On the afternoon of August 29th, Wang Chuan, the co-founder of Xiaomi Technology and the head of the company's TV division, published a lengthy post on Weibo titled "Why Is Mi TV Taking the Lead in Lowering Prices?" In this post, Wang Chuan discussed the recent decline in the prices of upstream raw materials and announced that some of Xiaomi TV's products had begun reducing their prices.
At the start of his article, Wang Chuan mentioned that in the latter part of last year, the prices of TV panels and other raw materials surged dramatically. Xiaomi "had no choice but to make a slight price adjustment," and it was noted as having one of the smallest price increases across the entire TV industry. Now, with the drop in upstream material prices in the second half of the year, Xiaomi TV decided to pass these savings directly to its customers. The 4A series of Mi TVs saw price reductions ranging from 43 inches to 65 inches, with the maximum discount reaching 1,000 yuan.
In response, Wang Chuan wrote in the article, "Sticking to high value for money is the core value of Xiaomi." He questioned, "How low can we price this series of TVs without losing money?"
Wang Chuan also mentioned in the article that during the first half of this year, the overall TV market was declining, yet Xiaomi TV experienced rapid growth in contrast. For the first half of 2017, Xiaomi's TV line sales increased by 91.2% year-over-year.
Here’s the text of Wang Chuan’s article:
Why Did Mi TV Cut Prices?
Yesterday, we announced price adjustments and became the first TV brand to reduce prices entirely. Many of you might recall that TV panel and other raw material prices skyrocketed in the second half of last year. Xiaomi held off on making any adjustments until the beginning of this year, reluctantly deciding on a minimal price hike. This marks the smallest price increase in the entire TV industry. In the second half of this year, we noticed that upstream raw material prices had fallen. Our immediate response was to return these savings to our users. The 4A series of Mi TVs saw price reductions from 43 inches to 65 inches, with the maximum price drop reaching 1,000 yuan.
Adhering to High Growth Rates Despite Contrarian Trends
Some say Xiaomi TV is being overly aggressive? Not at all. Sticking to high value for money and saving every penny for our users is at the heart of Xiaomi's philosophy. In May of this year, we unveiled the world’s thinnest LCD TV, the Mi TV 4, which measures just 4.9mm thin—30% slimmer than an iPhone. Priced at only 3,999 yuan for a top-tier 55-inch TV, it’s nearly the same as the price of an ordinary 55-inch TV. In March of this year, when other TV companies were launching new spring products with sky-high prices, we introduced the high-performance series—Mi TV 4A, starting at 2,099 yuan. Industry insiders dubbed it a "price-busting" TV.
Why Set Such Prices?
Lei Jun often emphasizes that Xiaomi is a company rooted in kindness. It's a company that adheres to cost-based pricing and pursues low gross margins. We have the capability to sell products for 9,999 yuan but choose to price them at 3,999 yuan. Even with falling raw material prices, we remain committed to cost-based pricing and promptly reduce TV prices.
Xiaomi was founded by a team of engineers. While other companies view technology as a tool for generating high profit margins, our mindset as engineers is straightforward. Our hard-earned technological advancements should benefit millions of users, not serve as tools for manufacturers to maximize profits. This is our dream at Xiaomi: "Let everyone enjoy the technology."
We strive to be friends with every user. Lei Jun often says that if you're constantly thinking about how to earn more than 100 dollars a day, how can you truly connect with others? Instead, you should focus on how to save 100 dollars every day.
Over the past five years, Lei Jun hasn't imposed KPIs on us. We haven't discussed sales, revenue, or profits. We believe that as long as we create excellent products, these metrics will naturally follow—and indeed they have.
In the first half of this year, the overall TV market declined. Even powerful TV companies faced various challenges. However, Mi TV has good news: it achieved rapid growth. According to Zhong Yikang’s data, Xiaomi’s TV line sales increased by 91.2% year-over-year in the first half of 2017; the “First Half of 2017 Home Grid Purchase Analysis Report,†jointly released by the CCID Research Institute and the China Electronics News, showed that Xiaomi TV was the TV brand with the largest increase in sales volume online; according to Ovum Cloud Network’s statistics for the second quarter of this year, Xiaomi TV claimed the top spots in 49-inch and 55-inch mainstream online sales. During this year’s 618 shopping festival, we swept the JD and Tmall platforms’ sales champions for 43-inch, 49-inch, 55-inch, and 65-inch sizes. These sales rankings filled us with excitement, but what made me proudest was that the repeat purchase rate of Xiaomi TV ranked number one across the entire television industry, including foreign brands. This clearly shows that after experiencing a Xiaomi TV, users recognize what truly represents good value.
