Lead:
Today’s millet is also crossing the Great Wall built by itself and knocking on the door of the new decade.
The moat of Xiaomi’s growth is rapidly widening. Just this week, Xiaomi released the Q3 financial report for 2024, with a total revenue of 92.5 billion yuan, and its revenue increased for six consecutive quarters, setting the strongest performance in history.
In the latest Q3 financial report, in addition to the stable chassis of mobile phones, IoT and consumer products, and Internet services, a new business is letting the industry see the explosive potential of Xiaomi, that is, Xiaomi Automobile.
According to the financial report, in 2024, the revenue of innovative businesses such as Q3 Xiaomi Intelligent Electric Vehicle was 9.7 billion yuan, which was almost 10 billion yuan, and the Xiaomi automobile business greatly exceeded market expectations. This kind of achievement can be said to continue the explosion strategy of Xiaomi in the past. Xiaomi Auto is also the first auto business in China New Energy Auto Circuit, which has been listed for less than a year and its revenue in a single quarter is close to 10 billion.
Xiaomi’s car is fast
Since Xiaomi announced to build a car in 2021, Xiaomi Automobile has attracted much attention from the outside world.
Today, when the competition of new energy vehicles is extremely fierce and triumphant, Xiaomi, as a latecomer, was once questioned. Even after many twists and turns, it took Xiaomi only three years to launch Xiaomi SU7, the first automobile product of Xiaomi. This financial report and the recently disclosed data directly give a heavy blow to the voice of doubt from the outside world.
The data shows that since its release in March this year, Xiaomi SU7 has completed the delivery target of 100,000 units ahead of schedule, and will sprint to deliver 130,000 units in 2024. Among them, in October this year, the production and delivery in a single month broke 20,000 units, creating the fastest record of 100,000 new car companies off the assembly line.
The performance of Xiaomi Automobile once again shows us the most efficient way of playing in the era of mobile Internet. This is in line with Xiaomi’s past strategic precipitation. At the beginning of Xiaomi’s business, Lei Jun, the founder of Xiaomi, proposed that the core of Xiaomi is the innovation of business model, which is known as the "triathlon" business model, which is simply "software+hardware+Internet service". This innovative model has enabled Xiaomi’s mobile phone business to quickly open up the market situation, and with the help of Internet gameplay, it has gone all the way from a new player to the top three in the world.
With the continuous expansion of Xiaomi’s business and changes in the market environment. Then, Xiaomi upgraded and proposed a brand-new triathlon "hardware+new retail+internet". In Lei Jun’s definition, the new triathlon includes R&D, product definition, production, user communication, retail delivery and many other connotations.
Fast, has been running through the development process of Xiaomi in the past. However, in order to truly realize triathlon, it is necessary not only to develop and produce leading scientific and technological products, but also to deliver scientific and technological products to users with high efficiency. Only in this way can the efficiency of the whole link be realized.
Today, we saw the best practice of triathlon in Xiaomi Automobile. This high efficiency is not only reflected in the rapid growth and capacity climbing, but also in the coverage of channels. As of September 30, 2024, 127 Xiaomi automobile sales stores have been opened in 38 cities across the country, opening more channels for Xiaomi automobile sales. According to third-party data, the sales volume of Xiaomi SU7 in October ranked first in the sales volume of new power cars, first in the sales volume of cars over 200,000 and first in the sales volume of medium and large pure electric cars.
In fact, Lei Jun mentioned the key role of efficiency in a media interview not long ago. He said that 14 years ago, Xiaomi made a mobile phone to pursue super high cost performance, through the channel innovation of creating explosions and Internet models, and even the new retail model of Xiaomi House in the later period. This kind of success is also applicable to today’s car making.
The slowness of Xiaomi car
Although Xiaomi Automobile’s performance has exceeded market expectations shortly after its release, building a car is a highly complex supply chain management, and the production and assembly of each component must be accurate to the second, which will test a company’s system integration ability in technology, channel, delivery and marketing.
At the initial stage of Xiaomi Automobile, it was strategically determined to "invest 10 times and seriously build a good car", and Xiaomi SU7 achieved a staged competitive advantage in the market, which is a fact that everyone can see with the naked eye above the water. However, in the matter of building a car, the investment under the water really determines the core competitiveness of an automobile company, and these will not work miracles in the short term, but the test is the ability of long-distance running, which requires slow work and fine work.
