xiaomi ceo lei jun Fortune

Today, Xiaomi’s chief executive Lei Jun downplayed the company’s failure to hit the 80 million smartphone sales he estimated they would sell in 2015. The prediction was made in March on the heels of an incredible 2014 sales year, and Xiaomi was still moving smartphones like hotcakes well into the second quarter of this year. Now, with only a few weeks left in 2015, the Chinese smartphone manufacturer is coming up short on their mark, and it looks like they aren’t going to hit it in time.

What happened here? Xiaomi was rocking the smartphone market with innovative sales techniques and fiercely competitive prices. The five year old company sold 18.7 million devices in 2013, then exploded to 61.1 million sales in 2014. It would seem like 80 million in 2015 is a reasonable – even modest – projection for this year. They already sold 34.7 million devices by July 2015, so with Singles Day and holiday sales boosts, the figure seemed well within reach even just a few months ago. Where did they go wrong?

It seems like Xiaomi might have been too good at its own job. The Chinese market has been prime real estate to push out low-cost smartphones to first-time buyers over the last five years, but now it looks like they’ve saturated the market. To make matters worse, competitors like Huawei and Lenovo have upped their advertising game. The old boys saw what Xiaomi, the plucky startup company, was doing with their flash sales and viral marketing, and they started copying their techniques.

Nevertheless, Lei Jun says he isn’t worried about the company not hitting their smartphone sales target saying, “What we care about the most is the rate of customer satisfaction.” He also said that he hadn’t really wanted to make an estimate for sales this year, perhaps anticipating this shift in the market. He claims he was “constantly pushed by everyone” to give a figure and seems to have reluctantly come up with the 80 million smartphone mark in spite of the shakier sales landscape of 2015.

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Since China’s smartphone market has slowed down, Xiaomi is now looking to expand their products line to include other electronic gadgets (such as electric scooters) and they are attempting to increase their overseas presence. Lei claims that Xiaomi “needs to return to our original aspiration, to be like a startup. We need to be more persistent in building a good user experience and product.” Lei reiterated that what makes Xiaomi special is that its “entire management principle” is to do away with traditional performance indicators and targets.

In spite of their drooping sales, Xiaomi remains one of the largest smartphone makers in the world, fiercely competing with Samsung, Apple, Huawei, and Lenovo on an increasingly global scale. Whether the young company will have as much success overseas as they’ve had in China remains to be seen, but the future still looks bright for Xiaomi.

Read: Best electric scooters on the market

What do you think of Lei’s take on the situation? Is this just corporate-speak trying to put a positive spin on a bad omen, or is it an earnest portrait of Xiaomi’s ideology? Let us know your thoughts in the comments!

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