In the past two years, regarding Xiaomi mobile phones, "high-end" is a key word that cannot be avoided.
Starting with the Xiaomi Mi 10 series released at the end of 2019, Xiaomi has been groping in the high-end market for more than two years. During this period, Xiaomi made bold breakthroughs in mobile phone performance and provided users with a lot of experiences beyond expectations, but at the same time, Xiaomi also encountered many problems in product quality and product experience.
However, for any company, the transition from low-end to high-end will not be achieved overnight, and going from 0 to 1 often requires a process. At this time, Xiaomi, in the high-end strategy, has been in a critical period of degeneration from quantitative to qualitative.
At the beginning of 2022, Xiaomi held a high-end strategy seminar, formally established a high-end strategy working group, and put forward the goal of "winning the first place in the domestic high-end mobile phone market share within three years".
This is the first time that Xiaomi has put forward a clear goal for the high-end strategy, and if you study the goal carefully, you will find that it is Apple that Xiaomi wants to replace in the high-end market.
From the previous product benchmarking Apple, to the current sales volume to surpass Apple, Xiaomi has a clear direction of efforts, but whether it can be achieved, the industry has different views. Through Xiaomi's latest 2021 financial report, it will be found that Xiaomi does have enough confidence against Apple.
Sales of high-end mobile phones have doubled
In 2021, Xiaomi achieved revenue of 328.309 billion yuan, an increase of 33.5% year-on-year; adjusted net profit was 22.039 billion yuan, an increase of 69.5% year-on-year.
Among them, Xiaomi's revenue from the smartphone business was 208.9 billion yuan, an increase of 37.2% year-on-year, and the annual shipment of smart phones reached 190 million units, an increase of 30% year-on-year.
The double high growth of revenue and net profit shows that Xiaomi Group is currently in a healthy state of growth, which also consolidates the basic plate for its further development.
The mobile phone shipments achieved a 30% increase, which also outperformed the market. According to Canalys data, Xiaomi's smartphone shipments ranked third in the world in 2021, with a market share of 14.1%, and annual shipments and market share hit record highs. Not only that, among the top five smartphone manufacturers in the world, the year-on-year growth rate of Xiaomi mobile phone shipments is also the fastest.
On these basis, Xiaomi mobile phones have also achieved remarkable results in the high-end market. In 2021, Xiaomi's Chinese mainland high-end smartphones priced at 3,000 yuan or more and overseas prices of 300 euros or more will exceed 24 million units worldwide, far exceeding the level of about 10 million units in 2020.
This data means that Xiaomi Group has achieved a high-speed growth of 140% year-on-year in the sales of high-end models in 2021, and at the same time, in terms of shipments, the proportion of Xiaomi's high-end smartphones has also increased from about 7% in 2020 to about 13% in 2021.
Thanks to the increase in sales of high-end models, the ASP (average selling price) of Xiaomi smartphones in 2021 increased from 1039.8 yuan in 2020 to 1097.5 yuan.
A budget of 100 billion yuan is invested in technology research and development
After more than two years of exploration, Xiaomi found that on the road to promoting high-end, continuous high investment is also indispensable. So last year, on the basis of the "five-year 50 billion research and development plan" proposed two years ago, Xiaomi further proposed a new five-year research and development investment plan, which is expected to exceed 100 billion yuan.
According to the financial report, in 2021, Xiaomi's research and development expenditure reached 13.2 billion yuan, an increase of 42.3% year-on-year. The continuous investment in cutting-edge technology has also brought more breakthrough performance to Xiaomi's high-end models.
For example, on the two high-end flagship models of Xiaomi MIX FOLD and Xiaomi Mi 12 Pro released in 2021, Xiaomi launched the first self-developed professional imaging chip Surging C1 and the first self-developed charging chip Surging P1 respectively.
At the same time, Xiaomi also debuted a liquid lens on the Xiaomi MIX FOLD and launched the "Everything Focus" algorithm on the Xiaomi Mi 12 and Xiaomi Mi 12 Pro.
By the end of 2021, Xiaomi has established a technology map involving 12 major fields and 98 subdivisions, covering various technologies developed and applied by Xiaomi such as smart phones, smart cars, robots, software and algorithms, e-commerce, intelligent manufacturing, and finance.
And these seemingly different fields of direction, but the technology behind it may achieve interoperability. For example, the above-mentioned "everything chasing focus" algorithm comes from the "master tracking technology" of Xiaomi Robot Lab.
In the earnings call, Wang Xiang, partner and president of Xiaomi Group, said that next, in the fields directly related to user experience such as imaging and charging, whether it is software or chips, Xiaomi will continue to invest.
For the planning of future R & D investment, Wang Xiang said that the R & D investment in 2022 will definitely have a fairly good growth, because five years of 100 billion, the average of 20 billion yuan per year, so on the basis of 13.2 billion yuan this year, the absolute value of each next year will become larger.
The new retail layout consolidates the channel foundation
In addition to products, the capacity building of marketing and channels is also the core link for Xiaomi to achieve high-end. Since 2021, Xiaomi has increased its layout of offline channels, and as of 2021, the number of offline retail stores in Xiaomi's Chinese mainland has exceeded 10,200.
In the past year, the number of Xiaomi offline retail stores has increased by 7,000, and 95% of the urban coverage has been achieved, 80% of the county covers and 4% of the township coverage.
It is worth noting that a considerable number of xiaomi's offline channels are open in the mall of the core business circle, coupled with a unified store management system, which is not only conducive to enhancing xiaomi's brand image, but also conducive to making xiaomi's high-end products efficiently reach users.
Changjiang Securities pointed out in a research report that offline channels are necessary for the layout of the high-end mobile phone market, and about 60% of high-end smart phones in China are sold through offline channels, and at the same time, offline channels are also of great significance for the promotion of high-end products.
The data in Xiaomi's financial report also confirms this. It is reported that in the first month after the launch of the Xiaomi 12 series, offline channel shipments accounted for more than 50%.
Generally speaking, the maturity of an offline store requires 9-12 months of cultivation. Therefore, in 2022, at least the operation of thousands of Xiaomi Home stores will mature, and it is worth looking forward to how much these offline channels can help Xiaomi in the high-end market.
Wang Xiang said that for offline channels, Xiaomi will pay more attention to the efficiency of new stores this year, while paying more attention to the improvement of sales and service capabilities, "only by improving efficiency can we truly achieve our grand strategic goals."
Technology-oriented, is one of the three iron laws that Xiaomi has been implementing for many years of development, and with technological innovation as the cornerstone, Xiaomi has opened a climbing road for the high-end market. If the past two years have been the stage of millet exploration and trial and error, then in 2022, millet has adjusted its posture and is ready to launch a comprehensive impact on the high-end market.