Xiaomi has become a popular manufacturer for offering its customers cost-effective products. According to the CEO of the brand, Lei Jun, the secret lies in the fact that the manufacturer only has a profit margin of 8 to 9 percent.
For Lei Jun, the value of smartphones in general will become bigger as brands bet on 5G technology. However, it believes that Xiaomi will be able to combine a competitive price with the performance of its equipment.
“I think the 8 to 9% profit margin is very low and given that our sales model is based on e-commerce , the price the end consumer pays will be very low, ”says Lei Jun.
“ The thing more importantly, our gross profit margin is very low, and with a very short middle channel, the final price in the market remains very attractive to those who buy, ”he said.
Xiaomi wants to keep prices low with the arrival of 5G
Xiaomi wants to keep its strategy sales even with the arrival of 5G. Remember that Xiaomi is already the fourth best-selling smartphone brand globally.
If Xiaomi maintains competitive prices combined with quality, the end consumer also wins. And in the end, that’s what matters to those who buy a new smartphone.