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Xiaomi's key to smartphone success: 'Be friends with our fans'

The up-and-coming Chinese smartphone manufacturer has gone from obscurity to China's number-one vendor in just four years. Xiaomi owes a large part of that to its attitude toward customers.

Xiaomi executives Hugo Barra, left, and Lin Bin address journalists in San Francisco. Josh Miller/CNET

For Xiaomi, customers aren't just nameless, faceless people. They're more like friends.

Four years ago, the upstart Chinese phone-maker had 100 customers. Today, it has over 100 million. Ask co-founder and president Lin Bin and he'll tell you an important ingredient in the company's success is its ingrained attitude toward buyers. His motto: "Be friends with our fans."

Lin spent nearly an hour at a Thursday event in San Francisco drumming home the message that its relationship with customers is the heart of Xiaomi's explosive growth to become the top smartphone maker in China, the world's most populous country.

One chief difference between Xiaomi and its better-known rivals Apple and Samsung is how involved its users are, said Hugo Barra, vice president of global. "We have higher engagement with our fans through our own media network than through [popular Chinese social network] Weibo, by like two times," Barra said.

Xiaomi also doesn't refer to its followers as buyers or customers, Lin emphasized. They're "fans."

Popcorn and rap videos

To illustrate Xiaomi's reliance on relationships with its loyal user base, Lin turned to its online community. The Mi Forum, which serves owners of Xiaomi branded devices and the company's MiUI (pronounced "mee-you-eye") version of Android, has 40 million users, Lin said.

James Martin/CNET

That is an impressive number for a company that's only been around for four years. What's more, these users show their dedication by posting photos of themselves with Xiaomi products and participating in frequent contests. One group of friends went as far as creating a rap video almost 4 minutes long dedicated to the company's wares.

The forums contain pages of these examples, Lin said.

Xiaomi also reaches out to fans through "popcorn festivals," events held throughout China and other markets where the brand is popular. There, 300 to 500 guests gather to bask in all things Xiaomi: they pose for photos and play games, win prizes and cheer at talent shows, and chat with Xiaomi executives and staff. And yes, there's popcorn.

Listen and do

All companies say they listen to their customers, using the best suggestions to improve real-life products. Xiaomi says the idea to integrate the flashlight button into the drop-down notification shade was supplied by a user who couldn't see the keyhole to his doorway when stumbling home drunk.

The company's attention to detailed requests has made it popular among Chinese people, who, Barra said, appreciate culturally relevant capabilities like the front-facing camera feature that assesses your age and gender before "beautifying" your image.

Xiaomi's OS was also the first at the time, Barra claims, to optimize T9 predictive text for Chinese names.

The Internet way

Xiaomi's chumminess with its users isn't just about being hip. It's also a business strategy that's a linchpin to the company's trademark rock-bottom prices, the reason that the fairly high-end Mi Note can sell for roughly half the cost of an iPhone 6 or Samsung Galaxy S5 .

Since Xiaomi relies on social media networks and its own forums and events to spread the word among its customers, it doesn't have to pay for pricey advertising campaigns.

xiaomi-miband.jpg
Don't want a phone? No sweat. Xiaomi will also sell "fans" this MiBand. Josh Miller/CNET

That, combined with a sales model that includes one-day flash bargains through its Mi.com retail site, means that Xiaomi can afford to collect lower margins from its hardware sales, a category that includes tablets and TVs as well as air purifiers and, unbelievably, bunny plushies (its mascot).

For Xiaomi, effective social media -- from popcorn parties to contests -- is just one more sign that proves the phone-maker is, in Barra's words, "an Internet company. We do things the Internet way."

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