Xiaomi is in the news again today. The relatively new 5-year old Chinese mobile company is rising to the challenge of a connected world. According to Forbes, Xiaomi is looking for funding that can raise its market valuation to $40 billion. That is four times its current valuation of $10 billion.
As of now, Xiaomi has not made an official comment on this, although according to Forbes multiple sources have confirmed the news. If this round of funding goes the distance then Xiaomi will be valued higher than Sony and Lenovo which are currently valued at $19.5 billion and $15.6 billion respectively. In that case Xiomi will become the world’s most valuable private tech company.
Xiaomi’s sales are still increasing. They sold 17.3 million devices in the third quarter of 2014. According to IDC, this amounts to an increase of 211.3% in sales when compared to the same period last year. Korea’s Samsung, on the other hand, sold 8% less units this year. Xiaomi’s local rival Lenovo was able to increase their sales by 38% compared to the previous year.
Xiaomi is doing really well in terms of sales so far and it hasn’t even reached worldwide markets. Many people countries in Asia have not been able to get their phones. As for the rest of the world, people have to deal with third-party sellers and scalpers to get their hands on overpriced Mi devices. If Xiaomi enters the US and Europe, they will most likely have to deal with legal issues regarding the design of their devices and user interface.
In case you are wondering if Xiaomi is actually making money selling devices at such a cheap price, we don’t really know. Although it seems that they are making money because their distribution strategy has saved a lot of money for them and their customers. They pretty much only sell their products online and spend little or no money on marketing their products. They are making money from videos, music, apps. As for marketing, they depend on users to create the demand by word-of-mouth. In a world connected by social networks, this strategy has worked well well so far.