Analyzing Xiaomi’s Four Major “Crash Factors” – How Overtaking on Curves Exposes the Risks of Chinese Domestic Brands

Xiaomi SU7 (Screenshot from Xiaomi's official website)

[People News] Entering 2025, Xiaomi seems to be teetering on the edge of falling from the pedestal of a “national brand.”

On September 25, following Lei Jun’s annual keynote speech and product launch, Xiaomi’s stock price immediately plunged 8%, evaporating hundreds of billions in market value. The Xiaomi 15 skipped straight to the Xiaomi 17, positioned against Apple’s iPhone 17, which netizens mocked as “the year’s best copycat show.”

At the end of March 2025, a Xiaomi SU7 car accident occurred on the Deshang Expressway in Anhui, killing three female university students. In April, Xiaomi cars were hit by scandals involving “carbon fibre front hoods losing functionality” and hidden battery safety risks. From July to August 2025, Xiaomi faced a wave of car recalls.

One after another, these headwinds were no longer just Lei Jun’s self-indulgent emotional gimmicks, but hard evidence of Xiaomi tumbling from its pedestal. These multiple crises sparked a consumer trust crisis, severely damaging Lei Jun’s personal “IP” image and placing Xiaomi’s corporate strategy and brand reputation under enormous pressure.

Since 2010, Lei Jun and Xiaomi have gone through grassroots entrepreneurship, the rise of fan-based marketing, building an ecosystem, IPO expansion, and the push to go high-end. They became a tech giant valued at over USD 100 billion, with annual revenues exceeding RMB 300 billion and more than 500 million global users.

Now, Xiaomi has fallen from brand glory into a full-chain crisis—moving from traffic dividends to a traffic backlash, from high cost-performance success to Lei Jun’s “benchmarking method.” Netizens roast Lei Jun’s persona: “Before, Lei Jun was an honest man who spoke little. Now, Lei Jun is just an old man who speaks little truth.”

However, as a typical “Chinese element” brand, Xiaomi’s meteoric rise and dramatic fall also expose underlying systemic factors. Its “overtaking on curves” strategy and “get rich overnight” corporate culture highlight structural flaws that nationalist enterprises under the CCP cannot overcome—and brand risks they cannot avoid.

So, what are Xiaomi’s “Four Crash Factors”?

Crash Factor 1: From Copycat Shows to Clout-Chasing Shows – The Anti-Intellectual Marketing of Xiaomi Smartphones

On September 25, Lei Jun defended the jump from Xiaomi 16 to Xiaomi 17 in his annual speech, saying, “It’s explosive. Compared with the entire iPhone 17 series, the Xiaomi 17 surpasses it in many aspects.”

What actually exploded were the fans’ emotions: “Bought a Xiaomi once, never again.” “Always copying—naked plagiarism. You’re nothing but the king of copycats.” “The scammer is too deep in character.” “Battery and processor upgrades—this is what you call a ‘leap’? What a shameless boast. Just admit you’re leeching Apple.” “No real change. Xiaomi lost the plot.” “Where did that self-developed chip you promised go?”

Industry insiders noted that the Xiaomi 17 is just a pile-up of hardware materials. The chip is still Qualcomm Snapdragon, not Xiaomi’s hyped “in-house chip.” In terms of chip efficiency, system ecosystem, brand influence, and software experience, Xiaomi still lags far behind Apple.

Market response confirmed this: the Xiaomi 17 is stuck in sluggish sales.

Xiaomi’s official line claimed that on September 27, the Xiaomi 17 series set new records in first-day sales and revenue across all domestic smartphone price ranges within five minutes of launch. But Xiaomi refused to release actual numbers. On October 1, President Lu Weibing said the holiday sales were “very good,” again without specifics.

On September 29, TF International Securities analyst Ming-Chi Kuo wrote: “Industry surveys show that Xiaomi 17 shipments will drop sharply by about 20%, down from the original 10 million unit target. Without better pricing or marketing, the 17 series may even ship fewer than the Xiaomi 15’s ~8 million units. The standard model is underperforming the most, accounting for only 15–20% of sales, compared with the expected 50–55%. The key reason is that Apple’s iPhone 17 standard model is selling stronger than expected in China, directly KO’ing Xiaomi 17.”

