The column section written by AP Group members.

COLUMNIST

APC Product Support &
Consumer Service Team

Rho, Kyung-mo

Episode 1. Part 1.
Is GWP part of corporate culture or strategy?

Is GWP (Great Work Place) part of corporate culture or strategy?

'"I find it astounding how often I hear people complain about the Monday morning blues – about not wanting to go to work when the end of the weekend inevitably arrives. We spend the majority of our time each day at work, so wouldn't our lives be much happier if work became a great place to work? That's what I've found."
– Pang Dong Rai (胖东来) Department Store Cosmetics MD–

Many of you have probably read the news that, "for the 3rd year running, the Internet search giant Google has ranked top of the Fortune 100 Best Companies to Work For." Fortune, the American business magazine, selects and announces the 100 Best Companies to Work For each year and IT companies such as Google and SAS have put in place a strategy of prioritizing employees first. They have enjoyed substantial media coverage for the way that college graduates have flocked to them in droves for work. According to the 2014 College Graduate Employment Report in China, the most preferred industry by college graduates is IT, followed by consumer goods and real estate. Like Korea, China has been suffering from a difficult job market. Hence, people's first consideration is salary. However, interestingly, the second factor was found to be 'a corporate culture that respects individual characteristics.' This time, I would like to introduce two 'companies that are famous for an excellent corporate culture' in China. Today's company is 'Xiaomi(小米).'

1. Xiaomi (小米)

Celebrities have fans. But, would you believe the companies have fans, too? This company's slogan is 'just for fans.' Most employees start as consumers that are excited about the products and, having been captivated by the products, become a fan of the company only to later join as a permanent employee. And this innovative company's name? Xiaomi. Xiaomi is a China born smart phone company that has grown rapidly by thoroughly benchmarking Apple, Amazon, and Google. The company's fame now extends to Korea as well, with Q2 sales in 2014 reaching 14.99 million and a market share of 14%, placing it first, before Samsung, which held a 12.2% market share. The company has continued to attract tremendous popularity among consumers by offering a 24/7 online customer service to sell directly to them via their own webpage. So, where did these astounding results come from in the space of just 3 years since it first jumped into the smart phone manufacturing business?

Canalys

Xiaomi Benchmarking Company

Various sites at Xiaomi headquarters. The slide to move between floors (left), a doghouse for the canine mascot located in the lobby (top right), bungalow-shaped meeting rooms (right center), Xiaomi retail store resembling the Apple Store (right bottom). / Source: Chosun BIZ

Xiaomi first started out in software manufacturing, and 8 out of the 10 founding members are from Google or Microsoft. They have already experienced the open corporate culture of Silicon Valley. What they noticed was that it was precisely this corporate culture which spurs employees to be more productive. It was for this reason that they endeavored to be the first to create an open corporate culture. As a result, a horizontal corporate culture formed in which any employee can freely e-mail or message the CEO, Lei Jun (雷军). The popularity of Xiaomi as a workplace is grown partially because of its growing sales; all the more so because the number of Chinese college students and job-seekers who want to have an experience of working in the open corporate culture of Xiaomi has been increasing steadily.

One of the characteristics of Xiaomi is that customers are always excited whenever new products are announced. Further demonstration of its popularity is shown by the way that customers, who have purchased products, recommend them to others. Xiaomi CEO Lei says these results are purely based on Xiaomi's unique corporate culture.
"All tasks are customer oriented. With this in place, good results follow."

It may seem like a cliché, but Xiaomi's technicians are also encouraged to meet consumers in a retail environment. The company is creating a culture in which these technicians are encouraged to communicate directly with consumers to share their thoughts and reflect this in the product. Based on this type of continuous communication with customers, the company has been able to secure a dominant position with professional consumers aged 18 to 34 who enjoy spending and consumption. The results show that Xiaomi's customers use its APP more than 7% longer than users of the Apple iPhone.

Xiaomi actually experienced a personal information leak within China and received criticism for investing in marketing without having undertaken basic investment in R&D. Yet, through hunger marketing, which offers limited sales with limited stock exclusively on their website and on the mobile messenger WeChat, the company was able to simplify distribution channels, reduce marketing, inventory, and logistics costs. This innovation in itself allowed Xiaomi to then focus on R&D. The company is now recognized for having the most optimized marketing for the Chinese market. Nobody knows whether Xiaomi will continue to grow within the rapidly changing smart phone market or whether it will collapse as the next HTC. Yet, there is at least one major difference with HTC in that Xiaomi has great potential with high quality products, as well as an open corporate culture.
Having entered the India and Singapore markets with mid and low range mobile phones, Xiaomi is now looking at the European market as well. Though Xiaomi is a company of a different industry from ours, they are surely a company we should continue to monitor.

Part 2 will feature China's famous retailer 'Pang Dong Lai (胖东来).'