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Xiaomi is one of the biggest phone companies in the world, but it’s relatively unknown on these shores.

So what does it do? And how has it been so successful in only three years of selling its own phones?

Let’s run down everything you need to know.

1 It’s massive

xiaomi mi4

It may be relatively unheard of here in the west, but Xiaomi is absolutely huge in its native China.

Market research company Canalys recently named it the world’s sixth-biggest smartphone seller. It also ranked Xiaomi the third-biggest in China, behind Samsung and Lenovo.

It was only formed in 2010, and didn't start making its own phones until a year later. Yet it’s already sold 57.4 million smartphones.

Earlier this month, Samsung – the world’s biggest mobile phone vendor – forecast a drop in profits, and even slashed the pay of its top execs to compensate.

The reason? Increased competition from Xiaomi and other Chinese rivals.

High praise indeed.

2 Its devices are cheap

cheap price pound shop

Xiaomi has been such a success partly because it massively undercuts its rivals. Its latest flagship, the Mi 4, sells for just £189. But it boasts market-leading specs.

It has a 5-inch screen with a higher resolution than the iPhone 5S. On the back is a Sony-made 13-megapixel camera. It’s no slouch on the inside, either.

A 2.5GHz quad-core Qualcomm Snapdragon 801 chip buddies up with 3GB of RAM to offer blisteringly fast performance.

In other words, it’s faster than the Samsung Galaxy S5, but costs a fraction of the price.

The companion Mi Band wristband is also very affordable – it costs just £7.50. That’s about a tenth of most fitness trackers, yet it has all the same skills.

3 It takes a no-frills approach to marketing

golf sale

Xiaomi is able to sell its devices so cheap because it saves money elsewhere. It hardly spends anything on advertising, and it mostly sells its devices online.

Hence, it has no massive marketing budget to offset. Nor does it have all the costs associated with stocking handsets in shops.

Samsung, by contrast, had a marketing budget of $14 billion (£8.5 billion) in 2013. That’s the biggest of any company, ever.

Instead of splurging on advertising, Xiaomi devices are talked about on social media by offering great specs for a low price. They effectively advertise themselves.

Xiaomi has another neat trick up its sleeve too, one which engages the user unlike any other…

4 It lets the users design the UI

xiaomi user interface tablet

That’s right, it lets users suggest changes to improve the UI, and then incorporates the best ones.

This results in a UI that’s updated on a weekly basis, and is constantly getting better.

No other company can lay claim to incorporating user feedback so effectively.

And with millions of users constantly suggesting tweaks, Xiaomi effectively has an army of product testers working for it for free. Very smart.

5 It attracts major talent

hugo barra

If any more proof was needed that Xiaomi is a major player on the mobile scene, it poached a top Google executive last year.

Hugo Barra, former vice president of product management for Google’s Android mobile OS, joined Xiaomi as vice president.

And you don’t leave Google for a company that doesn’t have some serious potential.

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