1.  Introduction

This is the golden age of technological revolution and fierce competition, requiring companies to not only possess new technology and excellent products but also to have solid brand strategies and effective operational strategies to stand out among numerous powerful competitors. Xiaomi Technology, a renowned global technology innovation company, gains popularity by utilizing the 'hardware + services’ dual-drive method across three product categories: smartphones, smart appliances, and smart vehicles. This approach is supported by a vast ecosystem network known as the 'Mi Fan’ culture, which was established during its early development through hunger marketing and community interaction methods.

As time progresses, Xiaomi adapts to the market by integrating IoT to implement its core strategy of 'smartphone × AIoT’ during the ecosystem phase. Then, Xiaomi establishes a complete ecosystem that integrates people, cars, and homes effectively. Through its continuous innovation, Xiaomi keeps pace with the times and demonstrates the dynamic development of China's Internet technology. Through fast iteration of products and rapid adjustment of price strategies, as well as deep operation of services, Xiaomi's content platform shows the evolution and development of new economic era technology and tells the forward vision in the marketing direction and accurate needs of consumers about technological innovations, relying on a great amount of traffic and the power of users. The author thinks that it will not be difficult to expand or grow again by improving the user strategy in users' life circles.

Currently, Xiaomi has built up a global ecosystem for technology and Internet businesses covering consumer electronics, smart hardware, Internet services, smart vehicles, etc., operating in over 100 countries. But along with the changes and progress of times, Xiaomi is suffering from problems including omni-communications' form and content incompleteness and the authenticity of content 'UGC’ (user-generated content), the control problem and compatibility of the cooperation quality for the ecosystem's 'Ecosystem,’ segmentation of community users' experience, as well as optimization of value in the time they stay, etc. To overcome these problems, provide feasible solutions. Meanwhile, this text deeply analyzes practicalities and problems existing in Xiaomi's brand strategy with elaborated operations in various fields like Xiaomi's ULM acquisition, conversion, retention, etc., then provides more complete growth ways for Xiaomi and other technologies and proposes specific practice instructions and future improvement suggestions according to industry trends, comparative analyses, etc., and aspires to make double upgrades with sustained development and loyalty of users amidst fiercely competitive markets.

2.  Brand introduction

2.1.  Industry landscape

Xiaomi works in the smartphone, smart home, and smart car markets, which are all going through two changes right now: changes in technology and changes in the way the industry is set up. The global smartphone market rebounded in 2024, with shipments reaching 1.24 billion units, representing a 6.4% year-on-year increase. Industry competition exhibits a 'top-tier stalemate’, with Samsung, Apple, and Xiaomi firmly holding the global top three positions, and the CR5 (concentration ratio of the top five enterprises) exceeding 70%. Technologically, generative AI has become a core battleground, with AI smartphone penetration reaching 17% in 2024. The Android camp and Apple are engaged in an ecosystem race centred on edge-side large models, while manufacturers like Xiaomi are enhancing product differentiation through imaging AI and intelligent interaction features.

With the maturation of 5G and AIoT technologies alongside deepening consumption upgrades, China's smart home sector is experiencing explosive growth, reaching a market scale of RMB 480 billion in 2023 – a significant increase from 2020. Technological convergence is driving demand for 'whole-home intelligence’, though device compatibility remains a primary bottleneck. The market exhibits characteristics of 'ecosystem-based competition’, with leading enterprises building product portfolios through investment and incubation. Xiaomi's network of 900 million connected IoT devices has established a scale advantage, yet the industry collectively faces challenges such as rising customer acquisition costs and product homogenisation.

Amidst the wave of intelligentisation, the smart vehicle market has flourished. By 2024, global smart vehicle sales had climbed to 66.2 million units, achieving a compound annual growth rate of 10.5% over the five years since 2019. The competitive landscape of the smart vehicle industry exhibits diversification, with enterprises across different regions establishing differentiated advantages through technology, branding, and distribution channels: Tesla in the United States holds a significant position in the global premium market through technological leadership and brand strength. The Chinese market is fiercely competitive, with traditional automakers like BYD and technology firms such as Huawei expanding their market share through full industrial chain advantages and technological innovation. European traditional automakers, including Volkswagen and Mercedes-Benz, are accelerating their electrification and intelligent transformation. Japanese and South Korean enterprises are also actively positioning themselves, though their overall competitiveness remains relatively weak.

