their products. But where does all this stuff like toilet paper, sneakers, backpacks, bottles and dog bowls with the Xiaomi logo come from? Is it also being pushed through a business incubator?
Here's an brief explanation. There is a company called Deerma (vacuum cleaners and other household appliances). This is a separate company, not Xiaomi at all. Now watch the hands:
If we look at the Deerma store (on the left), it’s just some thing from Deerma, not a word about Xiaomi. In the central picture, the word "Xiaomi" is also not in the title, but the product is sold in the Xiaomi store. And on the right, this thing is sold in the Xiaomi store, and the word "Xiaomi" is in the product title. In this particular case, it could be a trivial glitch on one of the sites. But in general, there can be two explanations for this situation:
- First, Xiaomi sells a license for its brand to another company. This could be the "Xiaomi" brand, or it could be some other brand, such as Mijia. After that, the other company can sell this product itself, under its own brand or under the Xiaomi brand. Or it can sell it through Xiaomi stores, under its own brand or under the Xiaomi brand. There are many configurations, and they can be intertwined.
- Secondly, Xiaomi does not participate at all, but simply gives its traffic to another company. For example, it allows you to get on Youpin.
For instance, products like toiletpaper, sneakers, and dog bowls bearing the Xiaomi logo might seem unrelated, but they serve a strategic purpose. These everyday essentials keep the brand top-of-mind and deepen customer loyalty.
The Bigger Picture: Building an Ecosystem, Not Just Products
At its core, Xiaomi isn’t just selling individual products; it’s selling an ecosystem. Every device, app, and service works together seamlessly, creating a cohesive experience that encourages users to stay within the Xiaomi universe.
Whether it’s syncing your smartwatch with your phone or controlling your air purifier via the Mi Home app, Xiaomi makes integration effortless. And because the ecosystem is so interconnected, leaving it becomes increasingly inconvenient for users.
Moreover, Xiaomi doesn’t simply throw money at startups or slap its logo on random products. Instead, it actively collaborates, mentors, and monitors quality to ensure every piece fits perfectly into the larger puzzle.
Final Thoughts
Xiaomi’s rise is a testament to the power of strategic thinking, relentless innovation, and bold execution. By treating its ecosystem as a living, breathing entity - and not just a collection of products - Xiaomi has redefined what it means to be a modern tech company.
Let's sum it up. Xiaomi completely changes our idea of a technology company. It is not like Apple, Huawei or any Dell. Xiaomi develops (let alone produces) only a small part of its products - for example, its flagship smartphones. Because a fisherman always monitors the quality of his hooks.
And then there is a tricky Chinese venture onion with several very different layers. There are products that are made with a lot of financial, technological and expert participation of Xiaomi (and here too there are a lot of different options and configurations). There are products in which Xiaomi participated only with money. And there are those where the company is not involved at all, but they have the word "Xiaomi" in their name, or they are sold through its websites and stores (or even both).
This approach allows Xiaomi to earn money from a bunch of different devices and services, sell the lion's share of its smartphones almost at cost and grow at a crazy pace. As a result, Lei Jun is the richest man in China.
What does all this mean for the consumer?
What does all this mean for the consumer? The main advantage is that there is a "smart something" for any occasion at an adequate price. The main disadvantage is the non-zero probability of buying some left-wing junk instead of Xiaomi. That said, based on personal experience, having purchased numerous gadgets either directly from Xiaomi or featuring their logo, none have proven to be of extremely poor quality. While these devices may no longer evoke the same sense of novelty or excitement, they greatly do their work for their money.
Source: habr.com.
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