Rakuten Ichiba is one of the world’s largest online shopping mall. Founded in Tokyo in 1997, it has built a $5 billion global presence through the acquisitions of complementary busineses such as Buy.com in USA, Ikeda in Brazil, Tradoria in Germany and Play.com in the UK.  Whereas other marketplaces may compete directly with sellers, Rakuten empowers merchants to deliver “Omotenashi”, a Japanese attitude to customer service and hospitality, intended to help sellers create lasting relationships with buyers

“Omotenashi” is about creating a non-dominant relationship between a person who’s offering the service and a person who is receiving it. It could be the CEO of a big company, a famous star or an ordinary person, but there’s only one simple relationship between host and guest. An example of the best Omotenashi is when the host anticipates the needs of the guest in advance and offers a pleasant service that guests don’t expect. They should not wait for instructions from their guests, as guests who make their requests directly are considered unsophisticated in Japan.

Rakuten is not like Amazon, more like a mainstream, Japanese version of Etsy. It’s an online mall in the sense that it creates a platform where 30,000 independent retailers set up their virtual shops selling over 1 million different products. Like Amazon builds up rich data-driven profiles of consumers, to anticipate needs and match them with relevant retailers. It has central warehouses from where the retailers goods a centrally collated and then distributed to consumers. Like eBay it has an auction facility. This business model is sometimes referred to as a B2B2B2C model, just like a physical shopping, where retailers are charged a site lease fee, but also commissions on sales.

https://www.youtube.com/watch?v=HtMsrTqKbzs

Tatsuya Abe is Japan’s crab-meat king. His Yamato seafood company based in Shiogama offers the best-quality seafood, in particular the local favourite Alaskan and Russian taraba crab. However his wealthy consumers are niche and dispersed, making the investment in stores unrealistic. Instead he set up a virtual store on Rakuten Ichiba and was able to deliver his premium crab meat overnight. From initial monthly sales of  ¥130,000 ($1500) he has grown his business, with  relentless blogging, and online brand building, to ¥40 million ($45,0000) per month. Abe could not believe the growth, that now makes him one of the world’s largest crab importers. “Japanese people love crab. And Rakuten is a huge market.”

The company’s intent is “to create the number-one internet services company in the world” through continuous innovation, building on the 77 million consumers, who are attracted by online shopping and banking, to investments and travel, entertainment tickets and golf-course reservations.

CEO Hiroshi Mikitani sees two big challenges for Japanese to become a global business – “Englishnization” or adoption of English as the practical language of the world, and  “disgalapagosisation” by which he means an end to Japan’s sense national superiority, which he he believes in increasingly isolating many Japanese businesses.  At the same time, Mikitani has made it his mission to give economic hope to small traders across Japan. “There are so many merchants who could have gone bankrupt without Rakuten Ichiba,” he says. “The kimono industry, for example, wouldn’t now exist without Rakuten.”

Le Pain was founded in Brussels in 1990 by Alain Coumont, and is now famed around the world for its organic breads, coffee bowls and long wooden communal tables.  As a young chef, Coumont was unhappy with the quality of local bread, so he began making his own sourdough loaves. He furnished his cafes with pieces from antique stores and flea markets. The bakery became a restaurant, most famous for its tartines (traditional, open-faced sandwiches).

“Whenever we can, we source organic ingredients. This way, we not only do what is good for the Earth, but we also ensure our ingredients are of the highest quality. It’s about finding the very best, in a way that is good for all of us” says the Belgian entrepreneur.

https://www.youtube.com/watch?v=1hjZQxf5Xp4

This philosophy influences every part of the way Le Pain works, “from the food we serve to the design of our stores to the materials we use” has says. “We use reclaimed wood and recycled gypsum in construction, energy-efficient lamps, and environmentally friendly cleaning supplies and packaging”.

Of course, the rustic look could easily be see as just another cosmetic branding device “To us, organic is not a marketing gag as it is for other businesses who only offer environment-friendly coffee and basically greenwash the rest. Our ingredients are expensive, and we invest a lot of time and effort in locating the right suppliers. Organic is a tough business.”

The “communal table” is the centre piece of each bakery-café-restaurant (it’s difficult to say which it really is). “Without this table we would not be where we are today,” says Coumont. Believing that food is only as good as the people who sare it, he adds “a big table is like a good movie; the setting is not the only criteria – the actors are also important.”

Whilst Starbucks has modernised and multiplied the Italian coffee experience, and McDonalds has tried to bring some humanity and goodness to its plastic formats, Le Pain is the real thing. Authenticity, a sense of goodness, a natural and human experience, pervade each of the 200 locations in 20 countries. Each serving big Belgian bowls of hot coffee without any handles.

https://www.youtube.com/watch?v=HBjjCH0e8UA

 

Amancio Ortega likes to say “fashion is like selling fish”. Fresh fish, like a freshly cut jacket in the latest colour sells quickly at a high price. An old catch has to be discounted or thrown away. “Selling fish” has made Inditex one of the world’s largest clothing retailers. From the first Zara store in the Spanish fishing port of La Coruña, opened in 1975, Ortego has added almost a hundred companies designing, making, and distributing the latest fashions. It has made him the richest man in Spain, and third in the world. With 6200 stores worldwide, and brands ranging from Bershka to Pull and Bear, Mango and Zara.

https://www.youtube.com/watch?v=y6RcEsnGf8E

Zara achieves speed and efficiency through an integrated system of design, production, logistics and distribution which also keeps stock minimal, and store range evolves almost weekly. Employees also convey a continuous flow of shopper information, what they try and buy, and why they don’t. The 200 person creative team each have direct links to a store around the world to ensure insights are captured directly and quickly, and the brand anticipates and responds to the latest trend.