The three major industries collectively face common challenges, including supply chain cost pressures, heightened data security compliance requirements, and global geopolitical risks. Cross-industry technological convergence is emerging as the key pathway to breaking through growth bottlenecks. Xiaomi's 'human-vehicle-home ecosystem’ strategy presents opportunities through rapid expansion, yet also faces challenges from market competition and technological uncertainties.)

2.2.  Brand historical development

Founded in 2010, Xiaomi's development can be divided into four key phases: The start-up phase (2010–2014) mainly focused on 'software + hardware + services’ with internet-based sales and community operations, making 'mobile phones’ the core business, rapidly occupying market share with the 'hunger marketing + community engagement’ of digital marketing, and developing its main products based on consumer needs, such as mobile phones and routers. By 2018, its offerings had expanded to cover over 100 smart hardware categories, establishing a product matrix spanning the 'mobile peripherals – smart hardware – daily consumables’ product matrix. Digital marketing scenarios expanded from mobile phones to encompass all categories. Ecosystem Phase (2019-2021): Proposed the core 'Mobile × AIoT’ strategy. Launched Mi Home App 4.0 in 2020, enabling cross-device scenario integration. Connected devices exceeded 271 million units. Digital marketing entered the 'Ecosystem Synergy’ phase, concurrently deepening private domain operations. Xiaomi Community's monthly active users surpassed 50 million, becoming a core platform for product co-creation and user growth. The omni-channel era commenced with the announcement of Xiaomi's automotive initiative in 2021. The 2024 launch of the Xiaomi SU7 series signalled the implementation of the 'human-vehicle-home’ strategy, establishing a cross-scenario marketing ecosystem through smartphone-vehicle system integration (e.g., controlling in-car functions via the Xiaomi 14). In the digital marketing dimension, 'content omnipresence’ was achieved by establishing a 'tech reviews + lifestyle scenarios’ content matrix across platforms like Douyin and Kuaishou.

2.3.  Current brand scale

By the end of Q3, 2024, Xiaomi had built a worldwide technology ecosystem covering consumer electronics, smart hardware, internet services, and intelligent vehicles. Xiaomi smartphones ranked third worldwide in shipment volume. Smart home products accounted for over 900 million connected devices of more than 200 kinds. Monthly active users of MIUI worldwide reached 700 million. The new energy car MI SU7 (Model SU) topped with one delivery count of 135,000 units, ranking in the top five in China's market for high-end new energy cars. Xiaomi owned more than 100 countries and regions. Revenue created in other territories accounted for as much as 44.9% of Xiaomi's revenue altogether (in 2023). Production bases were established in emerging and developing countries, such as India and Indonesia. Additionally, several research centres were opened overseas, including locations in the UK, Sweden, and Germany (five countries in Europe), which contributed to the establishment of a large-scale 'Global Research and Development Centre.’ Digital channels achieved leading positions worldwide, while Xiaomi's social media presence gained over 300 million followers internationally. For the fifth consecutive year, Xiaomi topped the Fortune Global 500 list, ranking 122nd in 2024; thus, a prominent tech brand that merges large scale with technological innovation emerged.

2.4.  The brand's impact on individuals and society

For persons, Xiaomi lowers the threshold to smart living through high-value products and lets its 30 million community users join to co-create, improving users' experience. For society, Xiaomi has pushed over 2,000 supply chain companies to realise digital transformation, created more than 30,000 jobs directly, and the Foundation donates RMB 1.7 billion+, mainly for developing technology talent, supporting environmental projects, and creating a 'technology+philanthropy’ model.

2.5.  Brand differentiation characteristics

Xiaomi employs a dual-drive profit model of 'hardware + services’, distinguishing itself from Apple's premium pricing strategy and Huawei's technology-breakthrough approach. Leveraging 400 ecosystem enterprises, it has built an IoT device network exceeding 900 million units, expanding product categories through 'investment + incubation.’ Its 30 million community users form a private traffic pool, with user co-creation mechanisms and full-scenario ecosystem synergy constituting core competitiveness.

