Fortune Article

The Fortune Global 500 – our annual list of the world’s biggest companies – witnessed a power shift this year.

For the first time ever, entrants from China, including Taiwan, outnumber those from the U.S., advancing ahead with 129 to 121. While that’s big news for China at large, evidently it was great news for the list’s youngest Chinese debutant, smartphone maker Xiaomi Corp, which decided to celebrate its ascension by rewarding each of its 20,000 employees with 1,000 company shares.

“I would like to express my utmost appreciation to everyone who works at Xiaomi, and to your family members who have been super supportive. Making the list takes the efforts of all. Therefore, as a token of appreciation, we will be presenting a special gift to our 20,538 co-workers and members of key external teams,” Xiaomi founder and CEO Lei Jun wrote in a letter sent to staff.

At the company’s current share price, the giveaway adds up to a hefty $24.3 million gift basket, or a little over $1,100 per person. Not missing an opportunity for symbolism, Lei Jun explained that the 1,000 shares are actually two gifts of 500 – 500 shares for each employee, and 500 to honor each of their families.

Xiaomi listed in Hong Kong just last year, with an IPO that raised $4.72 billion and valued the company at $54 billion. Even though that figure was half the size analysts had expected, still it marked the largest global tech listing since 2014. The smartphone maker was also the first to utilize the Hong Kong Stock Exchange’s new rules, which allow companies to register dual-class shares. The stock Xiaomi is awarding its employees are Class B restricted shares that will vest in one year.

“Young and passionate”

In his letter, Lei Jun noted that Xiaomi is the youngest company on this year’s Global 500. The Beijing-based firm was founded just nine years ago with a team of 13, and is perhaps one of the most striking examples of how China’s tech sector has transitioned from imitation to innovation.

Derided as an iPhone copycat when the company launched its first low-cost smartphone in 2011, Xiaomi has since become the world’s fourth best-selling smartphone by market share, according to Counterpoint Research. In China, Xiaomi holds fourth place also, surpassing Apple, which currently ranks fifth.

In fact, Xiaomi distinguished itself from Apple and other smartphone makers from the outset by shunning offline sales and channelling all retail online. The decision allowed Xiaomi to operate a “flash sales” model – releasing limited batches over short time periods – which served to increase hype for product launches and save costs by cutting overproduction.

However, Xiaomi eventually expanded offline and now has over 1,000 retail points across 250 countries. The Chinese manufacturer has also expanded far beyond smartphones. Xiaomi’s product catalogue features gadgets such as portable power banks, fitness trackers and electric scooters; fashion accessories including backpacks, sunglasses and suitcases; and household items like air purifiers, rice cookers and even smart toilet seats.

Fittingly, Xiaomi was included on the Global 500 under the “Internet Services and Retailing” section. While the sale of its myriad products currently contributes the bulk of Xiaomi’s revenue, CEO Lei Jun is eager to derive more income from services, especially since he pledged profits on hardware will never exceed 5%. But the transition to a service-driven model has yet to materialize and investors are growing impatient. Since its debut last July, Xiaomi’s share price has dropped 50%.

Lei Jun closed his congratulatory letter to employees with a valid point: Fortune’s Global 500 lists companies based on their revenues, not necessarily on their strength. “There is still a lot to be done to make us truly great,” Lei Jun says. Certainly, however, coming so far in nine short years is an impressive start.

Xiaomi ranks 468 on this year’s Global 500. To see the complete list, click here.