news

한어Русский языкEnglishFrançaisIndonesianSanskrit日本語DeutschPortuguêsΕλληνικάespañolItalianoSuomalainenLatina

Lei Jun mentioned Zhou Shouzi again and expressed his reluctance to part with him.

On July 19, Lei Jun, the founder of Xiaomi, held his fifth annual speech. In the three-hour speech, Lei Jun mentioned Zhou Shouzi. Lei Jun said in his speech that Zhou Shouzi, as a young executive who had been trained for many years and had high hopes, was hit hard by his resignation.

Yes, it was Zhou Shouzhi who had previously attended the U.S. Congressional hearing as the CEO of TikTok. At that time, this elegant president, who was only 40 years old, faced various difficulties from a group of U.S. congressmen. He debated with the crowd alone, was polite and flawless, and perfectly demonstrated to the strong and arrogant Americans what it means to have both Eastern grace and wisdom.

In 2015, when Zhou Shouzi just joined Xiaomi, Lei Jun commented on him: "He was a successful investor with unique vision and professional financial skills. He discovered the value of Xiaomi in the early days of Xiaomi and led the investment in DST." Four years after joining Xiaomi, Zhou Shouzi became the president of Xiaomi's international department. In 2020, Zhou Shouzi became the youngest group partner of Xiaomi. At that time, Lei Jun had high hopes for Zhou Shouzi, and he joked many times that Zhou Shouzi was "the second most handsome man in Xiaomi", and the most handsome man was of course himself, and he joked that all men who were more handsome than himself were fired.

In March 2021, Zhou Shouzi said he left Xiaomi for family reasons, but on the same day he announced that he would join ByteDance as CFO. Soon he became the CEO of TikTok. In a sense, Zhou Shouzi was also a normal choice for people to move up. Lei Jun's nostalgia and reluctance are still very strong after 3 years and 4 months, which shows that Lei Jun values ​​Zhou Shouzi. Although he did not publicly state that Zhou Shouzi is his future successor, it can be inferred from Lei Jun's high hopes and years of training that Lei Jun may have really trained Zhou Shouzi as his successor.

After Lei Jun's speech, Zhou Shouzi was successfully brought into the spotlight again. It also attracted the attention of the capital market. On the first trading day after Lei Jun's speech, Xiaomi's stock price rose by 4.24% without any major moves or good news, the highest single-day increase in the past month. As of the close of July 22, Xiaomi's latest market value was HK$429.8 billion.

On one side is Lei Jun and on the other side is Zhang Yiming

Lei Jun and Zhang Yiming are both business tycoons, and both are at the top of the Forbes rich list.Lei Jun ranked 14th on the 2024 New Fortune 500 Wealth Creation List with a shareholding value of 102.5 billion yuan. Zhang Yiming's wealth dropped by 8% and his global ranking dropped by 6 places, but he still ranked fourth in China with 245 billion yuan and 40th in the world. Both are super-rich.Zhou Shouzi is indeed outstanding in that he is favored by both Lei Jun and Zhang Yiming.

Zhou Shouzi, 41 years old, is 14 years younger than Lei Jun. He was born in 1983, the same year as Zhang Yiming. He was born in Singapore. His ancestral home is Chaoshan, Guangdong. His mother is an accountant and his father is the owner of a construction company. His family is well-off and he is considered a second-generation rich. But his days as a second-generation rich did not last long. Due to poor management, his father's business faced crises several times, and he experienced a journey from becoming rich overnight to having nothing. At the age of 12, Zhou Shouzi ranked among the top in the Singapore national examination and studied at the Chinese High School, an elite school in Singapore. At the age of 18, Zhou Shouzi interrupted his studies and joined the Singapore Air Force. After two years of service, he was promoted to the rank of captain and retired.

Zhou Shouzi did not stop his studies during his military service. As soon as he was discharged, he was admitted to University College London (UCL) through his own efforts. After graduation, he worked for the well-known investment bank Goldman Sachs for two years. In 2008, Zhou Shouzi studied for a master's degree at Harvard Business School and moved to the United States. After graduating from Harvard Business School, Zhou Shouzi started his own life of cheating and joined the Russian Internet investment giant DSTGlobal, and soon became a partner of DST China.

Around 2010, Chinese Internet companies entered a period of explosive growth. As a partner of DST China, Zhou Shouzi was keenly aware of the huge business opportunities. With his help, Liu Qiangdong and DST Milner completed their first meeting, which officially kicked off the rapid development of JD.com. At that time, DST invested US$500 million and acquired 8.8% of JD.com's shares. Considering the development speed of JD.com, this was a great investment, and Zhou Shouzi became famous in the investment community.

Subsequently, DST spent another $500 million to acquire 7% of Xiaomi’s shares. Even when Zhang Yiming was still working in the residential building of Jinqiu Home, he had already met Zhou Shouzi, who also played an important role in DST’s key investment in ByteDance. In this way, JD.com, Xiaomi, and ByteDance, the three major Internet companies, all have an inseparable relationship with Zhou Shouzi.

