As Xiaomi SU7 rapidly enters the electric vehicle market, we witness Lei Jun leading Xiaomi on a development path that differs significantly from other new energy vehicle (NEV) makers.

Unlike other NEV makers that focus solely on vehicle manufacturing, Lei Jun's vision for Xiaomi extends beyond mere car production to creating a holistic ecosystem encompassing people, cars, and homes.

Amidst the fierce competition in the NEV market, Lei Jun's decision to introduce Xiaomi with a 'holistic ecosystem' concept marks a strategic overtaking maneuver.

However, similar to the challenges Xiaomi faced in the smartphone market, the company now encounters similar predicaments in the NEV sector.

Premiumization has always been a haunting nightmare for Xiaomi.

Even today, some still associate Xiaomi with terms like 'assembled', 'low-end', and 'loser'.

Despite years of efforts towards premiumization, including marketing and pricing strategies aimed at enhancing brand value, Xiaomi's journey has not been smooth.

Whether in smartphones or electric vehicles, Xiaomi's premiumization efforts have yet to yield significant success.

I

Summarizing Xiaomi's premiumization failures, one direct manifestation is substituting product premiumization with marketing and pricing strategies.

In the smartphone market, Xiaomi has already launched phones priced at over RMB 10,000.

Similarly, the Xiaomi SU7 ultra is priced at a staggering price of over RMB 800,000 in the NEV market.

From a pricing perspective, Xiaomi seems to have reached the same level as its competitors.

However, delving deeper into Xiaomi's products reveals that its so-called premiumization is more about marketing than actual product and service quality.

For instance, hidden advertisements in Xiaomi phones have become a nightmare for many users.

Not only do Xiaomi phones constantly push ads, but they also download apps without user consent, highlighting their low-end nature.

I recently purchased a Redmi 13 phone, which initially seemed normal.

However, with deeper use, I found it constantly pushing ads and downloading unknown apps without permission.

Trying to disable ad reception proved difficult, as there was no clear option for it.

Although this phone isn't Xiaomi's top-end model, its specifications are high, making it relatively expensive.

Despite its high price, this Xiaomi phone offered an experience far from premium.

Thus, Xiaomi's premiumization efforts may merely be superficial, focused more on marketing than genuine product and service enhancements.

If Xiaomi fails to address this issue, no matter how much it invests in R&D or innovates in design and technology, such investments will be futile.

The user experience remains unchanged, with Xiaomi phones offering the same experience as before.

This suggests that Xiaomi's premiumization may merely mislead users and consumers rather than genuinely improving their experience.

Consequently, Xiaomi's premiumization remains superficial, failing to alter the long-held perception of its products as assembled and low-end.

II

If Xiaomi's smartphone premiumization is merely a marketing gimmick, its efforts in the NEV sector seem even more so.

This is evident in the Xiaomi SU7 ultra.

According to Xiaomi's official introduction, the SU7 ultra excels in various aspects.

However, consumers prioritize the superior experience that Xiaomi cars can offer rather than just the premium pricing.

This is why the Xiaomi SU7 ultra immediately reminded me of HiPhi cars.

Pursuing premiumization solely for marketing purposes, without addressing real-world commercial and user experiences, will not withstand market scrutiny, regardless of pricing or marketing tactics.

While the Xiaomi SU7 ultra may aim to establish a benchmark for Xiaomi cars, distinguishing them from competitors, this approach, while enhancing brand perception, may not be wise in the current NEV market undergoing significant changes.

Rather than rushing to prove its premium status with the SU7 ultra, Xiaomi should focus on product serialization and tiering, achieving premiumization through iterative product upgrades.

If Xiaomi's approach to premiumization in both smartphones and cars remains superficial, it risks falling into the same predicament as its smartphones.

Namely, Xiaomi's premiumization efforts are one-sided and may not align with user needs or perceptions.

When this becomes the main theme of Xiaomi's premiumization, it may not only fail to drive positive change but also damage the brand.

III

Whether in smartphones or electric vehicles, Xiaomi's premiumization efforts appear more like a marketing tactic than a genuine product enhancement.

This superficial approach not only fails to break stereotypes but may plunge Xiaomi into greater difficulties.

So, what kind of premiumization dilemma might Xiaomi face?

In my view, it mainly includes the following aspects:

Firstly, Xiaomi's heavy R&D investments have yet to translate into commercial success.

We know Xiaomi spares no effort in investing in premiumization.

However, if these investments fail to resonate with users and the market, Xiaomi's premiumization becomes a non-commercial endeavor.

Public data shows that since its inception, Xiaomi has continuously increased R&D investments in key technologies, with plans to invest over RMB 100 billion over the next five years alone.

This substantial investment underscores Xiaomi's commitment to premiumization, but if it doesn't translate into improved products and experiences that users value, such efforts will lead to isolation.

Secondly, Xiaomi's premiumization struggles to withstand marketing pressures.

Another reason for Xiaomi's premiumization stalemate is that it has become a marketing tool rather than an independent entity, leading to a low-quality premiumization that deviates from its true essence.

If Xiaomi's premiumization cannot replace marketing as its core value, its journey towards premiumization cannot be deemed successful.

Thirdly, Xiaomi's premiumization lacks a coherent product line.

Successful premiumization is built on a comprehensive product and service hierarchy.

Ultimately, premiumization should be an integral part of a company's products and services, not a disjointed entity.

Unfortunately, Xiaomi's premiumization efforts lack such a hierarchy, with a noticeable gap between its premium and regular products.

This gap not only fails to enhance brand value but also highlights existing product issues.

For example, comparing Xiaomi's high-end phones and SU7 ultra to its regular models reveals a clear disparity.This persistent gap is detrimental to Xiaomi.

Conclusion

By pursuing premiumization for its own sake, Xiaomi has enclosed itself in a self-created cocoon.

For Xiaomi, this premiumization is more about marketing than genuine product and service enhancements, failing to address user and market needs.

As this premiumization shrouds Xiaomi, it lives in a self-created premium atmosphere.

While Xiaomi genuinely invests in premiumization, users fail to perceive any tangible changes.

As Xiaomi's premiumization descends into this self-created cocoon, causing various disconnections, it risks not only failing to ascend but also falling into a self-dug trap.