November 8, 2014 by ...
China’s tier one cities are the big boys. Places like Beijing, Shanghai Guangzhou. They are usually the capital of the province and have more of everything. More cash, better schools, they are the places that most Chinese want to go.
In developing countries, the differences between a major and minor city can be mind numbing. This is especially true in the PRC. For example, I traveled to a decent size tier two city and had to do without electricity from midnight to noon, I kid you not.
Everyone, it would seem, is racing to the big towns, except for Xiaomi. As you can see from the chart below, Xiaomi has taken a divergent track. They sell the vast majority of their product in China’s poorer cities. This only makes sense when one considers how much money there is in places such as Beijing and Shanghai. Beijing, for instance, has more billionaires than Germany.
Those cities rock the real thing, and to denizens in Beijing and others, Xiaomi is second class. It is an imitation of the real thing, product for aspiring Iphone consumers. A step in the direction of a world class product but not to be confused with one.
Lei Jun, however, does not mind. In fact, he is following the strategy of Mao himself. Instead of battling in the cities, Lei is surrounding them in the countryside.
The chart below tells the tale….(from China Internet Wath)