With his strong ability and connections, Zhou Shouzi, who was only 32 years old, successfully captured Lei Jun's "heart" and extended an olive branch to him. Zhou Shouzi was also optimistic about Xiaomi and gladly accepted the position of Xiaomi CFO, becoming the youngest executive of Xiaomi. In order to win over Zhou Shouzi, Lei Jun offered him 100 million Xiaomi options. Lei Jun commented on him at the time, saying that he "had a kind of diligence like revenge on the world."

Xiaomi’s road to listing is far more difficult than everyone imagined.In the operator era, Xiaomi faced industry giants such as ZTE, Coolpad, Lenovo, and Huawei. Xiaomi entered the mobile phone market with its unique business model of cost-effectiveness, Internet thinking, and software and hardware integration, but it also attracted a lot of criticism. In 2014, Xiaomi was valued at US$45 billion, becoming the world's largest technology startup at the time. However, it has always been difficult to go public. After Zhou Shouzi joined, he began to manage Xiaomi's listing. During the time of preparing for the listing, Zhou Shouzi was often so busy that he was "dizzy". He recorded every investor he had met in Excel, and finally listed 1,500 lines.

In this way, Zhou Shouzi spent three years and Xiaomi finally successfully went public in Hong Kong in 2018, becoming the first company with unequal voting rights listed on the Hong Kong Stock Exchange. The situation was extremely complicated.Zhou Shouzi successfully solved this problem, and at the same time promoted the rise and global layout of Xiaomi's ecological chain. Xiaomi's international business has expanded to more than 100 countries and regions, making great contributions to Xiaomi's internationalization journey. In 2020, Zhou Shouzi became Xiaomi's youngest group partner.

In March 2021, Zhou Shouzi left Xiaomi and joined ByteDance. Of course, Zhang Yiming did not poach people to weaken Xiaomi, but ByteDance's own development needs. After Zhou Shouzi joined ByteDance, he led the TikTok team to expand its territory in the global market, especially almost occupying the US market. Almost half of Americans have become active users of TikTok, which made the United States love and fear it and began to target it everywhere.

It's not about money nor being wronged.

In theory, Lei Jun has attached great importance to Zhou Shouzi. He has joined the board of directors and has been promoted to partner. He not only has a sky-high annual salary but also has 100 million stock options. He is young and promising in his thirties, and has successfully crushed most of his peers in the world. In September 2021, Zhou Shouzi was selected as one of the 2021 Fortune Global 40 Business Elites Under 40. With fame and wealth, young and rich, the outside world generally believes that if Zhou Shouzi continues to work at Xiaomi, he will be expected to succeed Lei Jun.

Lei Jun must have been reluctant to see Zhou Shouzi leave, but he still sent his blessings. Shortly after Zhou Shouzi joined TikTok, he cleared his Twitter and other social accounts and opened TikTok. In order to expand TikTok's overseas market, Zhou Shouzi changed his previous rigorous work style and made his image more lifelike and acceptable to Westerners. Celebrating Halloween, eating fried chicken and drinking Coke, watching concerts... these have indeed played a certain role in promoting the development of TikTok. With the rapid development of TikTok's international business, in 2022, Zhou Shouzi was selected into the "2022 Forbes China·Global Chinese Elite Top 100" list.

In fact, before Zhou Shouzi joined TikTok, TikTok CEO was the most dangerous job in the industry. Five CEOs were replaced in five years, and the shortest term was only three months.When Zhou Shouzi took over TikTok, the US government was eyeing it covetously. The crisis was temporarily resolved due to Trump's defeat in the election, but the US investigation into TikTok did not really disappear. The former CEO could not withstand the pressure, which led to the famous scene where Zhou Shouzi attended the hearing and debated with many scholars.

At the hearing, lawmakers from both parties asked Zhou Shouzi many questions in an interrogative tone. These questions were arrogant, sharp, extremely misleading and even lacked basic common sense. He was even rudely interrupted countless times with "Just answer 'yes' or 'no'", but Zhou Shouzi still maintained his composure and responded calmly and clearly. This battle made Zhou Shouzi famous in the global Chinese community.

Jack Ma once famously said, "When an executive changes jobs, it's either because he was wronged or because he wasn't paid enough."

At that time, Zhou Shouzi was regarded as a "scarce talent" by Xiaomi and the outside world, and Lei Jun also cheered for him everywhere, so it was not likely that he was wronged.Some people believe that Lei Jun is a more traditional business manager who trains his successor step by step according to procedures, while Zhou Shouzi received Western-style education since childhood and may not be adapted to such a training process.

This can also be seen from the fact that Zhang Yiming let Zhou Shouzi join the company and immediately appointed him as the CEO of TikTok. Zhou Shouzi may be more eager to take on a challenging decision-making management position.

