Forefront | Lu Weibing responds to “low prices by mistake”: Huawei is an example of Chinese companies’ “low prices” strategy

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Since its establishment, Xiaomi has entered the mobile phone market with a high cost performance and Internet model. In just a few years, mobile phone manufacturers with top 5 global shipments.Even when Xiaomi’s 2016 shipments fell into a crisis, Lei Jun did not give up his insistence on cost performance.This model of Xiaomi has made it a head-phone manufacturer quickly from scratch, but it has also encountered many questions.From a business perspective, excessive adherence to cost performance has affected the pace of Xiaomi’s mobile phones towards the high end. Until the beginning of this year, Xiaomi was determined to separate the Redmi brand and carry the banner of cost performance, so as to release the Xiaomi brand to impact the high-end market.But some people think that low prices are the original sin of Xiaomi.Huang Zhang, the founder of Meizu, made this evaluation when evaluating the pricing of Xiaomi Mi: “I want to rush to the high end but the eyes are low, the scum is accustomed to the high, the scum is cheap and the industry is low.” Recently, the Internet information blogger @ 信 通 小Panda also questioned Xiaomi’s low-price model on Weibo, saying that Xiaomi was a wrong country for low prices.He said: A company like Xiaomi can have a large number of fans and markets in China, which itself shows that China’s society and structure are problematic. You can hardly imagine that people in developed countries will worship such enterprises.The price is proud, the low price is reasonable, and the low price can be a stumbling block for a large country to upgrade to a world-class level.In response, Lu Weibing, who was recently promoted to president of Xiaomi China, responded: “The” example “in developed countries is a manifestation of lack of national self-confidence. Moreover, Wal-Mart, IKEA, Costco, Uniqlo and other companies and brands have appeared in” developed “countries, Benefiting the whole world. “Lu Weibing’s IKEA, Uniqlo, etc. are usually also considered as cheap brands.Among them, Xiaomi also cooperates with IKEA. From December 2018, all IKEA lighting products will be connected to the Xiaomi platform including Xiaoai’s intelligent voice assistant. It will first land in China and will be promoted globally in the future.In the cooperation, the two sides also emphasized the matching of each other’s values, and both are committed to providing affordable and high-quality products.In addition, @ 信 通 小熊猫 also raised another question: Low prices will lead Xiaomi to have no money for R & D: “If you are cheap at home and abroad, even if the problem is that you are also cheap abroad, then what do you get?Money for R & D. What do you use to pay your employees in China? What do you use to help Made in China establish a high-end brand image overseas? Lu Weibing responded: “Does Xiaomi have money for R & D, see Xiaomi Financial ReportYes (the key is to read). Xiaomi’s employees are many talents from top universities in the world and cannot be attracted without high salaries. “Despite the decline in profits in the past two quarters year-on-year, Xiaomi has maintained profitability in the past two years.In 2018, Xiaomi’s adjusted net profit reached 8.555 billion yuan.Xiaomi’s investment in research and development is also increasing. Lei Jun has said that Xiaomi’s investment in research and development this year is expected to reach about 7 billion yuan, an increase of about 20% year-on-year.Lu Weibing also took Huawei as an example to support his point of view: “I have studied Huawei’s development path in depth and have read President Ren’s speech and President Ren’s strategic speech on mobile terminals at different stages. Huawei is an example of the” low-cost “strategy of Chinese companies.And the lowest price of the Double 11 smartphone is 399, which is a certain model of a friend. “Thanks to the success of the P and Mate series, Huawei has become a brand with strong competitiveness in the high-end mobile phone market.But in fact, both P and Mate have gone through several years of brand upgrades.In addition, Huawei’s mobile phone business layout is also a comprehensive layout of high school, low-end, and Huawei’s glory is a mobile phone brand that focuses on cost performance.In October 2017, Ren Zhengfei pointed out in a consumer BG business report and a keynote speech: low-end products cannot be ignored.First, although low-end machines make less money in commercial success, they defend the high-end machine market.Second, low-end machines meet the needs of ordinary consumers, and 95% of the world are ordinary consumers.Therefore, the success of low-end machines is also a commercial success.Ren Zhengfei also pointed out that the low-end machine is not a defective product, and it must be of high quality: “The low-end machine must be of good quality, low cost, and maintenance-free during its life cycle. It is necessary to polish mature and high-quality mass-delivered products.After tens of millions of units have been trained and run in, there are no failures, quality improvements, and no technical risks, and then purchasing through batches to reduce procurement costs is the practice of low-end machines.”Nevertheless, Lei Jun and Xiaomi often face doubts about cost-effectiveness. Lei Jun once said:” The biggest challenge for Xiaomi is the perception of “cheap but no good goods” by some people!On numerous occasions, Lei Jun is emphasizing cost-effective, not cheap and not good, but the lowest price and best performance at the same price. At the beginning of this year, Lei Jun was even very excited.Expressed: “Because you talk about the value for money, everyone says your product is low. I saw that the material of my friend was half annoyed when I said it was a penny and a penny. In fact, I have been handwritten for seven or eight years.Yes, because our stuff is cheap, they naturally feel that the quality of the cheap stuff is questionable.”It can be seen that although Xiaomi and Huawei are both supplying a large number of low-end models, and Xiaomi and Glory are both based on cost-effectiveness, Xiaomi is often troubled by cost-performance challenges, and Huawei is exempted from similar blame. The reasonIt is because Huawei has succeeded in the high-end machine market, and Xiaomi is struggling on the road to brand upgrade. It is not a problem with insistence on price / performance. If Xiaomi can deliver a satisfactory answer in the high-end machine market, it will no longer make price / performance the most for Xiaomi.The eye-catching label, maybe Xiaomi does not have to make such a response again and again. Attach the full response of Lu Weibing: Today many people @I hope I comment, briefly say: 1. When a person thinks that it is China’s social culture and structureWhen there is a “problem”, it must be a “problem” in his own head; 2. “Illustrating” in developed countries is a manifestation of lack of national self-confidence, and Wal-Mart, IKEA, Costco, and Uniqlo appear in “developed” countriesCompanies and brands benefit the world; 3. If Xiaomi has the money to do research and development, just look at Xiaomi’s financial report (the key is to read it).Xiaomi’s employees are many talents from top universities in the world and cannot be attracted without high salaries; 4. I deeply researched Huawei’s development path, read President Ren ’s speech and President Ren ’s strategic speech on mobile terminals at different stages. Huawei is a Chinese companyAn example of the “low-cost” strategy, and the lowest price of the Double 11 smartphone is 399.Finally, I remind you that the “fallacy” is all commas, there is only a question mark, and no period.It is advisable to go back to elementary school to learn Chinese first, and then return to middle school to learn the logic, then it is advisable to publish the “big argument”, otherwise it will be a bit shameful.The head picture is from Xiaomi.