Xiaomi Ecosystem Overhaul: SAN Classification Strategy Reshapes Partnership Model
Strategic Restructuring Overview
Xiaomi’s Ecosystem Department has initiated its most significant operational reform in a decade, implementing the “SAN Classification Management Strategy” to streamline operations and drive innovation. This six-month restructuring campaign, spearheaded by William Lu – Xiaomi Partner and Group President – redefines collaboration frameworks across 200+ ecosystem partners.
SAN Classification Framework
| Tier | Market Scale (RMB) | Core Categories | Management Approach |
| S-Class | 5-10B+ | Smart Speakers, Routers, Smart Locks, Cameras | Full-stack control via proprietary solutions + OEM partnerships |
| A-Class | 1-5B | Air Fryers, Rice Cookers, Water Purifiers | Maintain existing collaboration models |
| N-Class | <1B | Drinkware, Luggage, Stationery | Exclusive category partnerships with performance contracts |
Operational Transformations
1. S-Class Strategic Focus
Deep integration with MIUI ecosystem (data entry points control)
80% R&D in-house + 20% ecosystem partner collaboration
Implementing “Xiaomi Standard” certification for manufacturing
2. N-Class Empowerment Model
Revived exclusive licensing agreements (dormant since 2019)
Mandatory partner commitments:
15%+ annual R&D budget growth
20%+ marketing spend increase
Smart manufacturing adoption (70%+ automation rate)
Performance-based 1-3 year contracts with exit clauses
Strategic Outcomes
Resource Optimization
40% reduction in intra-category competition
25% increase in S-Class R&D allocation
Ecosystem Evolution
100+ N-Class partners undergoing capability screening
30% expected consolidation in drinkware/luggage categories
Financial Targets
S-Class: 45% gross margin maintenance
N-Class: 15-20% ROI improvement through scale effects
Historical Context
Since 2013, Xiaomi’s ecosystem model has:
Cultivated 4 unicorn companies
Achieved 62% CAGR in non-smartphone revenue
Maintained 18% average stake ROI across 150+ investments
Forward Outlook
Phase II reforms targeting automotive ecosystem integration (2025)
Planned IoT data monetization platform leveraging S-Class devices
Ecosystem IPO pipeline development (3 candidates identified)
Xiaomi’s ecological chain is the company’s most successful model innovation outside of the mobile phone business. In the past decade, it has not only supported the company’s larger revenue, but also contributed a considerable return on investment.
However, with the scale development of ecological chain companies and Xiaomi’s greater pursuit of revenue and profit after its listing, people are increasingly looking forward to its subsequent development.
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