Hans Tung Contributor Hans Tung is a managing partner at GGV Capital . More posts by this contributor Consumer internet startups go mainstream outside of Silicon Valley Beyond Amazon and Alibaba: what’s next for e-commerce? Zara Zhang Contributor Share on Twitter Zara Zhang is an investment analyst with GGV Capital and a blogger about China, tech, and food. On August 16, Xiaomi celebrated the seventh anniversary of the release of its first phone, and the eighth anniversary of MIUI’s launch. As an early investor in Xiaomi in spring 2010 and a former board member of the company, I attended Xiaomi’s IPO in Hong Kong on July 9. I felt nostalgic and grateful, and marveled at how much Xiaomi — which seemed like a crazy idea to many back in January 2010 — has achieved over the past eight years. Xiaomi’s business model is not the easiest to appreciate if you have never tried its products. Its holistic value proposition doesn’t have an easy equivalent in the US. I frequently get asked questions about how the company works and what justifies its valuation for each round over the years. Here’s my take on the five most asked questions: Why is Xiaomi an “Internet company”? Isn’t it just a manufacturer of cheap smartphones with really low margin? At first glance Xiaomi may seem like a hardware company, which traditionally has lower gross margins.
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Thoughts on Xiaomi’s eighth anniversary and inaugural month as a public company