There is simply reason why Xiaomi Mi5 smartphone is two times cheaper than its competitor Samsung Galaxy S7. But this difference is not only because of lower distribution costs, licencing etc. The Xiaomi smartphones are not waterproof! People complain about this, but this convenience has its price!
Lin Jun, Xiaomi founder, has explained why they did not manufacture waterproof phones. The first reason is that any smartphone damage can deteriorate the protection from water. So, the repair would be more complicated and expensive. However, the main reason is that this feature would increase production costs. Therefore, Xiaomi’s customers would have to be willing pay about 20% – 30% more for flagship smartphones.