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Why are Xiaomi phones so cheap? Your CEO reveals it


Xiaomi is a company that we like a lot, and, although the quality of its products has a lot to do with this assessment, the truth is that its price is also decisive, and to a large extent, since it is what causes –together with this quality of the product– that its terminals seem so attractive to us.

Xiaomi Redmi Note 8T, cameras

Xiaomi's pricing strategy has always been very aggressive, and it is something that characterizes the company, and that has earned it second place in Spain. And now, the CEO of the firm has explained why their devices are so cheap, Let's see what he said!

Lei Jun reveals why Xiaomi devices are so cheap

According to Lei Jun himself, Xiaomi manages a profit margin that is around 8% or 9%, something that allows these devices to be very cheap, although it causes that the unit profits of the company for each mobile are not very large.

Xiaomi Redmi Note 8T, screen

I think the 8% to 9% margin is very low and since our sales model is based on e-commerce sales, the price that the end customer ends up paying is very cheap. Most importantly, our gross profit is very low, and the middle channel is very short, so the final price in the retail market is still very attractive to buyers.

As we can see, Jun ensures that the company has very little profit margin with your mobile phone business, which would be the reason why they can afford to sell at such a low price.

It should also be remembered that Xiaomi is not only dedicated to mobile phones, but is present in a lot of other sectors with thousands of products that sells through the main brand, or one of the many subsidiaries that are created each year. It may be in those products that the real benefit of the company is.