Could Zhou Shouzi's resignation be due to salary issues? Public data shows thatZhou Shouzi's annual salary at Xiaomi is 700 million yuan, while his annual salary at ByteDance is 960 million yuan. This also means that Zhou Shouzi's salary will increase by nearly 40% after switching to ByteDance, which is really hard for most people to refuse. But don't forget that Zhou Shouzi also has 100 million shares of options at Xiaomi, which is difficult to be a decisive factor compared with a salary increase of less than 40%.Zhou Shouzi's wife Gao Weiyan also graduated from Harvard Business School. She is a female business elite, an independent non-executive director of Hong Kong financial company Sun Hung Kai, chairman of the ESG committee, and CEO and head of Tamarind Global. The two have already achieved financial freedom. It can be said that Zhou Shouzi's resignation was not due to salary issues.

Investor Liu Bo believes that if business elites leave their jobs, the biggest possibility is that they want to prove themselves, not because of salary issues: "Zhou Shouzi was only a senior vice president at Xiaomi. Lei Jun liked to do everything himself, so Zhou didn't have much room to play. After joining ByteDance, he quickly became the CEO of TikTok. Compared with Lei Jun, Zhang Yiming likes to delegate power, which may be the key reason for Zhou Shouzi's departure."

Liu Bo also pointed out that it was inappropriate for Lei Jun to talk about Zhou Shouzi in public. For example, it might affect the mentality of Xiaomi's current executives. Compared to missing Zhou Shouzi, Lei Jun's public thanks to Xiaomi's contributor Lu Weibing might better stimulate team morale.

Xiaomi's internationalization still needs Zhou Shouzi's investment

Lei Jun has always emphasized that Xiaomi is a highly international company, but after Zhou Shouzi left, Xiaomi's international business progress has not been smooth.

First, Italy issued a fine of 21.76 million yuan to Xiaomi, and then there was trouble in India.The Indian Enforcement Directorate issued a document on June 9, 2023 stating that Xiaomi was suspected of violating the country's Foreign Exchange Management Act (FEMA) and "illegally transferring funds to foreign entities." The agency has issued formal notices to Xiaomi Technology India Private Limited, Xiaomi India Branch, some senior executives and three banks including Citi.

The consequence of the accusation is that the Indian authorities seized a total of 55.51 billion rupees (about 680 million US dollars, equivalent to nearly 5 billion yuan) from Xiaomi. Public data shows that Xiaomi Group's adjusted net profit in 2022 was 8.5 billion yuan, which means that this amount of money is equivalent to 57% of Xiaomi's net profit in 2022. However, Xiaomi's financial report shows that the net profit attributable to the parent company in 2022 was only 2.474 billion yuan. Whether it was affected by the Indian pitfall, the financial report did not explain accordingly. In 2023, Xiaomi's net profit attributable to the parent company was 17.48 billion yuan, and the cost of the pitfall in India was about 30% of the net profit for the whole year of 2023.

Relevant data shows that Xiaomi's overseas revenue in 2021 reached 163.6 billion yuan, a year-on-year increase of 33.7%, accounting for 49.8% of the total revenue. In 2022, Xiaomi's overseas market revenue was 137.8 billion yuan, accounting for 49.2% of Xiaomi's total revenue. In 2023, Xiaomi's overseas market revenue was 121.8 billion yuan, accounting for 44.9% of the total revenue. For three consecutive years, Xiaomi's overseas market revenue share has not increased but decreased. This shows that Xiaomi's internationalization process is not smooth sailing.

In 2023, Xiaomi's mobile phone revenue was 157.5 billion yuan, a year-on-year decrease of 5.8%, and Xiaomi's global mobile phone shipments decreased by 3.3% year-on-year. In the fourth quarter of 2023, Xiaomi's mobile phone revenue ended the previous seven consecutive quarters of year-on-year decline. In that quarter, Xiaomi's mobile phone revenue accounted for 60.4% of the total revenue, returning to more than 60% after four quarters. But this was achieved by Xiaomi's mobile phone at a price reduction. In 2022, the average selling price of Xiaomi mobile phones in overseas markets was 1,111.3 yuan per unit, while the average selling price per unit in 2023 dropped to 1,081.7 yuan.

A careful analysis of Xiaomi's financial report shows that the growth is due to the promotion of high-end domestic sales, while the decline is due to overseas promotions to clear inventory and increased shipments in emerging markets, which is partially offset by the increase in domestic ASP. This means that the high-end development of Xiaomi mobile phones is not going well in overseas markets. The high-end group mentioned by Lei Jun is still from domestic users, and sales in overseas emerging markets may hardly drive the overall revenue of Xiaomi mobile phones.

Xiaomi's internationalization desperately needs a manager to take the lead, which makes Lei Jun miss Zhou Shouzi, his "right-hand man" who has rich experience in international expansion.

Hugo Barra, a former Google executive, once commented on Zhou Shouzi: "He is better suited to be a dual executive of a Chinese company that wants to become a global giant, with both domestic and overseas interests, than anyone else I have met in the Chinese business community." And how could Lei Jun not see Zhou Shouzi's strengths?

Just as Rene Liu sang in "Later", "Some people are gone once you miss them", Lei Jun's current remembrance of Zhou Shouzi further proves that it is hard for Lei Jun to find another business genius like Zhou Shouzi.

Author|Meng Xiao