As we all know, building a car itself is a business that burns money. Li Bin, the founder of Weilai, has repeatedly mentioned in public that the threshold for building a car should be at least 40 billion. Xiaomi naturally knows the depth of the car-making industry. At the beginning of Xiaomi’s car building, Lei Jun announced that he would invest 10 billion US dollars and 10 billion yuan in the first phase in the next decade, which requires strategic determination and strategic patience.
According to the financial report of the new quarter, under the premise of continuous investment in building cars, Xiaomi’s cash reserve reached 151.6 billion yuan, laying a solid foundation for the rapid development of Xiaomi Automobile.
Adequate cash reserves constitute the ballast stone for the rapid development of automobile business. Today’s new energy vehicles, strength is one aspect. It is not only the price and face value, but also the hard-core intelligent driving technology, which is also the consideration standard for users to choose a car. Fourteen years ago, when Xiaomi started his business as a mobile phone, it started with model innovation. At one time, he ignored the underlying technological innovation, resulting in a rapid growth rate, but the foundation was not solid, which led to many setbacks later.
This also made Xiaomi determined that in the automobile business, he would not take shortcuts, purchase or OEM, and start from the core technology. So we saw that Xiaomi almost invested in the research and development of the core technology of the automobile. And technical resources. In 2024, Q3 Xiaomi’s R&D investment increased to 6 billion yuan again, and it is estimated that the R&D investment will exceed 24 billion yuan in 2024. As of September 30, 2024, the number of Xiaomi R&D personnel exceeded 20,000.
Under the heavy investment, Xiaomi also frequently showed a muscle. Not long ago, Xiaomi officially released four core pre-research technologies of smart chassis, full active suspension, super four-motor system, 48V brake-by-wire and 48V steering-by-wire to help realize fully automatic driving. In just one year, Xiaomi Automobile released three generations of chassis technology, which truly achieved mass production, release and pre-research generation.
At the same time, Xiaomi has also achieved remarkable results in the field of intelligent driving, another technical highland of electric vehicles. Xiaomi Intelligent Driving is fully connected to the end-to-end big model and named HAD. At the end of December, 2024, Pioneer Edition was launched. By November, 2024, the activity rate of Xiaomi’s intelligent driving was over 85%, the total mileage was over 80 million kilometers, and NOA mileage accounted for 82.4% of the intelligent driving mileage. This fully reflects Xiaomi’s breakthrough progress in the field of intelligent driving.
It can be seen that Xiaomi has made plans for long-distance running in the automobile field, regardless of talent investment, cash reserve, research and development and technology, and has reserved sufficient ammunition. Xiaomi Automobile is not fighting alone, with the resources of the whole group behind it.
Lu Weibing, partner and president of Xiaomi Group, said frankly that the success of Xiaomi Automobile is the success of Xiaomi’s overall resources and capacity support. The current delivery, the speed of building factories, the speed of store construction and the speed of delivery all reflect all the capabilities of the entire Xiaomi Group.
And these resources and abilities, Xiaomi has been precipitated for 10 years, which is a typical "slow" running sport. In fact, as a century-old track, today’s new energy automobile manufacturers, including all Xiaomi, just ran out of the first kilometer of the marathon.
Go firmly to the high end.
Explosions and cost-effective gameplay have enabled Xiaomi’s mobile phone to get a bonus in the era of mobile Internet, but it has also taught Xiaomi a lot on the high-end road. The release of red rice mobile phone is a typical case.
Lei Jun recalled this experience in Xiaomi’s first business thinking book "Thinking about Xiaomi’s Entrepreneurship". He said that Xiaomi neglected the systematic construction of the brand in the early days and made some key decisions rashly. The naming of Redmi confuses the boundaries between Xiaomi and Redmi. Although it is defined as different product lines, it objectively pulls Xiaomi’s early fever and high-end brand to a single low price. It was not until the emergence of Xiaomi MIX that Xiaomi’s high-end road improved. Since then, reshaping the high-end brand image has become a battle for Xiaomi.
After years of product, technology and brand ability polishing. Xiaomi’s high-end road has gradually paved the way. The banner of "cost-effective" has been taken over by Redmi, whose models are mainly concentrated in the price range below 3,000 yuan, while the lowest positioning of Xiaomi brand is Civi series, and the price is basically above 2,500 yuan. In addition, Xiaomi’s MIX folding screen series and digital flagship series mainly cover the market of more than 4,500 yuan.
