Sihai network

Xiaomi prospectus open letter Leijun open letter full text reading

4hw.com.cn: Recently, Xiaomi company's news of listing has continued to increase. Recently, Xiaomi submitted an application for listing to the Hong Kong stock exchange. Xiaomi listing is considered to be the largest IPO in the world this year. In the prospectus, Lei Jun, chairman and CEO of Xiaomi, also paid attention to the letter. Let's see the full text of Lei Jun's letter.

The following is the full text of Lei Jun's open letter:

Hello! Thank you for your attention and support to Xiaomi. When you open this document, you will see not only a thriving company, but also a new business blueprint supported by courage and trust.

Here, I would like to explain to you who Xiaomi is and why Xiaomi struggles.

Xiaomi is not a pure hardware company, but an innovation driven Internet company

Specifically, Xiaomi is an Internet company focusing on mobile phones, smart hardware and IOT platform. Our mission is to always adhere to the good products of "touching people's hearts and high price", so that everyone in the world can enjoy the wonderful life brought by science and technology.

Every day in the past 8 years, the vision of "making friends with users and being the coolest company in users' hearts" has driven us to innovate, pursue the ultimate products and efficiency, and achieve a millet that constantly creates a miracle of growth.

When Xiaomi was founded in April 2010, my partners and I had only one simple idea: to make a smart phone that we like and feel cool enough. Of our eight co founders, six are engineers and two are designers. They are all crazy 'enthusiasts' of consumer electronic equipment.

The eight words of "touching people's hearts and generous prices" are an integral, two-sided and inseparable whole, far exceeding the ultimate product expected by users. Only when "generous prices" can be achieved, can people really be touched. Innovative technology and top design are the pursuit of millet gene. Our engineers are absorbed in exploring technologies and products that have never been tried before. They repeatedly Carve every detail, and each product they are determined to produce is far beyond the expectation of users. We believe that the courage to break the stereotypes and the belief of continuous improvement is the key to win the appreciation and support of users.

It's not just technology. We value a culture of bold innovation. From the frontier exploration of mobile phone technology, screen and chip technology to more than 200 global design awards won in recent years; from the "Triathlon" business model to the "eco chain" company cluster; from the "user participated Internet development model", to Xiaomi's online and offline integration of high-efficiency new retail & hellip; & hellip; innovation spirit in Xiaomi's vigorous development and penetration into every corner, and push We are constantly accelerating the pace of exploration.

At present, we are the fourth largest smartphone manufacturer in the world, and create many intelligent hardware products, among which many categories sell the first. We have also built the world's largest consumer IOT platform, connecting more than 100 million intelligent devices. At the same time, we have 190 million MIUI monthly active users and provide them with a series of innovative Internet services.

It is not these numbers that make us more proud. The face of a series of industries such as China's smart phones and smart devices has been completely changed by our presence.

We have promoted the rapid popularization and quality improvement of smart phones in China, which has laid a solid foundation for the rapid outbreak of China's mobile Internet. The booming development of mobile payment, e-commerce, social network, short video and other industries in China depends on the influx of hundreds of millions of people into the mobile Internet. China, the world's largest market, behind the leapfrog development and maturity of the mobile Internet industry, we are also recognized to have made a lot of contributions.

Good companies make profits, good companies win hearts and minds. What makes us proud is that we are a rare high-tech company with 'fan culture'. The enthusiastic users known as' rice noodles' are not only global in number, but also loyal to our brand and actively participate in the development and improvement of our products.

The business model of Xiaomi has been fully verified

As a young Internet company, Xiaomi's development is not all smooth. In 2016, our market share has declined. We are clearly aware that there are still many foundations behind the rapid development in the previous years, so we take the initiative to slow down and make up lessons. In 2017, Xiaomi successfully completed the three supplementary tasks of "innovation + quality + delivery" and quickly returned to the forefront of the world.

As far as we know, except Xiaomi, there is no mobile phone company that can successfully reverse the decline in sales.

After a long-term and stable development, Xiaomi has experienced the necessary cultivation. Our management is more orderly, our talent reserve is more substantial, our technology accumulation is more profound, and our supply chain and capacity management capabilities are more powerful.

More importantly, our business model has been tested and fully validated.

Xiaomi is not a pure hardware company, but an innovation driven Internet company. Although hardware is our important user portal, we don't expect it to be our main source of profit. We have designed products with excellent performance and quality close to the hardware cost pricing, and delivered them directly to users through our own or direct supply of efficient online and offline new retail channels, and then continue to provide users with rich Internet services.

This is our original "Triathlon" business model: Hardware + new retail + Internet services. The achievement of millet so far illustrates the strong vitality of this model. In just seven years, our annual income has exceeded 100 billion yuan. This growth rate is beyond the reach of many traditional companies.