Whilst competitors make clothes in distant low-cost markets, Inditex values the speed and proximity of Spain, Portugal and Morocco. New designs arrive every three days in stores, often in the same week as similar designs appear in magazines or fashion shows. They sell out quickly, usually at full price, and consumers come back weekly to see what’s new.

However Inditex’s centralised structure, now controlled from The Cube head office in Arteixo, a small fishing town in northwest Spain, is both a strength in Europe and weakness in other parts of the world. Whilst a $324m Fifth Avenue flagship store has been successful in New York, Zara with its tight slim-fit has struggled in other parts of USA. China is now the second largest market with over 150 stores. Fast, yet standardised fashions, work less well around the world.

Etsy has brought the world of local artisans and handmade crafts, vintage collectors and bored websurfers to the wider online world. Everything you might find in a local market, independent stores or Turkish Bazaar, is now accessible on Etsy.  Handmade jewellery is the top seller, followed by wedding goods and oil paintings were not far behind. Whilst most goods initially came from North America (in particular from Oregon and Utah, sold to consumers in Alaska and Massachucetts), Chinese and Indian goods are rising fastest.

Etsy is the marketplace we make together. 

Our mission is to reimagine commerce in ways that build a more fulfilling and lasting world.

We are a mindful, transparent, and humane business.

We plan and build for the long term.

We value craftsmanship in all we make.

We believe fun should be part of everything we do.

We keep it real, always.

Etsy was founded in 2005 by Rob Kalin – a keen painter, carpenter, and photographer – finding no viable marketplace to exhibit and sell his creations online, and other sites like eBay fill of overstocked electronics and fake goods.  The business charges $0.20 per listing and takes a 3.5% cut of the sales price. In 2012 membership doubled to 22 million, with 14 million people making 1000 million purchase, resulting in revenues of close to $1 billion for the online marketplace.

https://www.youtube.com/watch?v=CA0g-LcKeSE

Etsy Labs are an educational and physical showcase for small artist communities in Brooklyn and Berlin. They include free events and workshops that focus on teaching people how to make things. From screenprinting and knitting, to photography and bike repair. In an online world, they help to build creative communities physically too, and also have pop-up labs in major cities.

The business model is built around a community of participants, brought together by a love of great products rather than cheap prices. Blogs and forums, apps for every platform, links to Facebook and Twitter, keep the market active 24×7. Reputations are crucial to bother sellers and buyers, with both able to rate and review the other. The Etsy brand defines a marketplace, a community that is local and global, a movement of people with shared values, and as Kalin himself says, “about we more than me”

https://www.youtube.com/watch?v=rYfA0xr1aRI

Members love Esty so much that they themselves created a niche social media site to support their community. etsylove.ning.com has over 11.400 members who love the brand, and being connected to each, driving more purchases, more livelihoods and more art.

Case Study: Breaking the mould. How Etsy and online craft marketplaces are changing the nature of business

Lewis Road Creamery has become a sensation. Perhaps its best to let them describe their story in their own words:

“Madness, we thought. That here in New Zealand, a country which doubles as any self-respecting dairy cow’s dream home with its endless rolling green hills, we were importing butters all the way from…Europe! Absolute madness. Surely the country making the world’s best dairy produce, had to be the one given the greatest head-start by mother nature.

So we quietly set about restoring natural order to the world, bought ourselves an Italian butter churn and set it up in a converted shipping container. And from that shipping container, in Lewis Road, in the Bay of Plenty, we began our quest to make the world’s very best dairy. Madness, they said. Absolute madness.

It’s a funny old world isn’t it? Sometimes progress isn’t progress at all. Instead of making things better, it makes them an imitation of what they once were.
 At Lewis Road we’ve found some of our greatest innovations have been by going back, way back, to how things were done before compromise crept in.

We don’t ask how to make something cheaper, or how to produce as much of it as possible, we only ask ourselves this: How can we make it as it should be?

That one simple question is the driving force behind every single thing we do, from the people we hire to the packaging we use. Because real progress for us, is what it should be for everyone; making things better.

As you’re no doubt aware, we love new ideas as well. In fact, from the very beginning we’ve created an environment fuelled by exploring what’s possible; and quite frankly ignoring the rules set down by others of what can and cannot be achieved.

Our head office isn’t built around a boardroom table or a reception desk. Its main feature is its kitchen. There you’ll find there’s always some new idea simmering away on the stove, or being whisked together on the bench. And if it’s good enough, one day that same idea will make it onto your kitchen bench as well. If you’d like to be part of the Lewis Road kitchen, you can. From time to time we share new products and initiatives with our VIP friends for their honest feedback (don’t worry, we can take it) to make sure they meet your high standards, as well as ours.

How acquainted with dairy cows are you? We’ve come to know quite a few of them recently and we find them the most inspiring of creatures. Theirs is a simple existence based on the consumption of fresh produce, a love of the outdoors, and a passion for dairy at its simplest. No wonder we find them so inspiring. That’s why, whatever we do, we’ll never roam far from the farm. Just like the experts themselves.”

In 2012, former Aussie-rules footballer Craig Ellis and fiancee Erin Deering left the comfort of their home in Melbourne and bought a one-way ticket to Hong Kong. Their plan: to launch a swimwear line.