3.  Problem analysis - based on the User Lifecycle Management (ULM) model

Against the backdrop of digital media and marketing convergence, Xiaomi Technology has demonstrated significant achievements across all stages of the User Lifecycle Management (ULM) model through its distinctive brand strategy. However, it simultaneously faces a series of challenges and potential risks. The following analyses issues across Xiaomi's three critical stages: acquisition, conversion, and retention.

3.1.  Acquisition stage: Xiaomi's omni-channel strategy, social media and content marketing

During the acquisition phase of the User Lifecycle Model, Xiaomi employs a core logic of 'omnipresent reach + precise traffic diversion + emotional connection.’ Through three dimensions—omni-channel integration, precise value anchoring, and social media content penetration—it achieves efficient identification and interest activation among potential customers.

The omni-channel integration strategy constructs a boundary-less customer acquisition network, forming a synergistic online-offline closed loop for traffic diversion. Online, Xiaomi leverages its proprietary e-commerce platform, official app, and third-party marketplaces to establish a product information matrix. Concurrently, it deploys content entry points across social platforms like Douyin, Xiaohongshu, and Weibo, meeting potential customers' online research needs through product specification analysis and aggregated user reviews. Offline, by October 2021, Xiaomi had established over 10,000 Mi Home stores across mainland China. These spaces feature smart home showrooms and product trial zones to create immersive experiences, complemented by professional sales consultants providing real-time explanations to reduce cognitive effort. This 'online recommendation + offline verification’ model achieves synergy through inventory synchronization and appointment-based experiences, catering to diverse consumer preferences. As one customer remarked, 'The combination of researching details online and testing devices in-store made me keen to explore the brand further’ [1,2].

Precise market positioning and value anchoring provide core customer attraction. Xiaomi initially targeted the market gap where 'high-end phones were unaffordable and knock-offs offered questionable quality.’ In 2010, when the iPhone 4 cost ¥4,999, Xiaomi launched the Redmi phone at just ¥799. Its comprehensive basic functionality and stylish design precisely captured students and young professionals in third-tier cities [3]. To reinforce its cost-performance credentials, founder Lei Jun publicly pledged that 'Xiaomi's hardware net profit margin shall never exceed 5%, with any surplus fully refunded to users’ [3]. This value endorsement significantly lowered potential customers' trust barriers. Subsequent expansions into diverse product categories—such as the £9.90 'Super-Writing’ pen and £4.90 artistic power strip—further embedded this perception of cost-effectiveness into everyday scenarios.

Social media and content marketing have become very important ways to reach out to potential customers. Xiaomi uses a dual-drive model of 'KOL/KOC vertical penetration + UGC word-of-mouth amplification’: inviting tech KOLs to do performance tests on Douyin and Bilibili, working with lifestyle KOCs on Xiaohongshu to make scenario-based guides, and using multi-platform creators for pre-launch teasers (for example, crash test analyses before the Xiaomi SU7 launch), which got more than 10,000 reservations in four minutes [3]. At the same time, it encourages people to write reviews, make innovative films, and make other material. Hashtag campaigns like #XiaomiSmartHomeExperience increase the impact of spreading information, and user-generated content (UGC) gives potential consumers real references and is a key, low-cost way to get new customers [1]. Also, founder Lei Jun's IP empowerment strengthens emotional ties by using popular internet tags and subjects to get people talking about the brand and close the psychological gap between it and potential customers [3].

Through this multi-strategy synergy, Xiaomi achieved scalable coverage of potential customers: omni-channel solutions addressed 'reach breadth,’ precise targeting anchored the 'demand matching’ core, while social media and content marketing completed the 'interest activation’ loop. This ultimately established a low-cost, high-efficiency customer acquisition system, laying the groundwork for subsequent conversions.

