Behind Xiaomi’s “Thousands of Stores Open Together”, what are Lei Jun and Lu Weibing playing?

Xiaomi has another big move.

On January 9, Xiaomi announced that a total of 1,003 Xiaomi Homes will open at the same time, with new stores covering 30 provinces and 270 counties and cities across the country.

01

Xiaomi’s Home “opens thousands of stores at the same time”, Lu Weibing fulfills his promise

At the Redmi Note 9 series launch conference at the end of 2020, Lu Weibing, President of Xiaomi Group China, once set a Flag in public: “In the next year, let every county have a Xiaomi home, and let every Mi fan have a Xiaomi home. “.

Earlier, Lu Weibing had publicly collected information from netizens to understand which county-level cities Xiaomi did not open stores, showing a strong willingness to increase the construction of offline channels in third-, fourth-, and fifth-tier cities.

More than a month later, Lu Weibing fulfilled his promise. Lu Weibing said on social media on January 8: On January 9, Xiaomi’s home #1000 stores will open together#, which is a small step for us to fulfill our promise. In the future, Xiaomi will continue to deepen the offline market.

Lu Weibing said that the simultaneous opening of thousands of stores has at least three significant implications for Xiaomi China. The first signifies that Xiaomi has created and verified a new model of offline retail; the second signifies that Xiaomi has become a new force in the retail industry. In the retail industry, stores are assets, stores are strength, and stores are moats. Xiaomi, which has opened thousands of stores, now truly has the combat capability of an organic system; the third meaning means that Xiaomi is about to embark on a new starting point in the battlefield in China.

On January 9, the same day that the millet home thousand stores opened, Lu Weibing posted on social media that Xiaomi attached great importance to the quality of the millet home store opening, and set the quality of opening a store higher than the speed of opening a store as the first principle of opening a store. Lu Weibing announced the three major prohibited behaviors in Xiaomi Home:

1. It is strictly forbidden to recommend disturbing products to users;

2. Strictly prohibit the increase in sales of products;

3. Strictly prohibit the tying of products in short supply.

Although the three severely banned acts announced by Lu Weibing are not all industry problems, Brother Xi still welcomes the first one. After all, sometimes the “harassing” recommendations of some businesses are really annoying.

Judging from the reactions of Lu Weibing’s social media fans to the “Three Severely Prohibited Behaviors”, everyone still agrees with Xiaomi’s approach.

02

Behind Xiaomi’s “Thousands of Stores Open at the Same Time”

Xiaomi in 2020 will undoubtedly be a big winner in the mobile phone market.

In November 2020, Canalys, Counterpoint, and IDC, the three authoritative research institutions in the global mobile phone industry, all released survey data on the sales of global mobile phone manufacturers in the third quarter. Data from the three companies also showed that in the third quarter, the top five in the world were the same as in the previous quarter, with Samsung, Huawei, Xiaomi, Apple and vivo continuing to occupy the top five. However, the order of the rankings has changed this time: Apple dropped one place, leaving the top three in a rare way and ranking fourth. However, Xiaomi has grown substantially, replacing Apple for the first time in many years and ranking third in the world.

On November 24, 2020, Xiaomi released its 2020 Q3 financial report. Data show that in the third quarter of 2020, Xiaomi’s smartphone revenue reached RMB 47.6 billion, a year-on-year increase of 47.5%; smartphone shipments reached 46.6 million units, a year-on-year increase of 45.3%.

More importantly, Xiaomi’s smartphone business has grown rapidly in the domestic market, with both volume and price rising. According to Canalys statistics, in the third quarter of 2020, Xiaomi’s market share of smartphone shipments in mainland China increased from 9.0% in the third quarter of 2019 to 12.6%, ranking among the top four. At the same time, benefiting from the continuous increase in the proportion of high-end smartphone sales, Xiaomi’s domestic smartphone average selling price (“ASP”) continued to increase, with a year-on-year increase of 14.7%.

The financial report data also shows that in the third quarter of 2020, the revenue of Xiaomi IoT and consumer products segment reached RMB 18.1 billion, a year-on-year increase of 16.1%.

Under the dual pressure of the epidemic hitting the global economy and the domestic mobile phone market downturn, it is very admirable that Xiaomi mobile phones can achieve such results.