Money was so tight, they ate canned food and packed orders from their tiny apartment. “We would run to the post office with three big tubs of bikinis and hold up the line for two hours processing the packages one by one,” says Ellis. “They wouldn’t let us have a bulk ­account because we lived on the fourth floor and the postman wasn’t going to come up and collect everything.” ­Momentum picked up, and by April 2013 they were shipping more than 100 orders a day. Just two years later, BRW Rich List anointed Deering the second wealthiest woman in Australia under 40 with wealth of $36 million.

In a market where up to 90 per cent of start-ups fail, and even compared with the 10 per cent that don’t, Triangl’s success isn’t just pat-on-the-back; it’s stratospheric.

The brand was born from a gap in the market. “There were the big swimwear labels like Seafolly, but nothing much in the $100 ­category aside from surf brands,” says Ellis. They ­initially started wholesaling but in 2013 moved ­entirely online, selling only through their website, triangl.com. Ellis credits this move as the key to their success. “Erin was spending all this time chasing wholesale payments, but we also needed to sell  the next range while they owed us a bunch of money. It was an awkward relationship and a flawed business model. With e-commerce you get paid instantly, so we’ve had a ­really profitable business since day one.”

Launching Triangl was a big risk and Ellis didn’t have the best track record. He went bankrupt in 2009 after St Lenny, the T-shirt brand he founded with fellow AFL player Nathan Brown, folded. Ellis rode a pushbike to work and earned minimum pay, all the while keen to sink his teeth into another ­design business. Hong Kong appealed because of its proximity to the powerhouse Chinese factories, which somewhat avoided the delays and difficulties Australian designers faced when manufacturing locally.

“Instead of going straight to market with a perfect product, like so many brands do, we tested the waters with small batches. It ­enabled us to gauge the response of customers, and because we weren’t doing large runs we were open to experimenting,” Ellis says of the independently owned company. They tried two fabrications — neoprene and nylon-spandex. Contrary to their expectations, the former won out. “We weren’t going to argue with the customer, so that’s what we went with.”

The bikinis, in shades dubbed Cola Pop, Blue Crush, Candy Sunset, Pink Lemonade and so on, retail for less than $100 and have resonated with 20-something millennials who don’t blink an eye buying swimwear online. Traditionally used in wetsuits, the flexible scuba material neoprene is trending across the apparel industry, with luxury brands Kenzo, Alexander Wang and Balenciaga applying it to dresses, jumpers and bags.

The couple’s original goal was to sell one bikini a day, equivalent to $30,000 annually, to cover costs. Yet by the end of their first year in business, Triangl had turned over $5m.

The following year, sales reached $25m; last year’s figure was $45m. “It’s grown way beyond anything we ever imagined,” says Ellis. He and Deering have a supply-chain office in Hong Kong with a staff of 10, and a parent company based in the Channel ­Islands where “all the ­decision-making happens”. Ellis plans to open a design office in New York.

After an initial six paid blogger posts, they had no marketing budget, so the couple turned to Instagram.

Triangl hasn’t spent a cent on advertising, ­relying wholly on the photo-sharing platform — think suntanned ­models frolicking on tropical beaches — where it has 2.8 million followers. “Having no money was a blessing in disguise,” says Ellis. While they do give swimwear to celebrities and others who influence trends, there’s “nothing transactional”, he says. “This way, there’s a sense of authenticity that’s way more powerful than a billboard.”

Beyonce and Miley Cyrus are fans, but it was young reality star and Kim Kardashian’s half-sister Kendall Jenner whose Twitter posts prompted a sales surge in the US. It’s the strongest market at the moment, but Triangl ships everywhere and has processed orders from Kazakhstan and Mongolia.

Ellis favours Instagram because it is quantifiable — posts drive traffic. “It goes to show the power and reach of social media.”

While Triangl’s colour-blocked, back-trimmed styles are hardly breaking new fashion ground, they are distinctive and, unfortunately, easy to copy. In the middle of last year, Triangl devotees leapt to its defence when lingerie behemoth Victoria’s Secret released a series of lookalikes. “Victoria’s Secret knock off Triangl ­bikinis needs to stop,” one loyal fan tweeted. But Triangl took no action.

It’s also happening on home soil. “In one sense it’s flattering but it’s disappointing that Australian brands are the ones taking inspiration. But we are now in a position to allocate budget towards the protection of the brand,” says Ellis.

While fashion copyright is notoriously hard to prove, Australian swimwear label Baku and retailers Bras N Things and Target have ranges heavily inspired by Triangl’s popular balconette Milly and Poppy designs. Last year The Fashion Law blog asked: “Triangl: The World’s Most Copied ­Bikinis?”

The forecast is sunny. Expansion is inevitable but there’s no urgency. “We want to keep our offering really tight and maintain focus on our niche for now,” Ellis says. “We don’t want to offer too much up-front and dilute what the brand represents. The product needs to be the best it can be before we broaden into other ­products.”

Away from the business, Ellis and Deering have just moved to Monaco with their baby, who at seven months has been on 28 international flights — first class, of course. “It’s not a bad life,” says Ellis, and his wife’s Instagram account bears this out, chronicling a whirlwind of luxury shopping, designer shoes and five-star island resorts.

The lifestyle appears enviable, but there’s no such thing as work-life balance for these entrepreneurs.

“From the moment we wake up to the moment we go to sleep at night the conversation is all about Triangl,” Ellis says. “Someone else might find it ­boring, but we love it.”