Xiaomi phones originally rose by dominating the low-end market with high cost-performance. But netizens have noticed that for years, Xiaomi’s prices have risen much faster than Apple’s.

Xiaomi’s annual price hikes have exceeded 10%: Xiaomi 6 rose 15%. Xiaomi 8 rose 17.4%. Xiaomi 9 rose 11.1%. In 2020, the Xiaomi 10 entered the high-end market with a jump of over 30% year-on-year. Prices stayed high for three years. By 2024, the Xiaomi 15 starting price was raised by another 12.5% to RMB 4,499. The Xiaomi 17 Pro Max is priced at RMB 5,999.

Apple’s price increases were far smaller. For example, when the Xiaomi 6 rose 15% in 2017, the iPhone 8 rose only 9.3%. Apple kept a relatively stable pricing rhythm from iPhone 7 to 11. The iPhone 12 rose due to 5G and display changes, but the iPhone 13 actually dropped from RMB 6,299 to 5,999.

Now, the gap between Xiaomi and Apple has shrunk dramatically: the iPhone standard model starts at RMB 5,999, while Xiaomi starts at RMB 4,499—a difference of just RMB 1,500. Back in 2011, the iPhone 4S at RMB 4,988 cost nearly RMB 3,000 more than the Xiaomi 1 at RMB 1,999.

Today, Xiaomi’s so-called “cost-performance” is just a marketing gimmick.

Crash Factor 2: The Trust Crisis of the Xiaomi Car Era

In China, businessmen always want to get rich overnight—eating from one bowl while staring at the pot. In 2014, Lei Jun proposed the “Xiaomi Ecosystem” strategy, investing in products like the Mi Band, air purifiers, routers, and expanding into TVs, laptops, and robotic vacuums. By 2019, Xiaomi went public. In 2021, Xiaomi announced a USD 10 billion investment to enter the electric vehicle market.

If smartphones fail in quality, the worst consequence is poor user experience. But if cars fail in quality, lives are at stake. When Xiaomi declared its entry into the car era, it simultaneously stepped into the “era of trust crisis.”

Xiaomi’s trust problems erupted intensively during this period, and misfortunes came one after another.

First, frequent safety accidents: On March 29, 2025, a standard-edition Xiaomi SU7 suffered a serious crash on an expressway in Anhui. The vehicle caught fire, and three female university students inside were killed. The accident involved failures in the autonomous driving system, raising public doubts about Xiaomi’s NOA system and the flammability risks of its lithium batteries. On April 5, in the early hours, another standard-edition SU7 collided with an electric scooter in Xuwen County, Zhanjiang, Guangdong. The two riders were killed, and the Xiaomi SU7 burst into flames. This incident further damaged Xiaomi’s reputation.

Second, delivery chaos: In March 2025, due to insufficient production capacity, Xiaomi SU7 deliveries were delayed. The Xiaomi Auto app showed that after paying a deposit, customers typically had to wait half a year to get their car. In August, another scandal erupted: customers were required to pay the remaining balance within 30 days even before their cars were delivered—otherwise their RMB 20,000 deposits would not be refunded. Many would-be buyers formed rights-protection groups demanding refunds.

Third, false advertising controversies: In April 2025, the Xiaomi SU7 Ultra faced backlash over its hood. Xiaomi had advertised a “carbon fibre front hood” worth RMB 42,000, but online testers found it was merely decorative and functionally no different from an ordinary aluminium hood. Xiaomi fumbled with vague explanations, sparking widespread user complaints and lawsuits.

Fourth, recall scandal: 117,000 Xiaomi SU7 vehicles produced before August 30, 2025, were placed under “investigative recall” by the State Administration for Market Regulation due to safety risks in their driver-assistance systems. Xiaomi, however, did not disclose the true reason to consumers, instead claiming the recall was for an OTA upgrade, covering up that it was a forced recall. This further eroded trust, with social media mocking Xiaomi for its “insincere passive recall” and “celebrating funerals as happy events.” On Douyin, over 65% of related comments were negative.

Crash Factor 3: “Big Words, Small Print” Advertising Hurts Public Sentiment

According to 2025 data from Tencent News, NetEase, Douyin, and Sina, the Xiaomi Auto recall scandal and the Xiaomi 17 launch became the year’s hottest brand-crisis topics.