3.2.  Conversion phase: Xiaomi's ecosystem synergy and scenario-based value conversion strategy

During the conversion phase of user lifecycle management, Xiaomi employs the core logic of 'building barriers through ecosystem synergy + driving decisions via scenario value’. This approach leverages product portfolios, technological empowerment, scenario construction, and trust-based linkage to efficiently convert potential customers into paying users. Based on ecosystem strategic synergy theory, Xiaomi constructs a '1+4+X’ product architecture [4]. Centred on smartphones, it integrates four key categories of IoT devices and broader ecosystem products. Through resource coordination, it consolidates complementary resources from hardware suppliers, software developers, and other partners to create consumption complementarity. Examples include health data linkage between smartphones and smart wristbands, or unlocking functionality coordination with smart door locks. This drives users from single-product purchases towards multi-category repeat purchases. To ensure consistency across ecosystem products, Xiaomi employs a hybrid 'investment + incubation’ business model, holding 20%-30% minority stakes in ecosystem enterprises while providing end-to-end support including supply chain and design services [5]. By December 2020, its IoT platform had connected 325 million devices across over 400 ecosystem companies, establishing the scale foundation for conversion [4].

Standardizing technology is an important way to lower the costs of making decisions. Xiaomi sets standard technical specifications for hardware interfaces and data interchange formats, opens IoT platform interfaces and software development kits, and makes universal smart modules available at production cost to fix problems with devices that do not work with one another [4]. At the same time, it uses a unique support strategy for each product category [5]. This keeps users from getting confused by internal rivalry and speeds up the decision-making process. Scenario-based value guidance further stimulates conversion demand: from early smart home scenarios linking smartphones with televisions and robotic vacuum cleaners to HyperOS-enabled cross-scenario device interconnectivity under the 'human-vehicle-home full ecosystem’ (e.g., Xiaomi SU7 integrating with home security systems), Xiaomi consolidates disparate products into contextualized solutions [4,6]. When combined with voice control through the AI assistant Xiao Ai, this strengthens the idea of ecosystem value [6].

The trust framework speeds up the process of turning customers into buyers. Using the fan economy, word-of-mouth from the first beta users creates a 'discovery-trust-conversion’ pipeline [6]. Physical stores use a 'high-frequency mobile devices driving low-frequency IoT products’ display strategy [5]. This means that they use scenario-based demonstrations and professional sales advice to make it easier for customers to trust them, which makes it easier for them to go from 'experience’ to 'decision-making’ to 'purchase.’

3.3.  Retention phase: the 'membership system + UGC co-creation’ strategy and its room for improvement

During the retention phase of user lifecycle management, Xiaomi established a three-dimensional retention framework centered on 'strengthening user stickiness and extending lifetime value’: 'emotional foundation – co-creation deepening – ecosystem lock-in’.

Community operations are the main way to build emotional relationships, which is the first step to keeping customers. Lei Jun and other high-level executives post a lot of updates every day on sites like Sina Weibo, where they answer user questions on new products and company news. This method breaks down the usual boundaries between levels of management in a company, thereby making it easier for people to talk to each other [7]. The Xiaomi Community divides users into 'Hardcore Fans’ and 'Casual Fans’ based on how much they engage and comment. It then gives each group certain privileges and rewards to encourage peer support. There are regular offline events like Fan Festivals and local gatherings where Lei Jun talks about successes, gives out feedback presents, and gives the money from ticket sales to charity. This helps to build a 'family-like’ community identity [7]. To meet the emotional needs of different groups, Xiaomi gives casual fans virtual money and honorary titles to meet their social needs, while for dedicated fans, it reinforces a sense of 'inclusivity’ through cultural identification, making them see Xiaomi as a part of their lifestyle [8].

Value co-creation keeps people interested in a product by getting them involved at every stage of its development. Xiaomi gathers feedback from consumers through MIUI forums and communities. They put out new versions of the system every week to promptly meet requests for hardware and software changes, like longer battery life or improved camera settings. For new products, like the Xiaomi SU7, TF-IDF pulls out user-generated content keywords, and K-means clustering finds the most common complaints regarding 'appearance and performance.’ This allows designers to make improvements, like modifying the shape of the taillight, to make customers happier. At the same time, it provides fans a way to work together to make new things and try them out first. Key users are hired as consultants, and projects like the 'Pangu OS Review Competition’ receive more than 100,000 responses from users. This procedure changes users from 'product feedback providers’ to 'innovation drivers’ [8].