The Lumio was designed by Max Gunawan, a Jakarta-born designer now living in San Francisco, with a penchant for multi-faceted, multi-functional products.

Gunawan tells his story: “I’ve always been fascinated with objects or architecture that can be transformed into multiple shapes and serve multiple functions. I was inspired by this project called the rolling bridge in London by Thomas Heatherwick (designer of the London Olympic cauldron). There’s something so unexpected to see – what appears to be – an urban sculpture unfold into a bridge. At its core, Lumio represents this very same idea but on a much smaller scale: a beautiful object that unexpectedly transforms into a functional device

I was developing a concept for a modular folding home that you can fit into a compact car. Unfortunately, I didn’t have the capital that I need to develop a working prototype for the folding house. Having read “The Lean Startup,” I pivoted the idea into a smaller scale object that people can enjoy.

I had these folding paper models that I used to carry around in my Moleskine sketchbook. It dawned on me one day that a book would be a great way to package this idea of a collapsible light fixture: it’s compact, has that visceral connection with the idea of a “book that illuminates” and has that unexpected element of surprise”.

At Techshop in San Francisco, Gunawan is showing off his design. At first glance the lamp looks like a simple hard-bound book or journal, but once you open it, the book unfolds several pages of non-tearable paper that are illuminated by an LED light source. When the book is fully open, the LED light shines so bright that it is able to provide a perfect alternative to a traditional lamp. Even better, the hard wood cover is also a magnet, which means that you can attach the lamp to any metal surface. A re-chargeable lithium ion battery keeps the lamp illuminated for up to eight hours between charges.

To kick off production of the Lumio, Max launched a crowdfunding campaign  and the response was  incredible. Max’s initial goal of $60,000 was met within the first 24 hours, and in less than a week, the campaign topped over $200k. The Lumio sells for around $250 and you can choose between three wood finishes: Blonde Maple, Warm Cherry and Dark Walnut. Inside your home, hanging from a tree in your garden, or carried with you, Lumio is a story that reflects our times.

Max’s Kickstarter video, introducing Lumio:

Here are 5 lessons from the development of Lumio which Max Gunawan recently shared in Forbes magazine:

1. Slow and Steady Wins the Race

“I see a lot of my colleagues in business ramp up too quickly. They raise money, sign a lease, hire a bunch of people. But then they’ll say, ‘Oh, shoot. We didn’t have the right distribution. We’re overextended on payroll. We’re impossibly behind on delivering product.’ My mentality was to be conservative, perhaps too conservative. I did a lot of the grunt work, even the installation, myself. I made sure we weren’t taking on too much or hiring too many people. I kept focus where it needed to be, which, recently, was on the new product– a smaller version of Lumio (3 x 5.5 inches) that launches exclusively at MoMA on November 5. Once we’re there, I can think more broadly about next year.”

“When you ramp up at a pace that makes sense, you’re ready when life throws curves. Two weeks prior to Shark Tank, I learned that our factory in China burned down. But we quickly got back on track and by June, we were wrapping production on inventory for the holidays. On Shark Tank, my optimistic valuation was $2.5 million but we made $3 million last year, and hit $3 million again by June of this year. Those are strong numbers but it’s still slow growth compared to a lot of other IOT companies. I’m okay with that pace.”

2. Keep it Classy

“It’s hard for a small business to expand but I didn’t want to go with a gigantic distributor. I wanted partnerships that reflected the quality of the product. Nieman Marcus, Cooper Hewitt Museum in Manhattan and Centre Pompidou in Paris, smaller design stores like A+R in L.A. I love simple, clean design. and the Japanese aesthetic and certainly did not want to make compromises as we grew the company. Certain brands maintain integrity in their aesthetic. I like Monocle. They make people, including myself, aspire the Monocle way of living, from publishing, retail and creative…they do it right.

Dyson has such aesthetically beautiful and highly functional products. Muji is simple, affordable, good design for the masses. Those are some of my models.”

3. Always Be Inventive

“I guess you can say I had a super-early midlife crisis when I turned 30. I was really bored with my architecture career. I said to myself, I can complain about it or I can do something. So I started toying with designs. I began with designs for a modular folding house structure that you could fit into a compact car. The ideas was to make something portable and collapsible that could transform into something else. Ultimately, that plan required too much capital so I pivoted into something smaller. I built my first prototype for Lumio three years ago.”

4. Think, “What Would I Buy?”

“I follow trends religiously. Fashion, architecture, art, design, retail. I try to absorb it all as a way to keep track of what people are interested in, what colors are popular, what people are wearing. But when it comes to my own products I think about what I would want to own. We’re working on a product now that in some ways is a folding chair but it’s more than that. When you fold a chair, you put it away. But I wanted an object that you could also mount on your wall, that could absorb sound, and with pops of color. It would be less a chair and more like a Damian Hurst painting. So that’s what I did. I created a modular piece–all round edges, no straight lines or angles–that with one lift of finger, turns into a sculptural chair or table.”

5. Just Do You

“For Shark Tank (a USA-television competition for entrepreneurs), I flew in from our launch at the Pompidou the day before and hadn’t been preparing that much. They give you guidelines and send you off for a day of to practice and also give you a day of downtime. What happened was, after orientation they told me my appearance was being bumped up, so I had no downtime. I was still jetlagged but it didn’t matter. I know the product so well and I just got straight to the point. I made it simple. I didn’t embellish. Trust me, the Sharks have seen it all. Stick to your personality. If you’re funny, be funny. I’m not funny so I just went out there as me. It’s like anything. To be successful, work your strengths. Don’t be anyone else.”

