You probably heard Xiaomi’s phone before but not familiar with Xiaomi’s powerbank. This March, Xiaomi Inc. claimed its MI powerbank is the best-selling powerbank in the world. It started powerbank business in 2013, and sold more than 10 million pieces in the first year and reached 55 million pieces of cumulative sold quantity within 3 years. Even the most of them were sold in China, you already can find them in some countries' retail stores. How did Xiaomi make it happen? We can find out the reason from the origin of powerbank.
In the beginning, mobile phones market was growing too fast and Li-battery packs were severely shortage, then massive new suppliers came. Soon, shortage became over supply. Surplus battery packs were put into plastic cases and became a new product, which was powerbank. Therefore, powerbank was derived from surplus battery packs from mobile phone. On the other hand, portable hard drive was derived from surplus laptop’ HDD. Has it drew you any inference?
In 2013, Lenovo became the biggest laptop’s supplier, in the meantime, iPad impacted laptop’s market immensely. Big brands, OEM manufacturers and battery suppliers had a lot of surplus 18650 battery cells on hand, such as HP, Dell, Lenovo, Quanta, Wistron... or even Apple (Macbook sales were also impacted by iPad). If you dared to purchase more than 200K pcs of 18650 cells in one order, you could get a perfect price with great quality, because many of them were manufactured by Samsung, LG Chemical and other oligopoly suppliers. In 2013, the size of Laptop’s batteries cell had already been slim. It could be applied on powerbank.
Xiaomi smelled a big opportunity from this. In the second half of 2013, Xiaomi purchased tons of 18650 cells from Samsung and LG Chemical at Lenovo’s quotation. The retail price of 10,000mAh powerbank was around $24~$40 (150rmb~250rmb). In December, 2013, Xiaomi launched its first MI powerbank, which was metal case, sleek design and using big brand's battery cell, but only sold you for $11 (69rmb). The product cost was a little higher than $11, but once they sold for more than 2 million pcs, it will reach the breakeven point. Of course, MI powerbank started making profit in 2014. Now they sell more than 20 million pcs of powerbank per year and become the biggest buyer of battery cells in the world. Now they purchase 15% of worldwide battery cells capacity. We should learn how to transfer the insight into business model!
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