In addition, Xiaomi’s signature “Big Words, Small Print” advertising also fueled fan disillusionment and consumer backlash.  Several examples triggered heated debate.

The Xiaomi 17 Pro poster: in large characters, “King of Backlight Photography,” but in tiny letters at the bottom, “This is the product design goal.” Netizens mocked this with memes: in big words, “My annual salary is 10 million,” in small print, “aspirational goal in my next life.”

Similarly, Xiaomi Auto once advertised that “Urban Assisted Navigation has begun rolling out,” but in fine print added “only available to some users.” Xiaomi charging stations were promoted with “lifetime free data packages,” but the small print clarified that the “product life cycle is 8 years.” Such tactics have been criticised as marketing schemes that grab attention with big bold claims while dodging responsibility with fine print.

Consumers are generally dissatisfied with Xiaomi’s “big words for attraction, small words for disclaimers” style of advertising. This type of marketing is referred to in the industry as “Xiaomi-style qualifier marketing.” It exploits the brain’s tendency to form first impressions, deliberately hides key information in consumers’ visual blind spots, induces impulsive purchases, undermines market fairness, and skirts legal risks through grey-area practices.

Crash Factor 4: Emotional Manipulation and “Stability Maintenance”-Style Crisis PR

When faced with legitimate consumer demands and public criticism, Xiaomi did not actively respond with sincere apologies or reflection. Instead, it adopted the CCP’s propaganda and “stability maintenance” playbook in dealing with the public.

Lei Jun repeatedly claimed that Xiaomi Auto was “one of the most viciously slandered car companies on the internet,” calling Xiaomi a “victim,” and urging society to unite against “black PR.” Netizens, however, saw this as evasion of product quality and service issues, accusing Lei Jun of hiding flaws behind “public opinion stability maintenance.”

In September 2025, Lei Jun posted on social media about the “great pressure” of “supporting two kids in college at the same time.” Many netizens interpreted this as emotional marketing—using personal hardship narratives to win sympathy for Xiaomi’s business struggles. They criticised it as “emotional hype,” expressing confusion and disgust.

In his 2025 annual keynote, Lei Jun said he “works 16 hours a day” and is “the most viciously attacked,” portraying himself as a hardworking, suffering founder. Netizens mocked this as “self-consolation,” pointing out that he ignored what consumers really care about—product quality and user experience. At the same time, reports surfaced about Xiaomi’s harsh work culture (average daily working hours over 11.5). Lei Jun’s rhetoric of “aesthetics of hardship” was seen as a distraction tactic to cover up labour-rights violations, drawing employee dissatisfaction and social concern.

Like many other Chinese domestic brands, when Xiaomi faces persistent consumer complaints, its usual approach is to call in police to suppress protests—combining gag orders with heavy-handed tactics, a “dual-track stability maintenance” PR model.

Xiaomi Faces Data-Security Accusations – Overtaking on Curves Becomes the Fatal Flaw of Chinese Brands

Behind Xiaomi’s crisis lies a typical trajectory of so-called “national industries” under the CCP: benefiting from government protection and financing, copying Western technologies at low cost, and seeking to “overtake on curves” to achieve rapid catch-up and leapfrog development. From Apple’s hardware specs and design language to Lei Jun’s strategy of benchmarking against Apple, Porsche, and Tesla, Xiaomi reflects a short-termist, opportunistic model of trying to “get something for nothing.”

Moreover, behind virtually all CCP-backed domestic brands lurk state-sanctioned privacy risks. Like Huawei, Xiaomi has been accused of data harvesting, spyware, and serving the CCP’s military-industrial complex.

In summary: In 2025, Lei Jun and Xiaomi were hit one after another with car safety accidents, product recalls, copycat controversies, and consumer trust crises. None of this was accidental. Social media sentiment has become the truest scorecard for China’s “national industries.” State support, cheap imitation, lack of innovation, inflated branding, product crashes, PR suppression—the inevitable outcome of this “overtaking on curves” model is a cycle of accidents and crises. This is a structural obstacle and tragedy rooted in the CCP system.

(First published by People News) △