The world’s top-performing CEO, according to Harvard Business Review, is Lars Rebien  Sørensen. Not a familiar name in the business media, and he doesn’t immediately strike you as a top business leader when you meet him. The CEO of the Danish pharmaceutical giant is friendly, laid back and quiet. Certainly not your big business stereotype.

When exploring how this mild-mannered, bespectacled executive landed the top spot, HBR reflected “It’s partly due to his company’s fortuitous decision years ago to focus almost exclusively on diabetes treatment. The runaway global growth of the disease has driven up the company’s sales and stock price.”

But his standing also reflects Novo Nordisk’s deep engagement with social and environmental issues, which now factor in to our calculations. “Corporate social responsibility is nothing but maximizing the value of your company over a long period,” says Sørensen, who has been with the company for 33 years. “In the long term, social and environmental issues become financial issues.”

https://www.youtube.com/watch?v=V-HTulOycrw

Behind Novo Nordisk lies a story about two Danish firms – Nordisk Insulinlaboratorium and Novo Terapeutisk Laboratorium. Nordisk Insulinlaboratorium was founded by Hans Christian Hagedorn, August Krogh and August Kongsted in 1923 in Copenhagen.

In 1922, August Krogh and his wife Marie Krogh travelled to the US. The couple had heard reports of people with diabetes being treated with insulin – a hormone discovered in 1921 by two Canadians, Frederick Banting and Charles Best. Marie Krogh was a doctor herself and also had type 2 diabetes. The couple returned to Denmark with permission to manufacture and sell insulin in Scandinavia. With the economic help from August Kongsted – the owner of Leo Pharmaceutical Products – Insulin Leo was marketed in 1923.

When Krogh and Hagedorn started manufacturing insulin, they hired Thorvald Pedersen and his brother Harald Pedersen to build the machines for insulin production. However, Thorvald Pedersen was fired from Nordisk and the two brothers decided to try to manufacture insulin themselves. Thorvald and Harald Pedersen managed to produce a stable liquid insulin and marketed Insulin Novo in 1925.. The brothers named their firm Novo Terapeutisk Laboratorium. Over the next decades the products were further improved, e.g. with focus on longer effect; nevertheless, there were still challenges to be met, and in the 1970s the new goal was to produce human insulin meaning that Novo would no longer depend on animal pancreases. In 1982, Novo succeeded and launched the world’s first insulin preparation identical to human insulin.

Nordisk marketed a genetically engineered human growth hormone in 1988 and Novo Nordisk is market leading in the world today in this area and introduced the world’s first liquid growth hormone in a pen system in 1999.

In 1989, Novo Industri A/S (Novo Terapeutisk Laboratorium) and Nordisk Gentofte A/S (Nordisk Insulinlaboratorium) merged to become Novo Nordisk A/S, the world’s largest producer of insulin with headquarters in Bagsværd, Copenhagen. In 2000 the company demerged into NovoZymes A/S and Novo Nordisk A/S. Research into bleeding disorders lead to the foundation of The Novo Nordisk Haemophilia Foundation in 2005 striving to improve access to care for people with haemophilia and allied bleeding disorders. In 2015, the company announced it would collaborate with Ablynx, using its nanobody technology to develop at least one new drug candidate

Today, Novo Nordisk is headquartered in Bagsvaerd, Denmark, with production facilities in eight countries, and affiliates or offices in 75 countries. It employs more than 40,000 people globally, and markets its products in 180 countries. Key products include diabetes care medications and devices. It is also involved with homeostasis management, growth hormone therapy and hormone replacement therapy.

The Novo Nordisk logo is the Apis bull, one of the sacred animals of ancient Egypt.

Xiaomi’s story reads like a speedrun of modern tech strategy. In 2010 it launched as a budget-friendly smartphone upstart in China, wooing fans with community-driven software and relentlessly good value.

In the mid-2010s, Western commentators dismissed it as an “Apple copycat,” noting the familiar aluminum edges, minimalist packaging, and theatrical launch events.

Yet a decade on, Xiaomi is the world’s #3 smartphone vendor by shipments, a mass-market brand across emerging economies, the steward of one of the largest consumer IoT platforms on earth, and—most audaciously—China’s newest volume EV maker.

In short: this is no longer a story about copying Apple’s design language; it’s about building a very different playbook for scale, affordability, and ecosystem lock-in.

Smartphones as the wedge, fans as the flywheel

Xiaomi’s early wedge was brutally simple: sell great hardware near cost, monetize longevity through accessories, internet services, and repeat purchases, and keep users close via MIUI’s engaged fan community. That approach scaled. In 2024 Xiaomi shipped roughly 169 million smartphones and held the #3 global position, with momentum in China and emerging markets underpinning growth. By Q1 2025 it retained the #3 rank with ~14% share on 41.8 million units, underscoring resilience amid a slow industry recovery.

India shows Xiaomi’s sweet spot: value-conscious, fast-digitizing economies where retail moves through both online flash sales and sprawling offline networks. In the year to July 2025, Xiaomi hovered around the top tier of vendors in India, typically trading the lead with vivo and Samsung (roughly 17–19% monthly share in recent readings), reflecting a fiercely competitive but durable presence. This pattern repeats across Southeast Asia, parts of the Middle East, and Latin America: Xiaomi wins by compressing premium features into mid-tier price points, distributing through savvy online promotions, and seeding its brand through local influencers and service centres.

