This article comes from the WeChat public account “Tencent Deep Web” (ID: qqshenwang), author Ma Guanxia, Love Fan is authorized to publish.

A tall, sexy woman, squatting on a mobile phone lying on the floor with high heels, then bending over and smiling, indicating that the phone is unscathed. This is a promotional video broadcast by Xiaomi’s new independent sub-brand Redmi before the launch of the new mobile phone Redmi Note7 in January this year.

On January 3, Xiaomi officially announced the independence of the Redmi brand and implemented the dual brand strategy of “Millet+Redmi”.

Redmi Note7’s internal code name “Little King Kong”, not only the promotion video “Just”, the conference site is also very “just”. At the launch conference of RedmiNote7 on January 10th, the rare firepower of Wen Wenruya’s Lei Jun was fully opened, and a bold white font on the black PPT was displayed. “Life and death are bearish, and it will not work.” When introducing product configuration, Lei Jun is The tit-for-tat talked, “Would you like to hang the glory 8X? If you forget, give them some face, and then I will disassemble the scene.”

Lei Jun released his words, the audience applauded and thunderous, and the enthusiastic applause included Lu Weibing, the head of the Redmi brand who just joined Xiaomi.

At the same time that Lei Jun’s name is to glory, the Huawei team in the south of Shenzhen, the glory team is holding an annual celebration feast. In the past 2018, the glory performance was good. The data released that the annual mobile phone sales exceeded the millet for the first time. The insiders revealed to Shennet that during the celebration party on the day, the glory teams from all over the world were drinking right. Someone found a call from Lei Jun at the Redmi conference in Beijing. The glory team was ready to respond, but was eventually vetoed by glory president Zhao Ming.

Until two months later, at the Shanghai signing ceremony of the new book “Towards the New Track” by Huawei’s consultant Tian Tao, Zhao Mingcai publicly responded to Lei Jun’s remarks that “the life and death are bearish and disobedient.”

“I didn’t see the press conference. After the little friend saw it, he laughed and sprayed it. Like watching a TV series, it is a bit like the old and young movie of the year. The mobile phone circle should not be like this.” Zhao Ming also said that “Lee always Marketing master, but his pressure is also very big. 2019 is the year of “the wind and the grass”, mobile phone manufacturers are under tremendous pressure, so many companies have leaked the bottom line and the bottom card.

Lei Jun is really under pressure. Since Xiaomi was listed on the Hong Kong Stock Exchange on July 9, 2018, Xiaomi’s share price has been diving all the way. Lei Jun’s departure from “to be listedThe promise of double the number of investors who bought shares in Xiaomi Company on the first day has become farther and farther. “Everyone invested me $5.5 billion. If it falls ugly, how can I go out and see people?” In the face of the challenge, Lei Jun once claimed that he could not sleep with anxiety.

Behind the decline in Xiaomi’s share price is the weakness of the main business of mobile phones. An analyst from a foreign-funded hedge fund in Hong Kong analyzed in an interview with Shenbo that “the stock price of Xiaomi is not good, and it is inseparable from the overall poor market. But the main influencing factors are the high pricing at the time of listing and the unsatisfactory business of the company.” .”

Public data shows that in the fourth quarter of 2018, the global shipments of Xiaomi mobile phones experienced negative growth, down more than 3 million units year-on-year, and the number of products decreased by more than 8 million units. The growth rate of Xiaomi’s mobile phone business revenue also increased from 2018. In the first quarter of the year, 91% all the way down to 7% in the fourth quarter. The newly listed millet ushered in the “dark moment” in the past two years.

Lei Jun has always emphasized the uniqueness of the Xiaomi model: using hardware to exchange income and traffic, and then relying on Internet services to make profits. Despite the controversy, to a large extent, Xiaomi still obtained the valuation standards of Internet companies. Before the listing, the outside world even gave a valuation of up to 200 billion US dollars. In the latest Fortune Global 500 rankings, Xiaomi has also been classified as a company in the “Internet Services and Retail” category.