In the new stage, Xiaomi is gradually getting rid of the traditional "cost-effective" label and moving towards the high-end market. Among them, the high-end share of the basic mobile phone business has steadily increased. According to the third-party data, in Chinese mainland, the market share of Xiaomi in the price range of 3,000-4,000 yuan increased by 9.3 percentage points year-on-year to 18.1%, and the market share in the price range of 4,000-5,000 yuan increased by 9.7 percentage points year-on-year to 22.6%. A single high-end product, Xiaomi 15 series, has achieved a breakthrough in shipment of 1 million units faster than the previous generation.
Lu Weibing, the partner and president of the Group, said at the Q3 performance conference call that Xiaomi machine has reached the price range of 4,000 yuan to 6,000 yuan, which fully demonstrates the effectiveness of the end-of-life approach, and will focus on breaking through the price range of 6,000+.
The appearance of Xiaomi automobile has also added a fire to the high-end road of Xiaomi, which is not only conducive to the high-end of Xiaomi automobile, but also can enhance the continuous breakthrough of Xiaomi Group’s high-end strategy. The appearance of automobiles has broken the monopoly of Tesla in the period of 200,000-300,000 pure electric cars. The popularity of performance automobiles is also a verification of the overall brand end.
In October of this year, the prototype of Xiaomi SU7 Ultra made its debut at the New North Circuit, and achieved a good result of 6 minutes 46 seconds 874, becoming the fastest four-door car at the New North Circuit. This is not only the certification of Xiaomi’s technological innovation breakthrough, but also an important milestone for China automobile brand to move towards high-end and challenge traditional luxury brands.
The bright performance of Xiaomi Automobile also means that the strategy of Xiaomi’s "all-ecological" group is forming a cohesive force. The synergistic effect of home state will also bring potential for high-end development.
Xiaomi’s new 10 years: standing at a new starting point, "the whole ecology of people and cars" is fully exerted.
In October, 2023, Xiaomi Group strategically upgraded "the whole ecology of people, cars and homes", released the operating system 澎湃 OS1 with unified integration of multiple devices, and completed the important infrastructure of "the whole ecology of people, cars and homes".
At that time, Lei Jun said that the strategic goal of Xiaomi’s new decade (2020-2030) is to continuously invest in the underlying core technologies and strive to become a new generation of global hardcore technology leaders. In order to achieve this goal, the whole ecology of people, cars and homes is the support and the core landing scene of science and technology.
Just in the latest Q3 financial report, we have seen that Xiaomi has completed the puzzle of "the whole ecology of people and cars", and the growth space opened by various businesses for Xiaomi has also completed the layout of three growth curves.
First, personal devices with mobile phones, tablets and wearables as the core; The second is the household equipment with air conditioner, refrigerator and washing machine as the core; The third is that the travel equipment with cars as the core is the third growth curve. Mobile phones, household appliances and cars, although Xiaomi has achieved very high-speed growth, the market capacity is large enough, which is still only the beginning compared with the huge market.
Talking about Xiaomi’s strategy of "people and cars are all ecological", China Merchants International believes that under Xiaomi’s "people and cars are all ecological" system, thanks to the increase of global share and the landing of AI applications, Xiaomi’s mobile phone /AIoT basic disk business will continue to be strong, and EV business will achieve rapid growth. With the gradual formation of a closed loop of "the whole ecology of people, cars and homes", the commercial moat of Xiaomi will be accelerated and widened.
In the past five years, global uncertainty has challenged many enterprises. But for Xiaomi, in the past five years, it has formed cross-category complementarity and global market complementarity, which is enough to resist external uncertainties such as category industry cycle and global market development cycle. Internally, Xiaomi has improved the system, process, informatization, organization and talent construction, laying a solid foundation for long-term development. At the same time, Xiaomi also defined three iron laws: technology-oriented, cost-effective, and always being the coolest product. There is no doubt that Xiaomi has stood at a new starting point and is well prepared.
"Across the Great Wall We can reach every corner in the world." This is the first Chinese e-mail sent overseas from Beijing on September 20th, 1987. This also indicates that the Internet era has quietly knocked on the door of China. Today’s millet is also crossing the Great Wall built by itself and knocking on the door of the new decade.