Beyond phones: the world’s biggest consumer IoT portfolio

What really distinguishes Xiaomi is the breadth of its device universe. The company cultivated an “ecosystem companies” model—minority investments and co-branding across hundreds of categories from smart TVs and air purifiers to scooters, robot vacuums, security cameras, wearables, and kitchen appliances—stitched together by the Mi Home app and, more recently, HyperOS.

By December 2024, Xiaomi reported 904.6 million connected IoT devices on its AIoT platform (excluding phones, tablets, and laptops), up 22% year-over-year—scale that very few consumer brands can match.

Strategically, that “good-enough everywhere” hardware portfolio feeds two flywheels. First, it raises switching costs: buy a Xiaomi phone, then a TV, then a smart plug and a robot vacuum, and the convenience of one app, shared accounts, and inter-device automations makes you more likely to stay.

Second, it monetizes softly: internet services (ads, cloud, content, app store fees) consistently deliver high margins relative to hardware, helping normalize blended profitability across cycles. (Xiaomi’s disclosures routinely highlight Internet Services as the margin engine.) i

New strategy: “Human × Car × Home”

In 2024 Xiaomi formalized a strategic frame—“Human × Car × Home”—to integrate personal devices (human), smart home (home), and electric vehicles (car) into one software fabric. Think Apple’s “continuity” and “home” concepts, stretched across a far broader price spectrum and into autos—plus a sprawling catalog of third-party hardware. Lei Jun flagged this direction publicly in 2024 and 2025, linking it to HyperOS as the connective tissue.

This is where Xiaomi diverges sharply from the “Apple copycat” label. Apple has stayed premium and focused; Xiaomi is betting on ubiquity and adjacency. Rather than chasing the richest 20% of consumers, Xiaomi aims to be “the default” for the next three billion—those who want modern conveniences at attainable prices. That worldview led it into air conditioners and washing machines—and then into EVs.

Enter the SU7: a first car at consumer-electronics speed

Xiaomi announced its EV ambitions in 2021, secured government approvals in 2023, and began pilot production the same year. In late March 2024, it launched its first car, the SU7, with a starting price around RMB 215,900 (≈US$30k), deliberately undercutting the Tesla Model 3 in China. Deliveries ramped aggressively, with widespread reports of multi-month waitlists.

The car wasn’t just attractively priced; it was on-brand: handsome, tech-forward, tightly integrated with HyperOS, and positioned as part of your digital life—phone, home, and now car in one data-connected loop.

As 2025 unfolded, Xiaomi’s auto effort gathered pace. Media and sell-side coverage highlighted strong quarterly revenue contributions from EVs, improving margins, and plans to bring Xiaomi cars to Europe by 2027—an ambitious, regulatory-intensive expansion that signals confidence beyond a debut-product sugar high.

To build credibility with enthusiasts, Xiaomi also leaned into performance theater. The SU7 Ultra variant set a string of circuit lap times in China and a headline Nürburgring lap for production EVs in 2025—attention-grabbing proof points that Xiaomi intends to rival the best on engineering, not just price. (As always with lap records, specs and conditions matter; still, the marketing impact is real).

Innovation, the Xiaomi way: fast followers, frugal inventors, full-stack integrators

Three traits define Xiaomi’s innovation posture:

• Fast follower with ruthless cycle time. Xiaomi internalizes and scales good ideas quickly—camera stacks, charging breakthroughs, folding displays, AI assistants—often hitting “80–90% of flagship” features at 50–70% of the price, then pushing updates at a cadence more reminiscent of internet companies than legacy hardware firms. Its device breadth means ideas travel horizontally (from phones to TVs to wearables) and vertically (from premium down to entry tiers).
• Frugal invention and modular manufacturing. Xiaomi rarely chases bespoke hardware at all costs; it optimizes around bill of materials, supply chain leverage, and modular reuse. That mindset translates well into autos: rather than reinventing every component, Xiaomi focused on integration (software, UI, data, OTA updates) and selectively on differentiators (e.g., casting and automation techniques, software-defined features)—a playbook business media explicitly compared to Tesla’s production pragmatism.
• Full-stack ecosystem integration. The real moat is not a single killer device but the seam between them: accounts, identity, payments, cloud, voice assistants, automations, and a common OS. “Human × Car × Home” is the consumer expression of that stack. At scale—900M+ IoT connections—tiny conveniences compound into habit, and habit becomes retention.

Brand building, the Xiaomi Way: from “value” to “attainable premium”

Xiaomi’s brand journey mirrors Samsung’s arc more than Apple’s. Apple guards scarcity and charges for it; Xiaomi grows ubiquity and polishes it.

The brand started with “honest value” (the original “Mi fans” pitch), then climbed toward “attainable premium”—clean industrial design, thinned bezels, Leica-branded cameras on flagships, clean retail, and cinematic launch shows.

In India, Indonesia, and parts of Europe, Xiaomi retail formats and service policies increasingly resemble classical CE premium brands, even as online flash deals remain part of the growth engine.

Auto accelerates that transition: a well-reviewed EV legitimizes Xiaomi in higher-ticket categories and lifts halo effects across TVs and appliances. Xiaomi’s marketing is personal and social-native—Lei Jun’s keynote monologues, long X/Weibo threads, behind-the-scenes factory posts (he’s even leaned into the “sleeping on the factory floor” meme à la Elon), and a fan culture that blurs PR and product feedback.

