"Good morning, Mr. Chen!" Li Wanqiang greeted him with a smile as Chen Yansen entered.
"Mr. Li, sorry to keep you waiting. Should we discuss cooperation first, or take a look around?" Chen Yansen asked cordially.
"Let's settle the game co-promotion first. Mr. Lei is in a meeting and will join us later," Li Wanqiang explained.
"Okay." Chen Yansen nodded.
The group took the elevator directly to the marketing department's floor.
They entered Li Wanqiang's office, where he had his assistant summon an employee in charge of channel liaison. The employee showed Song Yuncheng the revenue-sharing information Xiaomi offered third-party promotion channels.
Xiaomi acted as the publisher. The data sheet listed hundreds of popular games—all negotiated one by one by the marketing department. The revenue share for some games could reach 70%-80% of recharge amounts, and commissions for each registered user brought in ranged from 5 to 12 yuan.
Of course, FoxTao wouldn't get such a high cut, but Li Wanqiang's offer of 40%-50% as a base showed his high regard for FoxTao as a channel.
The settlement cycle was every two weeks—a gesture of sincerity.
Chen Yansen didn't dwell too much on the revenue split. He gave Song Yuncheng a slight nod and sent the electronic contract to the legal department for review. If there were no issues, they would sign it that day.
"The R&D center is upstairs. Shall I show you around, Mr. Chen?" Li Wanqiang suggested.
"Then I'll trouble you, Mr. Li." Chen Yansen smiled and walked with Li Wanqiang toward the elevator.
Song Yuncheng stayed behind to follow up on the subsequent cooperation process.
Ding!
The elevator doors opened.
A several-hundred-square-meter office area appeared before them. Li Wanqiang pointed ahead. "This is the MIUI development team. We update the system weekly based on user feedback."
Chen Yansen only knew a little about development, but he understood that to build a mobile operating system, he needed to know what kind of talent to recruit.
He asked very detailed questions. When Li Wanqiang introduced the core R&D personnel, Chen Yansen pulled one aside and asked which programming languages and system frameworks were required for the work.
He even inquired about the programming languages and development tools they used.
Li Wanqiang looked puzzled. He couldn't understand why Chen Yansen—an entrepreneur running an e-commerce platform—was asking such technical questions.
If Lei Jun had been there, he would have recognized a familiar expression on Chen Yansen's face—the same one Lei Jun had worn when visiting Meizu.
Li Wanqiang thought for a moment, assuming Chen Yansen was just tech-curious, and didn't probe further.
Then he showed him the industrial design sketches for Xiaomi phones, but the available information was limited to appearance, materials, and colors.
At this stage, Xiaomi was still integrating its supply chain. Most core components—screens, processors, batteries—weren't finalized yet, so Chen Yansen could gather only very little.
However, after this exchange, Chen Yansen gained a clear understanding of phone manufacturing: from industrial design, structural design, hardware design, and software development to supply chain management and finally building sales channels—it involved many steps.
Sales were Chen Yansen's forte, so he wasn't too worried.
But Li Wanqiang was more knowledgeable on the technical side. From software to hardware, Chen Yansen listened attentively and took notes.
He concluded that if he wanted to manufacture phones, he truly needed an experienced industry expert to have any chance of success.
Reliable people were needed to manage both product development and procurement for the project to proceed smoothly.
Otherwise, if the supply chain hit problems, the project would fail.
Lei Jun didn't arrive until 11 a.m., accompanied by a thin, bespectacled middle-aged man. Introductions revealed the man was Lin Bin, co-founder of Xiaomi.
The group found a meeting room to sit down and discuss matters in detail.
Midway through, Lei Jun specifically mentioned that after the Xiaomi phone launched, they would hold a brand-exclusive event on FoxTao.
Jun'er seems to lack confidence, Chen Yansen thought to himself, somewhat amused.
After all, within 34 hours of the Xiaomi phone's launch, pre-orders would reach 300,000 units—far exceeding Xiaomi's production capacity at the time.
"Mr. Lei, how about we sign the contract first?" Chen Yansen suggested with a smile.
Selling phones had limited profit margins, but it would boost FoxTao's revenue, greatly aiding the next round of valuation increases.
"But Xiaomi doesn't even have an engineering sample yet," Lei Jun chuckled, feeling warmed by Chen Yansen's enthusiasm.
"It's fine. I trust you, Mr. Lei." Chen Yansen waved a hand, not giving Lei Jun a chance to hesitate.
When Chen Yansen left Xiaomi, he took with him a brand promotion contract worth 10 million yuan—4 million for hard advertising and 6 million for phone commissions. The contract stipulated Xiaomi would provide 100,000 units of inventory within six months.
Lei Jun calculated the ROI would be at least 20%.
This made him feel a little guilty, as if he'd taken advantage of Chen Yansen. When seeing Chen Yansen off, he kept calling him "brother."
If Jun'er can't deliver the goods, I'll use the contract as leverage. I wonder if he'll turn on me then, Chen Yansen thought, squinting as he waved goodbye to Lei Jun.
After the two left, Li Wanqiang suddenly realized something and whispered a reminder, "President Lei, this morning I took Chen Yansen to visit the R&D center. He asked very detailed questions."
"Do you think he can make phones?" Lei Jun retorted, not taking it seriously at all.
The phone industry was very different from e-commerce. Phones were asset-heavy and technology-intensive, while e-commerce was an asset-light model.
Just the industrial design and supply chain integration for phones usually took a year.
Chen Yansen, an outsider, had neither technical expertise nor supply chain resources. Let alone making smartphones, even producing a knock-off phone with flashing lights would be extremely difficult.
In 2011, the domestic phone market was an era where knock-off phones and branded phones coexisted.
Chen Yansen recalled brands like Tianyu, Bird, Newman, Dakele, Daboluo, and Duowei. Even the legendary singer Jacky Cheung had endorsed a domestic phone called Gaoxinqi.
Yet very few ultimately succeeded; most perished in the annals of time, fading into obscurity.
Sitting in his car, Chen Yansen pondered Xiaomi's path to success. Unlike other phone manufacturers, Lei Jun never intended to profit from hardware.
He focused on three key areas: pre-installed apps on new phones, an app store, and game partnerships—making money from the software side.
For example, each pre-installed app cost 0.5–2 yuan; installing dozens of apps on a phone could earn 20–50 yuan.
The advertising and revenue sharing from the app store were equally substantial.
Game partnerships were even more lucrative, with some games taking a 70%–80% cut.
A smartphone priced at 2,000 yuan, assuming a three-year lifespan, could generate over 200 yuan in software revenue alone—much easier than hardware profits.
After all, if a phone was overpriced, users would notice when they bought it.
"Too bad—I don't have the money!"
After thinking for a long time, Chen Yansen sighed and muttered to himself with self-deprecation.