How Xiaomi plans to turn things around in 2016: be like a startup again

After 2014, in which Xiaomi blew everyone out of the water and nabbed China’s top-selling smartphone spot, 2015 was a huge disappointment. Xiaomi has originally planned to sell 100 million phones, but by mid-year flagging sales forced it to revise its target down to 80 million phones, and then it failed to hit even that more modest target. And the company also ran into other issues, like quality concerns about its smart air filter. Obviously, in 2016 Xiaomi does not want a repeat performance.

To address that, Xiaomi reportedly plans to strengthen its offline distribution. In the beginning, Xiaomi’s online direct-sale ecommerce strategy was part of what set it apart from competitors, but this year it’s aiming to find growth by doubling its sales through offline sales channels. In 2015 it likely sold around 28 million phones through offline channels, meaning that it’s aiming for 56 million offline sales in 2016.

Those sales will will come from both Xiaomi’s third-party offline distributors (like electronics retailer Suning) and Xiaomi’s own Apple-Store-like Mi Home stores. It currently has 20 of those, but is planning to build an additional 30 more, a source told Reuters.

But Xiaomi may be adjusting more than its sales targets for this year. Xiaomi CEO Lei Jun has said that 2014’s accomplishments and all of the “number ones” – like being the number one smartphone brand in China, and being the number one smartphone on Singles Day – put a lot of pressure on the company. He is “not letting people talk about those things internally anymore,” he said. “Only the user is important, doing things right is what’s important.”

At Xiaomi, we need to get back to the passion of the early days. We need to be like a startup. We need to strengthen our resolve to make excellent user experiences and products. And we need to wholeheartedly work on doing products well […] I think that’s the core of the problem.

Of course, that’s not to say that Lei or his company plans to be any less ambitious. Despite the decreased focus on “number ones,” Lei’s goal is still to have twenty or thirty Xiaomi products that are worldwide number ones within ten years.