Risks and constraints: geopolitics, margins, and the cost of ambition

The same features that power Xiaomi’s ascent create constraints:

• Thin hardware margins by design. Xiaomi’s willingness to price aggressively keeps volumes high but leaves less room for shocks. Internet Services help, but scale in EVs must eventually carry its own weight (the company has reported rapid revenue growth and improving margins in EV/AI initiatives, but profitability will be tested by price wars and ramp costs).

• Regulatory and channel volatility. India, a cornerstone market, is dynamic: shifting market-share leadership and occasional regulatory scrutiny of e-commerce and vendor practices can create noise and operational friction.

• Globalization of EVs is hard. Announced intent to enter Europe by 2027 signals ambition, but homologation, safety standards, brand perception, charging partnerships, and political headwinds (tariffs, investigations) make this a multi-front campaign, not a linear rollout.

• Brand stretch. Moving from “great value phones” to “trust us with your car” is non-trivial. Early buzz and performance stunts help, but after-sales service, residual values, and long-term reliability will determine whether Xiaomi is seen as an auto brand rather than a gadget maker that happens to sell cars. (Some of those Nürburgring-style signals are aimed precisely at reframing that perception.)

Relentless growth, never stop innovating

It’s Human x Car x Home strategy has few boundaries, so what could Xiaomi do next?

• HyperOS as the real moat. If Xiaomi can make its devices and cars feel uniquely coherent—calls handed off among phone, car, and TV; cameras and sensors that auto-configure; payments and IDs that just work—the switching costs become formidable. That’s the Apple lesson adapted to mass market reality.

• EV ramp economics. Quarterly disclosures in 2025 point to surging EV revenue and improving margins. The critical question is when the auto unit reaches sustainable profitability at scale amid China’s price wars—and whether a Europe launch lands on time.

• Emerging-market defensibility. Competitors are copying Xiaomi’s playbook—aggressive specs, online flash sales, ecosystem bundles. Xiaomi’s answer must be deeper services integration and better local partnerships in financing, retail, and service.

Comparing playbooks: Apple, Samsung, BYD, Tesla

• Apple vs. Xiaomi: premium minimalism vs. democratic ubiquity. Apple builds an ultra-tight, premium-priced ecosystem with industry-leading margins; Xiaomi builds a wide, price-accessible universe with blended margins. Apple’s services are a giant profit pool; Xiaomi’s Internet Services are smaller in absolute terms but strategically vital for margin, subsidizing aggressive hardware price points. Apple avoids the car market (for now); Xiaomi is betting its next decade on it. Where Apple aims for perfection and scarcity, Xiaomi aims for “good enough everywhere” and scale—especially in emerging markets.
• Samsung vs. Xiaomi: vertical heft vs. platform leverage. Samsung’s strength is vertical integration (memory, displays, fabs) and a balanced global premium-to-value portfolio; Xiaomi, with less component verticalization, leverages supply partners, speed, and an “ecosystem companies” network to spread into more categories faster. In emerging markets, both fight on distribution and financing; Xiaomi’s online muscle and ecosystem bundling often let it punch above its brand’s historical weight.
• BYD vs. Xiaomi: manufacturing juggernaut vs. software integrator with a fanbase. BYD is the world’s EV cost leader with deep battery and component integration; Xiaomi leans into software, interface, and cross-device continuity as its edge. BYD sells cars; Xiaomi sells cars that talk to your phone and home out of the box. If BYD is cost-discipline embodied, Xiaomi is experience-integration on a budget.
• Tesla vs. Xiaomi: singular premium tech brand vs. value-led ecosystem brand. Tesla marries software and manufacturing innovation with a premium, performance-first aura; Xiaomi borrows elements of that stance (gigacasting, OTA, performance theatrics) but grounds them in mainstream pricing and a broader consumer device identity. Tesla’s supercharger network and energy products are a distinctive ecosystem; Xiaomi’s counterpart is its phone-home-AIoT stack and retail footprint. In branding terms, Tesla is aspiration; Xiaomi is accessibility.

The Lei Jun effect: storyteller, systems thinker, stubborn finisher

Founder-CEOs shape companies in their own image.

Lei Jun, born in 1968, got his start in tech shortly after college when he joined Kingsoft, a Chinese software company that has similarities toMicrosoft. Kingsoft made productivity software that was very similar to Microsoft Office. Xiaomi might be similar to Apple, while Kingsoft was the “Microsoft of China” in the 90s and early 2000s.

Jun eventually worked his way up to become CEO of Kingsoft and took the company public in 2007, but resigned a few months after that, Businessweek’s story said. He was a VC for a few years, but then decided to start Xiaomi in 2010 with an ex-Google China executive. By then, he was already very rich.

During product announcements, Jun wears black shirts, light blue jeans, and sneakers, just like Jobs did. Xiaomi customers worship him. Company events feel more like rock concerts with screaming fans than product launches. Back in 2014, when Jun introduced Xiaomi’s flagship phone, the Mi4, he included a “One more thing…” kicker at the end of the presentation, a tactic Jobs was famous for when he had a surprise announcement.

