In Xiaomi Group's premiumization strategy, the launch of SU7 Ultra is undoubtedly a bold attempt. With a pre-sale price of 814,900 yuan, this new model not only symbolizes Xiaomi's investment in technological innovation, but also carries the Xiaomi brand's desire for the high-end market. However, can such positioning really win the favor of high-end consumers? China Exportsemi will try to analyze Xiaomi's high-end strategy, and at the same time, we must also think calmly about what challenges and opportunities this company, which has always been known for its "cost performance", when trying to break through the established image of the brand.
1. Xiaomi's brand genes and high-end attempts
Since its establishment, Xiaomi has won the favor of consumers with the concept of "touching people's hearts and fair prices", especially those who value cost-effectiveness. For Xiaomi, which aimed at the mass market from the beginning, this "dick silk economy" gene is deeply rooted in the hearts of the people, allowing it to quickly occupy the market. Relying on low-priced, cost-effective products, Xiaomi has achieved remarkable results in the smartphone market. However, it is this "cost-effective" label that constitutes the most difficult mark to erase in the process of its premiumization.
In recent years, Xiaomi has tried to redefine itself by launching high-end mobile phone products and strengthening branding, from the Xiaomi 10 series to the photography features of Leica's collaboration, which are its signature efforts to premiumize. Now, Xiaomi has further extended into the high-end car market, trying to hit the high-end again with the release of the SU7 Ultra. It is true that Xiaomi's efforts have shown its determination to "go high-end", but it still faces a daunting challenge: how to redefine the brand in the transformation process, so that "cost-effective" and "high-end" coexist in user perception? At this stage, the SU7 Ultra's 814,900 yuan price has caused a lot of waves in the market, but whether the positioning of the high-end market is in line with Xiaomi's brand image still needs to be further observed.
Figure: The 814,900 SU7 Ultra is open for pre-sale, can Xiaomi succeed in rushing to the high-end market again?
2. the high investment and pricing challenges behind technological innovation
In recent years, Xiaomi has continuously increased its investment in research and development to promote innovation in core technologies. According to statistics, Xiaomi's R&D investment reached 13 billion yuan in 2021, and it plans to invest another 100 billion yuan in the next five years. This high investment not only demonstrates Xiaomi's technological ambitions, but also provides technical support for its entry into the high-end market. Especially in core areas such as automotive chips and intelligent interconnection, Xiaomi's self-developed chips have laid the foundation for it to build high-end products. However, technology investment alone is not enough, successful premium brands also need consumer buy-in that matches their pricing positioning.
Does the pricing of the SU7 Ultra meet consumer expectations for Xiaomi? This is a question worth pondering. Xiaomi's user base has long been dominated by fans of Xiaomi that focus on cost performance, but the high-end market usually needs deeper brand precipitation. The initial positioning of Xiaomi Auto is to be priced at 210,000 yuan, to attract the mass market by claiming the highlight of "cost performance", but is the price of SU7 Ultra as high as 814,900 yuan competitive, and can it really attract the "rich" group? In the minds of consumers, can Xiaomi be equated with "luxury cars"? This series of problems reveals the disconnect between brand positioning and market perception in the high-end strategy.
3. The change of the target consumer group and the impact of the "rice noodles" foundation
Does Xiaomi's attempt to premiumize mean a radical change in its target user base? Xiaomi has always relied on consumer groups that are willing to pay for "cost performance", and these groups have a strong demand for low-cost, high-performance products. However, in recent years, Xiaomi has made a lot of efforts on the brand in order to attract middle- and high-income consumers. The question is, will these early fans of Xiaomi turn to pay for the expensive SU7 Ultra, or will Xiaomi be able to meet their needs for upgrading consumption as the economic situation of these not so rich fans of Xiaomi improves?
From the perspective of brand genes, Xiaomi wants to attract a new group in the luxury market, but the transformation of brand perception is far more difficult to achieve than technological breakthroughs. Consumers in the high-end market are more inclined to pay for the brand's historical heritage and unique value, while Xiaomi has not yet fully formed this value accumulation. Compared with Xiaomi, high-end brands such as Tesla and Porsche not only have advantages in performance, but also have mature brand precipitation. Whether Xiaomi can win the favor of this part of the "rich people", I am afraid it will take time to test.
4．the advantages of the IoT ecological chain under competitive pressure
Xiaomi's accumulation in the field of smart home and IoT ecological chain is another advantage for it to move towards the high-end market. As of 2023, Xiaomi has formed the world's largest consumer-grade IoT platform, which provides good technical support for its high-end exploration. Xiaomi's IoT devices are located all over the world, providing a full range of linkage experiences such as smart homes and home appliances. This layout of the whole ecological chain has injected a non-negligible competitiveness into the high-end market. In the smart car market, where the integrity of the ecosystem is closely related to the user experience, Xiaomi can create a more competitive connected experience for high-end automotive products with the advantages of its IoT platform.
However, it is still doubtful whether the advantages of the ecological chain can be transformed into the core competitiveness of high-end brands. Users in the high-end market not only pay attention to technological innovation, but also value the uniqueness and refinement of the brand. Compared to high-end brands such as Apple and Tesla, which focus on design details and provide unique user experiences, can Xiaomi's ecosystem become a key selling point to attract high-end consumers? If Xiaomi can effectively integrate the IoT ecosystem and bring users a full-scene intelligent experience, this may become an important part of its competition for the high-end market.
5. Editor's views and market outlook
From Xiaobian's personal point of view, Xiaomi's high-end strategy does have bright spots, but it also faces huge challenges. Although Xiaomi has ambitions in the high-end market, it is not easy to transform into a high-end brand. Xiaomi's success has always been inseparable from the cost-effective route, and whether it is appropriate to push up the price of the product depends on whether the market can really pay for it. The price of up to 814,900 yuan is not cheap in the high-end market, is this positioning reliable? Or will Xiaomi's consumers pay for such a luxury car? In my opinion, if Xiaomi wants to gain a firm foothold in the luxury market, it first needs to reshape its brand genes, get rid of the inherent image of "cost performance", and find a new label that meets the needs of the high-end market.
Summary
The launch of the SU7 Ultra is indeed an important step for Xiaomi to hit the high-end market, but whether this effort will finally work needs to be further verified by the market. Xiaomi has shown strong strength in technological innovation, ecological chain and market layout, but it is still very difficult to transform the brand gene. To truly win the recognition of the high-end market, Xiaomi must not only have technology, but also need to further shape the brand value, so that consumers can form a perception of "high-end Xiaomi" in their minds. In the future, if Xiaomi can balance the contradiction between cost performance and high-end positioning, and gradually accumulate brand precipitation, then its high-end road may have a bright future. But at present, whether Xiaomi can win the favor of the high-end market remains to be tested by the market.
