Chinese mobile phone company Xiaomi Corp is getting a valuation of at least $9 billion in the private market, Quartz has learned from investors and potential investors who have assessed the company. That figure—more than double the $4 billion valuation it had a year ago in a fundraising round—makes Xiaomi one of the fastest growing Chinese startups and puts it on track to becoming one of the largest Chinese technology companies.
Xiaomi doesn’t exactly flaunt its success. It doesn’t have any retail stores and sells its phones exclusively online. It also communicates with customers solely through social media and online forums, and barely spends any money on marketing.
But the strategy has worked. Its valuation, one that exceeds BlackBerry’s market capitalization of $7.5 billion, is a feat considering that the company is only three years old and sold its first smartphone in 2011. Xiaomi sold $2 billion in mobile phones last year and is aiming to double sales this year. The company competes with Apple and Samsung by making high-end phones with sleek designs and pricing them more cheaply than the iPhone and Galaxy models. Xiaomi’s tactics have attracted a loyal following. Fans flock to its live launch events by the thousands, and new models often sell out within minutes.
Xiaomi is hoping to make up for low profit margins on hardware with higher-margin services and software that address the needs of the country’s growing smartphone market, such as online payments and other e-commerce activities.
Xiaomi did not return calls seeking comment.
The company’s founder, Lei Jun, is often called the Steve Jobs of China. Charismatic and flashy, he at times even sports Jobs’s signature outfit: a dark top and jeans. His long career in the technology sector, which began in the late 1990s, took off when he co-founded Joyo.com, a Chinese online retailer of books and music that was sold to Amazon.com in 2004.
Critics of Xiaomi attribute its success to copycatting competitors like Apple, not innovating. But its fans appreciate that Xiaomi’s phones are very customizable, a feature that resonates especially with young Chinese.
Xiaomi’s philosophy is spreading beyond China. The company will soon be selling phones in Hong Kong and Taiwan, and consumer electronics news site Engadget reported that Xiaomi may start selling its phones in Europe later this year. Leaked images on Sina Weibo suggest Xiaomi may also be working on a smart TV.
The key to Xiaomi’s continued success will be offering comparable or better features than Apple and Samsung while cultivating a stronger brand than other cheap phone makers like Huawei and ZTE. Before long, Apple and Samsung may be taking cues from Xiaomo’s loyal following.