When customers become fans

Abstract

In less than six years, Beijing-based Xiaomi Inc. has become one of the worlds leading smart-phone makers. One key factor is that the company offers its phones to customers in China at lower prices than competitors like Apple Inc. and sells mainly via e-commerce to keep costs low. But Xiaomi has done more than just keep costs down; it has also cultivated user pride through user-centered and open innovation, harnessing the energies of enthusiastic customers known as Mi Fans. Xiaomi actively involves Mi Fans in both software and hardware development processes. For example, Xiaomi's Android-based user interface MIUI went through a fast-iteration development process. Xiaomi put the first version of MIUI online in August 2010. Xiaomi turns to the Internet as a major channel to communicate with its users. Interacting with users in fun and lighthearted ways is another feature of Xiaomi's marketing strategy.