Ecosystem binding secures long-term retention through whole-scenario value. Leveraging the '1+4+X’ ecosystem architecture, Xiaomi centers on smartphones while integrating IoT devices like smart TVs and robot vacuum cleaners. Seamless connectivity via the Mijia app creates a retention pathway of 'single-product purchase → multi-category repurchase → dependence on whole-scenario integration’ [10]. Expanding beyond smart home scenarios into a 'human-vehicle-home ecosystem’, the Xiaomi SU7 integrates with home devices (e.g., automatically activating security mode upon exiting the vehicle), extending retention from individual products to entire living scenarios and reinforcing 'ecosystem irreplaceability’ [8].

Three progressive strategies: emotional bonding fosters psychological identification, co-creation of value deepens user engagement, and ecosystem lock-in increases switching costs. Together, they form an 'emotion-value-scenario’ retention loop, effectively extending user lifecycles.

3.4.  Comprehensive analysis and industry implications

Xiaomi's user lifecycle management (ULM) practices across acquisition, conversion, and retention phases, centered on 'user-centricity + ecosystem synergy + low-cost, high-efficiency operations’, provide a sustainable growth model for enterprises in consumer electronics, smart home, and related sectors. Its core logic lies in integrating user needs throughout the entire operational chain, breaking the limitations of 'single-point operations’ to construct a complete 'awareness-conversion-loyalty’ loop: At the acquisition stage, data deconstruction identifies user pain points (e.g., price sensitivity, scenario-based needs), achieving precise targeting through 'value propositions like cost-effectiveness + omni-channel penetration via physical stores and social media matrices’ to avoid indiscriminate traffic spending [1]. The conversion phase transcends single-product thinking by amplifying perceived value through scenario combinations of 'core products + complementary services’ (e.g., smartphone integration with smart home devices). Unified technical standards eliminate user decision-making hesitations, with 2020 data indicating ecosystem-linked conversion rates exceed single-product rates by 45% [4]. Retention relies on tiered community operations, user co-creation (e.g., MIUI weekly iterations) and emotional connections (Lei Jun's IP, Fan Festival), transforming users from consumers into co-creators rather than relying on short-term promotions [8].

Further analysis shows that Xiaomi's main strategy to overcome ’single-category growth stagnation’ is ecosystem synergy. This means that it offers industry solutions to problems with conversion and retention: it has invested in and incubated over 400 ecosystem businesses through a 'core capability openness + complementary resource integration’ model, and it has achieved device interconnectivity through unified interfaces and modules. Furthermore, it extends from a smart home to a 'human-vehicle-home full ecosystem’, leveraging HyperOS to integrate multi-scenarios, embedding itself into users' lives through 'irreplaceability’ and extending retention cycles [4]. Concurrently, Xiaomi achieves low-cost operations through synergistic 'content + data + community’ integration, which sets a benchmark for smaller brands: it leverages KOL vertical promotion and UGC viral growth to maintain marketing costs at one-third of the industry average and builds a closed-loop 'demand forecasting-strategy optimisation’ system using full-funnel application data (e.g., identifying high-potential users during customer acquisition and iterating products during retention phases). Furthermore, tiered incentives convert its 320 million community users into 18 million daily active private domain assets [8,9].

Ultimately, Xiaomi's approach demonstrates that ULM's essence lies in long-term value cultivation rather than short-term tactics. This reveals an industry-wide imperative to shift from prioritizing sales over users towards demand-side data insights, supply-side ecosystem collaboration, and relationship-side emotional engagement – ultimately forging a low-cost, high-retention growth model.

4.  Recommendations

Regarding customer acquisition, Xiaomi's omni-channel strategy suffers from 'formal linkage but substantive fragmentation’. Out-of-sync inventory and inconsistent service standards persist across channels, contradicting the core principle of 'seamless integration’ [2]. The content ecosystem's lack of UGC filtering leads to fake recommendations and homogenized KOL content, diluting authentic word-of-mouth value. Additionally, ambiguous user profiling boundaries pose data compliance risks. To address this, an omni-channel collaborative middle platform must be established to achieve real-time synchronisation of data across online stores, e-commerce platforms, and physical outlets, with dedicated personnel assigned to resolve service discontinuities across scenarios. A content tiering governance system combining 'AI initial screening + human verification’ should be implemented, alongside introducing vertical field certification for KOLs and requiring substantiation through actual testing data. A legally compliant data collection framework must be constructed, employing anonymisation techniques and user authorisation models, with regular public disclosure of data usage details.

