" Xiaomi's Hardware business will never exceed a 5% profit margin. If it ever does, profits will be distributed back to its customers."
Hello Mi Fans!
Xiaomi launched its Mi 6X yesterday in Wu Han University - the place where Xiaomi CEO Lei Jun graduated from. Lei Jun took some time to share an important announcement about the company after the product launch.
Xiaomi Board of Directors has approved a company's resolution, that states how the company's annual overall after-tax net profit margin on its hardware products should never exceed 5%.
Here are 3 Reasons on why Xiaomi will never exceed a profit margin of 5% on its hardware products from Lei Jun himself.
The following thread is a summarised version of the speech from Xiaomi CEO Lei Jun.
Reason 1: It is inevitable for Xiaomi’s Business Model
Why do we do this? Because we are Xiaomi.
Reason 2: Touching users’ lives and being price sensitive are two inseparable factors. It is the best way to earn the trust of our users.
These 2 factors aren’t empty talk nor frivolous promotion. One must be truly committed to show sincerity and restrain greediness. The limitation of 5% profit margin on our hardware products is our long-term commitment to our users, and it is also a means to spur ourselves.
Reason 3: It’s the only way for Xiaomi to fulfill its mission
Source: Lei Jun's WeChat Account
Throughout the history of businesses, whether if it’s the automotive industry or PC industries, great companies that change the world are the ones that make its products more affordable to allow more people to use them to benefit their lives.
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