How Can We Make Money at Low Prices?
Why, then, is 2017 a winter for the TV industry, yet a spring for us? Many people assume we’re losing money, but I want to assure everyone that we’re profitable. Why is this possible?
As an internet company, we have a significant core advantage in television.
First, we have an edge over traditional manufacturers in the upstream supply chain. Today, as the entire manufacturing sector faces overcapacity, we don’t own factories. Instead, we collaborate with the best and most efficient manufacturers globally. By leveraging Sony’s, Samsung’s, and Sharp’s production capabilities, we can create Mi TVs with superior craftsmanship.
Second, we are gaining more advantages in sales channels. Xiaomi’s self-built Mi Mall and home stores are highly efficient channels. We were the first TV brand in the industry to sell online and offline at identical prices; whereas traditional manufacturers allocate 40% of their revenue to various offline channels, leading to different pricing models. They exploit user ignorance, relying on inflated margins to secure high profits. The industry boasts: “Don’t pit, don’t sell TV.â€
Third, our business model is a tipping model—Internet services. If users appreciate our products, we’re confident that the positive user experience will encourage tips. Mi TV’s average daily activation rate is as high as 68%, far surpassing the industry average of 56%. This indicates that Mi TV users frequently turn on their TVs. Xiaomi has over 20 million TV users and over 10 million monthly active users, making it China’s largest Internet TV platform. With such a large and active user base, our e-commerce, membership, and other Internet revenues have grown exponentially. This allows Mi TV to remain profitable even without hardware profits, creating a healthy closed-loop business.
The Company from the Future
Mi TV’s dream is to “create the best TVs so that everyone can afford them.†The three advantages in supply chain, sales channels, and business model allow us to unify the seemingly contradictory ideas of “the best TV†and “everyone can afford it.†This enables us to invest substantial effort into refining every product while maintaining high cost performance. Over the past few years, many companies rushed to capture the market, but we focused on improving quality, sound, craftsmanship, content, and intelligence incrementally. Each aspect achieved top-level status in the industry. For instance, Chinese TV manufacturers often overlook sound quality, but we invested heavily. We collaborated with world-class acoustic experts to establish a premier acoustics lab, introducing Soundbar speakers, independent subwoofers, surround-sound home theaters, and panoramic sound theaters—the first of their kind. This allows users to enjoy sound quality comparable to that of a theater.
From the first to the fourth generation, each iteration of Mi TV has made significant strides, placing it at the forefront of the TV industry. We pioneered an AI system that “better understands content and you.†Users no longer need to struggle to sift through vast amounts of TV content. We also developed the first AI voice TVs, enabling illiterate children and elderly individuals with trepidation to easily access smart TVs. This year’s flagship product, the Mi TV4, features a frameless glass design, a 4.9mm body that is 30% thinner than an iPhone, and starts at 3,499 yuan. It’s simply amazing.
With the proliferation of the Internet, users are becoming increasingly knowledgeable and savvy. We believe the era of high margins based on deception has passed, and the future belongs to companies like Xiaomi that persist in offering “high-quality, affordable products.†Xiaomi is a company from the future.
WARNING!
Do not plug two or more meters together!
IMPORTANT
Don't plug in an appliance where the load exceeds 16 Amp. Always ensure the plug of any appliance is fully inserted into the meter outlet. If cleaning of the meter is required, remove from mains power and wipe meter with a dry cloth.
KEYBOARD DEFINITION
1). SET: Set price with button UP.
2). MODE: Exchange display state.
3). UP: Set price combined with button SET.
GENERAL FEATURES
1).Display line power.
2).Display and memory accumulative total power quantity.
3).Display and memory total power charge of price.
THE DATA DISPLAY
Press MODE button the data displays as follows:
W →KWh →PRICE →COST/KWH
↑_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _↓
1). Plug in socket and power on, the meter will display real power.
2). Press MODE button once again and release, the meter will display accumulative KWh.
3). Press MODE button once again and release, the meter will display total power charge.
4). Press MODE button once again and release, the meter will display COST/KWH.
SETTING PRICE OF COST/KWH
1). Press SET button during display COST/KWH,the first digital COST/KWH flash, press UP button to set it.
2). Press SET button once again and release, the second digital COST/KWH flash, press UP button to set it.
3). Press SET button once again and release, the third COST/KWH flash, press UP button to set it.
4). Press SET button once again and release, the fourth COST/KWH flash, press UP button to set it.
5). Press SET button once again and release, the radix point COST/KWH flash, press UP button to set it.
DATA CLEAR
Press and hold MODE button for 5 seconds will clear KWH,PRICE and COST/KWH data.
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