The premise of the above business logic is that Xiaomi must ensure that it continues to succeed in the smartphone market. The capital market can’t stand the slowdown or even decline in smartphone sales growth as the basic disk of Xiaomi’s hardware business. Lei Jun clearly knows this.

Winter and growth anxiety

“Winter has come. We are about to face the most serious challenges in 2019. There is no room for blindness and optimism.” Lei Jun said at the Xiaomi 2019 annual meeting at the beginning of the year, “In this winter, everyone’s days are Not good.”

The mobile phone industry is indeed a winter. According to Gartner, a third-party market research firm, global smartphone sales for the full year of 2018 increased only 1.2% from the previous year. Gartner’s latest report predicts that global smartphone shipments will decline by 2.5% in 2019.

The Chinese market is also not optimistic. According to Gartner’s data, China’s smartphone sales fell 14% year-on-year in 2018, and Gartner expects that Chinese smartphones will fall in 2019.

In 2018, China’s smartphone penetration rate has exceeded 96%, and 4G user penetration rate has also exceeded 70%. In the era of smartphone stock competition, mobile manufacturers are competing with each other, and the market is falling. The manufacturers have to fight from the configuration, price to marketing level to win more.living space.

The result of this fierce competition is that the brand concentration of the Chinese mobile phone market is getting higher and higher, and the survival space of small and medium-sized brands is further compressed: in 2018, Jin Li’s “death”, the hammer capital chain crisis, and Meizu’s shipments have declined. above 50.

The founder of Liujia Mobile, Liu Zuohu, said at the end of 2018: “The mobile phone industry has more than 6,000 mobile phone brands when it is most prosperous. Now 99% has disappeared. This is the change we have seen. In the past five years, half of each year. Mobile phone brands will disappear, this is a thrilling industry.”

The gradual decline of the second-line brand has almost smoothed out the market buffer zone that originally existed between the head manufacturer “Hua Mi OV”, and the market share of “Hua Mi OV” from the second-line brand is getting more and more. Less, this “power game” that captures market share has completely become a zero-sum game.

Compared with Huawei, OPPO and vivo, Xiaomi has always emphasized that “price-performance” Xiaomi is mainly in the low-end products in the mobile phone market. According to the data of the prospectus submitted before the listing of Xiaomi, in the first quarter of 2018, the total global sales volume of Xiaomi mobile phone was 28.431 million, of which the sales of the low-end models of the Redmi series were 22.06 million, accounting for nearly 80%, and the high-end flagship was insufficient. 2%.

For Lei Jun, who is facing growing anxiety, and Xiaomi, who leads him, it is very important to make a high-end market. Going into the high-end market means that Xiaomi has the opportunity to compete for more high-end users from Apple, Huawei, OPPO and VIVO, and high-end users can bring higher unit price and more profit margin to Xiaomi.

For a long time, Redmi, which is the main force of Xiaomi’s shipments, is mainly based on low-end mobile phones. In addition, Redmi and Xiaomi use the same brand identity, which has largely affected the brand awareness of Xiaomi. Millet and Redmi’s brand cutting is imperative.

According to “Shennet”, in 2018, Xiaomi’s core strategy in the Chinese market is to develop high-end market and enhance brand image. Throughout the second half of 2018, Xiaomi did not send any new Redmi phones. The outside world generally believes that Xiaomi intends to downplay Redmi and open the way for the high-end of mobile phones.

And in 2019, Xiaomi’s brand transformation accelerated. On January 3, Lei Jun announced that Redmi will establish a new independent brand Redmi.

Xiami chooses a dual-brand strategy similar to Huawei’s mobile phone: the Xiaomi brand targets the mid- to high-end market and the Redmi brand targets the low-end market. In the words of Lei Jun: “Redmi Redmi focuses on the most cost-effective, mainly in the e-commerce market. Xiaomi focuses on high-end and new retail.”

Of course, while the Xiaomi brand focuses on the high-end, it also accounts for about 80% of Xiaomi’s shipments.