You are here: Home » News-IANS » Business-Economy
Business Standard

Xiaomi promises to give back to users if net profit margin exceeds 5%

Topics
Business Finance

IANS  |  Beijing 

Xiaomi Chairman, CEO and Founder Lei Jun on Wednesday announced that the company will forever limit the net profit margin after tax for the entire hardware sales -- including smartphones, Internet of Things (IoT) and lifestyle products -- to a maximum of 5 per cent.

Jun promised its users that the company's hardware business will have an overall net profit margin that will never exceed 5 per cent.

"If the margin crosses 5 per cent, then we will find a way to return the excess above 5 per cent to our users," he said in an email to all Xiaomi employees.

"If we sell our products at close to cost and return value to our users, then we can earn the long-term support of our users. Aiming for large volumes with small profit margins will still result in suitable hardware profits for us in the long term," the Xiaomi CEO added.

According to Jun, the company has created a unique "triathlon" business model, encompassing hardware, Internet service and new retail.

"In the past eight years, our business model has been challenged again and again. Xiaomi is the only smartphone in the world that has rebounded after a decline in sales. This miracle, coupled with the results we have achieved as of today, shows how relevant and advanced our model is," the CEO said.

The company launched Mi 6X in Wuhan on Wednesday which is equipped with the high-end Qualcomm Snapdragon 660 processor and the latest AI technology.

"Xiaomi is an engineering-led company. Engineers are constantly looking for the latest technologies to benefit the public and change the world," Jun said.

"At present, the company has exceeded 100 billion RMB in annual revenue and has nearly 20,000 employees," he added.

In the first quarter of 2018, Xiaomi with over 51 per cent growth was at fifth spot in China, Counterpoint Research reported.

The growth was driven by Xiaomi's expansion in the offline segment with aggressive promotions. It also refreshed its Redmi Note series and now has a very strong product portfolio in the mid segment, giving more choice to budget-conscious consumers.

--IANS

na/bg

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Wed, April 25 2018. 17:34 IST
RECOMMENDED FOR YOU
RECOMMENDED FOR YOU