Entering the transformation phase, Xiaomi's ecosystem synergy strategy prioritizes quantity over quality. 400 Quality control standards vary across its 400 ecosystem enterprises, with some IoT devices exhibiting poor compatibility that contradicts the requirement for 'system synergy’ [5]. Scenario conversions often involve product aggregation rather than personalised adaptation; after-sales support for ecosystem products is handled by third parties, resulting in slow responses and unclear accountability, which easily triggers negative feedback from users [6]. Optimisation requires implementing a tiered quality control mechanism, establishing three-level standards for core, important, and generic categories. Core categories should undergo direct inspection by Xiaomi, while important categories require dedicated quality control specialists. Xiaomi must develop a scenario-customization engine based on user profiles, designing differentiated packages for distinct user groups and integrating automated solutions via the Mijia app. Additionally, Xiaomi needs to establish a unified after-sales system featuring 'Xiaomi's ultimate guarantee + third-party accountability’, launching dedicated customer service channels with publicly displayed processing timelines.

Regarding retention, community segmentation exhibits 'polarization’, with excessive privilege allocation to core fans diminishing ordinary users' engagement, contradicting the 'community symbiosis’ principle. The co-creation mechanism suffers from a tendency to collect more than it implements, with user suggestions facing lengthy response cycles and a lack of public disclosure regarding outcomes. Ecosystem integration emphasizes 'synergy over experience’, with HyperOS experiencing occasional lag and redundant product categories reducing user stickiness. To address this, reconstruct a tiered community growth system based on 'points - levels - privileges’, requiring core fans to mentor newcomers to retain their privileges. Establish a 'suggestion express lane’ within the community, committing to 72-hour feedback and publishing an implementation checklist, while rewarding contributing users for co-creation. Suspend the introduction of redundant product categories, form a dedicated team to implement weekly HyperOS iteration fixes, and synchronize optimisation progress.

5.  Conclusion

Amidst the digital marketing wave, Xiaomi Technology has achieved remarkable success across smartphones, smart home devices, and smart vehicles through forward-thinking strategic vision and an innovative User Lifecycle Management (ULM) model. Through in-depth analysis of the three critical stages—acquisition, conversion, and retention—this paper reveals how Xiaomi has built a low-cost, high-efficiency user growth and retention system amidst fierce market competition. This is achieved through omni-channel integration, precise market positioning, social media and content marketing, ecosystem synergy, scenario-based value conversion, and emotional connection with value co-creation.

Xiaomi's success stems not only from its pace of technological innovation and product iteration but more profoundly from its deep understanding and implementation of a user-centric digital marketing philosophy. By embedding user needs throughout every stage of brand development, optimising experiences, and enhancing engagement, Xiaomi has achieved deep interaction between the brand and users, fostering long-term co-creation of value.

Xiaomi, on the other hand, faces several problems because the market is changing quickly and users' needs are becoming more diverse. Problems with omni-channel integration, content ecosystems, ecosystem synergy, and keeping users are still important issues that need to be worked on and solved in the future.

To achieve this, Xiaomi needs to keep improving its data-driven capabilities and build a user insight system that is smarter and more accurate. At the same time, it should improve ecosystem synergy and raise the bar for product quality control and compatibility to give users a smoother and more personalised experience. Furthermore, it will be important to make community operations stronger so that everyone feels welcome and works together. This will help users be more creative and loyal.

Looking ahead, digital marketing will continue to profoundly influence and reshape the development landscape across all industries. As a pioneer and leader in digital marketing, Xiaomi Technology's practical experience and innovative strategies in user lifecycle management not only provide robust support for its sustained growth across three major industries but also offer valuable insights and inspiration for other enterprises. In this new age of digital marketing, Xiaomi will stick to its development philosophy of 'innovation, openness, and sharing’. It will keep looking for and using innovative ways to add more value for consumers and help society more.