MIC noted that as Xiaomi's leadership in China is not yet well-established, the company has to carry out business transformation in order to stay competitive.

"For now, Xiaomi is trying to change their 'hunger marketing' strategy and the image this strategy has created.” explains Aaron Lin, industry analyst with MIC.

“ To do so, the company is returning to the traditional process of value chain activities: production first, then comes inventory and delivery. They are also working with online e-commerce platforms T-mall, JD.com, and Suning, and increasing the number of offline stores to enhance consumer experience,”

As for product deployment, Xiaomi has launched Xiaomi Note Pro version (at 3,299 RMB or US$503), extending its product lineup into higher-end segment to challenge Apple, Samsung SX, and Huawei PX series.

These strategies aim to reduce the risks of dwindling sales as a result of the hyper competitions in the value line segment of the Chinese smartphone market.