The company ensured customer satisfaction by incorporating user feedback to make frequent software and features updates. As a result, Xiaomi created a sticky fan base, known as “Mi-fans.”

However, it didn’t take long before Xiaomi’s sales began to slow down. Its sales dropped by 5 percent in Q1 of 2016 and 38 percent in Q2 of the same year.

It also fell out of the global top 5 brands in terms of smartphone sales. So what exactly happened?

This one had lots of potential.

Xiaomi needs to re-examine its strategy with a flexible mindset in order to avoid further market decline or even death.

A race to the bottom seldom lets one out alive.