Xiaomi is looking to emulate and be compared to Costco Wholesale Corp. and not Apple, the company's co-founder and Chief Executive Officer Lei Jun said during a recent interview at the company's office in Bengaluru, India. Jun explained that Xiaomi has "the same value system" as the Washington-based warehouse retailer that deals in all kinds of goods, adding that the Chinese tech giant isn't exclusively looking at consumer electronics but wants to offer a wide variety of products and services to its customers. While Jun dismissed the idea of Xiaomi dealing exclusively in consumer electronics, he did say all of the company's offerings are meant to be better and more affordable than their alternatives.
Jun's comments imply Xiaomi will be looking to expand its worldwide presence by offering a variety of products at thin profit margins with the goal of generating a majority of its profits from apps and general software services, an approach that stands in stark contrast to how the company once became the most valuable startup on the planet, valued at $45 billion. While delivering Internet-enabled products that offer great value for money proved to be a lucrative strategy for Xiaomi in the past, the company apparently overcommitted to consumer electronics and smartphones in particular. Jun previously admitted Xiaomi grew too fast for its own good, achieving impressive, but completely unsustainable growth. Due to that state of affairs, the Chinese tech giant is now apparently adamant to not only diversify its portfolio but also change its general business strategy, a sentiment that's reflected by Jun's latest comments outlined above.
Xiaomi's business was recently hit by the departure of its Global Vice President Hugo Barra who left to head the Facebook-owned VR company Oculus, and the company's current revenue target is set at "only" $14.5 billion, Jun previously revealed. In addition to the newly implemented business strategy described above, Xiaomi has also recently opted to commit more resources to India where the competition isn't as aggressive as the one in the company's home country. Time will tell whether that approach will pay off in the end, but more details on the matter should be available later this year.