 Jun’s imprint shows up in three ways:

• Narrative discipline and fan intimacy. Xiaomi’s community DNA—MIUI forums, fan festivals, marathon keynotes—maps to Lei’s comfort as a public explainer. His annual speeches and social media serve as both product theater and expectation setting (and sometimes crisis control). The “Human × Car × Home” mantra is classic Lei: crisp, meme-able, directional, and repeatable.
• Bias for speed and ship. Xiaomi launches, learns, iterates. That shipped-software cadence ported to EVs faster than skeptics expected, and Lei personally embodied the urgency—touring factories, posting late-night updates, even staging the work-on-the-factory-floor signal when symbolism mattered.
• Ecosystem obsession. Lei appears less interested in any single hero device than in the coherence of the system. HyperOS is the bet: one account, one UI language, one data backbone across wrist, pocket, couch, kitchen, and car. The strategic prize is lifetime value: the family that standardizes on Xiaomi becomes progressively less price-sensitive and more convenience-sensitive.

Xiaomi: the operating system for life

Xiaomi’s journey is no longer a tale of mimicry; it’s a case study in mass-market systems thinking.

Phones gave it scale; IoT gave it stickiness; EVs give it a shot at category transcendence. Apple masters scarcity, Tesla masters premium performance, Samsung masters vertical heft, BYD masters manufacturing cost—but Xiaomi is attempting something else: to be the operating system for everyday life, from your wrist to your car to your living room, priced for the next three billion consumers.

If Lei Jun can keep the ecosystem coherent and the EV unit financially disciplined, Xiaomi’s second act could be one of this decade’s defining reinventions.

 

The Brooklyn Superhero Supply Co. is a real place!

The slightly crazy, unusual and inspiring retail brand is the storefront of 826NYC, a nonprofit dedicated to supporting students aged 6-18 with their creative and expository writing skills, and to helping teachers inspire their students to write. Their services are structured around a belief that great leaps in learning can happen with one-on-one attention and that strong writing skills are fundamental to future success. The team of dedicated tutors, storytellers, and workshop leaders helps 2,300 New York students a year.  All profits go to supporting our programs.

If you’re in New York City you can find the superheroes at 372 Fifth Avenue (btw. 5th and 6th Street) in Park Slope, Brooklyn from 11 a.m. to 5 p.m. 7 days a week. We’re conveniently located near the 4th Avenue-9th Street Station of the F, R, and G trains. Try out the Cape Tester, get DeVillainized … The stores are staffed by volunteers and sometimes their schedules are as volatile as a can of Anti-Matter.

Here’s a great article about the Brooklyn Superhero Supply Co from Business Insider:

The Brooklyn Superhero Supply Co. promises all aspiring heroes passing its storefront that it can help with a “nemesis problem” with its “full capery” and “special programs for telepaths.” A small chalkboard advertises products like a grappling hook or X-Ray vision powder.

Some people don’t know what to make of it. When we visited recently, a young couple walked in and smiled at the displayed superhero gear. After eyeing an air cannon, picking up a villain net, and taking photos with the Rilling Brand Mind Reader, they asked the employee tending the store what many visitors wonder: “What is all this?”

Besides being a place to gather items for a homemade superhero costume, the Brooklyn Superhero Supply Co. is part of best-selling author Dave Eggers’ 826 National, a nonprofit that uses wacky stores like this one, and the original Pirate Store in San Francisco, to mask full-fledged tutoring centers.

Behind a secret door in the Superhero Supply Co. is a spacious learning center where students ages 6 to 18 participate in creative writing programs and get homework help. Even though the company’s main purpose is education, as part of the 826 network, it is not a typical nonprofit.

“We want people to get lost in the idea of a superhero store,” says store manager Chris Molnar. “We don’t want to beat them over the head with our programs. We want to keep the magic.”

By adding a level of mystery and fun to the nonprofit model, Molnar explains, the store draws in potential students and volunteers intrigued by a superhero supply company and manages to make seeing a tutor a fun experience for kids.

Molnar packages all of the products in the store’s basement, giving often-mundane objects new life through creative labeling and descriptions. All the profits go toward funding the store’s operations and educational programs.

Some of the items are essentially conversation starters to keep around the house, like X-Ray vision and speed of light powders:

If you’re looking to transform yourself into a cyborg, the store’s got you covered:

Need a cape to go with your new gear? Try one on and turn on a machine that will let you test out how the wind will grab it when you’re fighting crime.

If you’re doubting your zeal for justice, you can go into the villain chamber and answer a series of questions to see how you stack up. We were diagnosed as “mischievous” and had to recite a creed to purge us of our villainy.

Sales of the toys go toward keeping the store up and running, but the Superhero Supply Co. and the other seven 826 National stores are mainly funded through the support of foundations, corporations, and private donors, 826 National CEO Gerald Richards tells us.

Key donors include Time Warner Cable, Bad Robot, BlackRock, Google, Microsoft, Jansport, Random House Publishing, the NEA, Yellow Chair Foundation, Hearst Foundation, and the Points of Light Foundation. 826 operated on $6.2 million last year.

Richards says 826 National is in a growth phase and is considering expanding into Minneapolis and Philadelphia. Wiley will publish a series of 826 workbooks early next year, funded by Time Warner Cable.

The Superhero Supply Co. is also doing well and growing, Molnar says.

Its team of 250 volunteers, five staff members, and a handful of interns helped tutor over 2,300 students in the 2013-2014 school year, Marianna Lockington, 826 New York’s director of education, tells us.

She says that the team reaches out to schools across New York City, and teachers and parents create buzz through word of mouth.

One of its programs is a field trip for younger students who get to poke around the shop before they’re taken through the secret door and told to write a book. Before they leave, they pose with a pair of thick-rimmed black glasses (on sale in the front) for their author photos.