The improvement of efficiency comes from the reduction of operation cost, especially the transaction cost when delivering products to users. Millet 's unique business model makes the goods both good and cheap to achieve, and creates the basis of user trust.

Always adhere to the comprehensive net interest rate of hardware not more than 5%

At the beginning of Xiaomi's founding, we had a grand ideal: to change the generally low efficiency in the business world.

A shirt that costs $15 can be sold for $150 in Chinese stores at an amazing 10 fold rate. There are countless examples of five to 10 times more for a pair of shoes and 20 times more for a tie.

But I still can't understand why the efficiency of production and circulation can't be improved for a long time? Why do users pay for the huge loss in the middle of business operation? Why do all the 'cost down' efforts only focus on the 10% of the production cost, and never focus on the 90% of the unnecessary operation and transaction cost?

Xiaomi has the courage and determination to promote a profound revolution in business efficiency. At the beginning of 2011, when Xiaomi ushered in the first annual meeting, I said to more than 100 employees and their families in the company that we would like to make smart phones with the best performance and experience for only $300 - at that time, the mainstream smart phones generally sold for more than $600.

Great companies are making good things cheaper and cheaper. They devote every effort to making good products, and make every penny paid by users worthwhile.

Users are the core of all our business operation considerations. On Xiaomi's way forward, we have been thinking: since ancient times, the business world has changed a lot, and what has remained unchanged beyond all kinds of business model topics?

Users' expectations for 'moving people and high price' products are Xiaomi's answer.

Many of our users say that when you enter Xiaomi's home or log into Xiaomi mall, you can safely 'buy with your eyes closed' because the quality and price must be the best. This is our greatest affirmation and our ultimate pursuit.

Without the trust of users, there will be no efficiency we pursue. The trust of users is the cornerstone of Xiaomi mode. Efficiency is the soul of millet mode. Continue to win the trust of users, and any business of our company will be invincible. A company that truly achieves world-class efficiency will have the ability to go through the economic cycle, continue to seize new opportunities emerging in the industry and maintain excellent operation performance for a long time.

"Touching people's hearts and generous prices" are not empty words. These eight words are our values and spiritual beliefs. Here, I would like to make a commitment to all existing and potential users: from 2018, the comprehensive net interest rate of Xiaomi's overall hardware business will not exceed 5% per year. If there is any excess, we will give it back to the users.

Because, we always firmly believe that, compared with the pursuit of one-time hardware sales profits, the pursuit of product experience is more promising; compared with the channel level by level price hikes, the genuine materials and good pricing ultimately win more hearts and minds.

We always firmly believe that our belief that consumer goods should take the initiative to control reasonable profits will become an irresistible trend of the times, and any action that is greedy for high gross profit will lead to a road of no return.

Therefore, I would like to explain to you that we will pay more attention to the maintenance of long-term user value, the business value of Xiaomi and your investment value, as well as the constant amplification and Realization of user value.

The comprehensive net interest rate of hardware will never exceed 5%, which is the proof of Xiaomi's efficiency. We know that it will take time for Xiaomi's idea to finally become a consensus of the society, but time will be Xiaomi's friend, and our stubborn persistence, continuous investment and resolute implementation will eventually lead to the realization of our ideals.

Building a global and open ecology, our journey is the sea of stars

Today, Xiaomi has reached a historic milestone. Facing the future, the global business ecosystem established by Xiaomi has an imaginative prospect.

Xiaomi is not going to build a closed commercial empire. Xiaomi is not only an innovative technology company, but also the founder and promoter of the lifestyle in the digital era. Let everyone in the world enjoy the wonderful life brought by science and technology. To achieve this goal, one millet is far from enough. It needs 100 or more millet to build a rich and prosperous new business ecosystem together.

"Germany is not alone, there must be neighbors". Through the unique 'ecological chain mode', Xiaomi has invested and driven more like-minded entrepreneurs to build a three-tier product matrix of mobile phone accessories, smart hardware and consumer products around the mobile phone business. Now, Xiaomi has invested in more than 90 ecological chain enterprises and changed hundreds of industries. In the future, the number will be even larger.

Such a change is not just happening in China. Take the smartphone business as an example. In more than 70 countries and regions that have entered the global market, we have achieved the first share in India and ranked the top in 15 countries. We are and will continue to prove that millet model has the universality of rapid replication in the world.

Establish a global open ecology, so that millet has more opportunities for long-term development, broader borders and more stable foundation. The era of big data and artificial intelligence is just around the corner. We believe that a large number of unique consumption and behavior data generated by our global ecological platform can make us more sensitive and accurate to understand the needs of users and win huge advantages for us in the future.

Xiaomi is an engineer culture leading company. The dream of engineers is to continuously explore advanced technology and benefit as many users as possible. It is our vision to be the coolest company in users' mind. We are strong