Peter Fisk

When Lei Jun tells the story, he usually begins not with triumph but with embarrassment.

The young engineer from Hubei, who grew up devouring computer magazines and teaching himself to code late into the night, was never meant to become one of China’s most influential industrialists. He was, by his own admission, an unlikely entrepreneur: shy, cerebral, a voracious reader who claimed that the most important thing he ever learned was simply that “all great companies come from continual self-renewal.” It sounds like a line you’d find in a management book. For Lei, it became a creed.

Years before Xiaomi became famous—before the packed online flash sales, before the stadium product launches, before the headlines dismissing it as Apple’s most audacious imitator—Lei Jun had already failed once. His first major venture, Joyo.com, was a Chinese online bookstore sold to Amazon long before it could reach its potential. He spent the next decade in relative quiet, investing, advising, wandering the sidelines of China’s exploding tech scene. But something in him remained restless: a belief that China could build world-class consumer technology, and that simplicity, affordability, and beauty did not have to be mutually exclusive.

Xiaomi was born in 2010 in a small office in Beijing with an aspiration that sounded grandiose at the time: to build a technology company that combined Silicon Valley software culture with the craftsmanship of Japanese manufacturing and the speed of Chinese supply chains.

For a while, the mixture worked brilliantly. Xiaomi’s smartphones—sold online, launched in limited batches, hyped through social media rather than advertising—became a phenomenon. By 2014, the company briefly held the number-one spot in China, the world’s largest smartphone market. Lei Jun became a celebrity, the “Steve Jobs of China,” a comparison he detested but couldn’t quite escape.

Yet underneath the excitement lay fragility. Xiaomi’s model depended on the intoxicating speed of the internet era: fast launches, fast sales, fast growth. Competitors copied the software. Others improved the hardware. The online-only strategy that made Xiaomi an overnight force quickly turned into a constraint. By 2016, the company’s market share collapsed. It fell from first to fifth place in just two years. Analysts began calling it a “unicorpse,” a unicorn company presumed dead on arrival. No modern technology firm, especially in hardware, had ever recovered from a fall that steep.

It was during this period, in the small hours of a winter night in 2016, that Lei Jun had the meeting that changed everything. The model was cracking, he admitted. What had once been Xiaomi’s magic was now its weakness. Competitors had crowded the low end of the market; online sales alone could no longer support the ambitions of a company that wanted to make premium devices; the brand identity—clever, scrappy, internet-native—was starting to look dated. Yet the most dangerous problem was internal: Xiaomi had become too comfortable with what had worked before.

What followed was one of the most radical strategy resets in modern consumer technology. Lei Jun did something many founders can’t bring themselves to do. He dismantled the very formula that made him successful.

The online-only model was abandoned in favour of physical retail—thousands of stores across China and, increasingly, overseas. Instead of a narrow focus on smartphones, he expanded into a vast ecosystem of interconnected hardware: smart home devices, wearables, scooters, televisions, air purifiers, robot vacuums. Xiaomi incubated or partnered with more than 200 companies, creating a hardware constellation so broad and so fast-moving that almost no competitor outside China could replicate it. Each product deepened customer loyalty and strengthened the brand’s reach in everyday life.

Lei Jun also made a rare branding move: he split Xiaomi’s identity into two—Redmi, the high-volume, value-driven sub-brand; and Xiaomi, a more premium line positioning itself closer to Samsung or Apple. It was a psychological reset as much as a commercial one. Xiaomi was no longer just “cheap and cheerful”; it was sophisticated, ambitious, willing to compete at the top of the market.

And then came the most audacious decision of all.

While analysts were still questioning whether Xiaomi would survive its turnaround, Lei Jun announced that the company would build a car. Not license software. Not partner with an automaker. Build a full electric vehicle from the ground up, at a cost of billions, with a five-year timeline that many experts called impossible. China’s EV market was already crowded; Tesla held the global imagination; BYD was rising with unstoppable force. Xiaomi had never built a car, never built a factory of this scale, never employed automotive engineers—until it began hiring them by the hundreds.

Yet Lei Jun understood something that critics didn’t: Xiaomi was not entering the car market to sell cars. It was entering the most important computing platform of the next decade. The company framed the SU7—the first Xiaomi electric vehicle—not as hardware but as a node in a vast software and service ecosystem. The car became the ultimate expression of Xiaomi’s strategy: a flagship device that unified everything the company had built over 30 years, from smartphones to home appliances to cloud services.

On launch day in 2024, the SU7 generated 50,000 orders in 27 minutes. By the end of the first day, the entire production run for the year had sold out. Lines formed outside Xiaomi stores not just for the car but for the experience of seeing it. A technology company once written off as a fading smartphone brand had reinvented itself as a fully-fledged mobility and AI business.

The irony is that Xiaomi’s improbable rise wasn’t luck; it was readiness. As Lei Jun likes to say, “A lucky break only matters if you’ve already done the work.”

What makes the story fascinating is not simply the comeback but the mindset behind it. Lei Jun’s reinvention was not a pivot but a re-wiring: a willingness to question his own legacy, to shift from an internet mindset to a manufacturing mindset, from selling devices to building an ecosystem, from being a follower to embracing innovation on an industrial scale. The Xiaomi of 2010 could never have built a car. The Xiaomi of 2024 could not afford not to.

In the end, the SU7 is not the conclusion of the story but a prelude. As Xiaomi positions itself as a company where phones, homes, and now vehicles all speak the same design and data language, the boundaries between industries are dissolving. Lei Jun’s true achievement is not that he built a car. It’s that he built a company capable of transforming itself—twice—and may well do so again.

Reinvention, in Xiaomi’s case, is not an emergency manoeuvre. It is the operating system.