Xiaomi mobile phones can achieve such achievements, in addition to their own efforts, but also due to changes in the global mobile phone market environment. In 2020, due to well-known reasons, Huawei, the largest domestic mobile phone brand manufacturer, encountered a “supply chain” crisis, which in turn slowed its progress in the mobile phone market. The helplessness of Huawei mobile phones has provided a great opportunity for mobile phone manufacturers such as Xiaomi.

In 2020, Xiaomi has not only increased its global market share, but also greatly improved its brand power and product power. Its high-end strategy that has been steadily advanced is the best illustration.

After surpassing Apple to become the world’s third largest mobile phone manufacturer, Xiaomi’s mobile phone, which has ushered in a good recovery opportunity in China, has more room for imagination in 2021.

How to get one step closer in 2021?

Rapidly increasing the number and scale of Xiaomi Home’s stores is an effective means to achieve this goal.

03

Lei Jun and Lu Weibing are in the next big move

Brother Xi believes that it is the goal of Xiaomi Home to “open thousands of stores at the same time”, but that is not the only goal of Xiaomi Home.

Behind Xiaomi’s “Thousand Stores Open Together”, Lu Weibing is making the next big move.

Since 2016, Lei Jun has been promoting the construction of offline channels of Xiaomi Home. In the early stage of the construction of Xiaomi Home, Lei Jun paid more attention to the floor-to-ceiling ratio of the store.

Searching for Xiaomi Home, we can see how the “Home of Xiaomi” achieves a floor effect of 270,000 yuan per year and a monthly sales of over 1 billion? “, “How to make Xiaomi Home’s floor effect second only to the Apple Store”, “Xiaomi who doesn’t understand retail”, “Lei Jun: Xiaomi Home’s floor effect is 20 times that of traditional retail!” _LianShang.com” such a striking title.

Lei Jun himself has also published Xiaomi’s data: Xiaomi’s home stores are about 200 square meters on average, with an average annual turnover of between 65 million and 70 million, and a floor effect of 270,000 yuan a year. It is understood that currently the world’s most efficient retail store is Apple, which is about 400,000 yuan.

It’s no wonder that Lei Jun values ​​the performance ratio of Xiaomi Home. After all, the direct target of Xiaomi Home’s establishment was the Apple store.

For benchmarking Apple stores, the ping-effect ratio is the core indicator. This core indicator is both a direction and a constraint for Xiaomi. The direction is that Xiaomi Home always has a measurement standard. The constraint is that it slows down the opening of Xiaomi Home, which in turn affects the progress of Xiaomi’s entire offline channel construction. Therefore, we can see that it was not until December 2020, when the flagship store of Xiaomi Home in Chengdu Mixc City was completed, that Xiaomi Home completed Lei Jun’s previous plan to open 1,000 stores.

It should be said that Xiaomi opened 1,000 Xiaomi Homes in 3 years not slow, but the problem is that his progress opponents are running too fast, such as Huawei. According to media reports, at the end of 2019, Huawei had 65,000 retail locations across the country, including 6,000 authorized experience stores and 2 directly-operated stores.

Brother Xi believes that the reason for the relatively slow construction of Xiaomi House in the past few years is that Lei Jun mistakenly regarded Apple as the benchmark and placed too much emphasis on the performance ratio.

Xiaomi’s recent practice of “opening thousands of stores at the same time” shows that Lei Jun has re-adjusted the operation idea of ​​Xiaomi’s home and began to build Xiaomi’s home as an “independent explosion” other than Xiaomi mobile phones.

Judging from the current information, Lu Weibing is the specific trader who executed Lei Jun to build Xiaomi Home into an “explosive product”. (Home of Xiaomi) Double explosive products complete the important task of integration, coordination and integration.

The purpose is to let the “offline explosion models” (Xiaomi Home) and the “online explosion models” (Xiaomi mobile phones) guide each other, empower each other, and promote each other.

It should be said that this is another “big plan” of Lei Jun. Once this plan of Xiaomi Home is completed, Lei Junjin can split it into the market (with the same name as Chuangyoupin), and Tu can put it into Xiaomi’s package of affairs and become a new increment.

However, this is a plan that tests Xiaomi’s output management standards, and it is not easy to make it happen.

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