The company made that decision a year ago and there are indications it was a good move, Xiaomi's Chief Financial Officer, Chew Shou Zi, told CNBC's "Squawk Box' on Thursday.
"We believe that for this year, our strategic focus is to strengthen our position in the mid and high-tier market," Chew said.
Xiaomi started off by making high-end smartphones at substantially lower price points compared to other device makers. But increasingly, the company has faced intense competition from other low-cost Chinese rivals like OPPO and vivo.
"For this quarter, the reflection of the success of our strategy was an increase in our average selling price by 25 percent of our smartphones in China," Chew said.
He added that the shifting focus, along with expansion into offline channels, will "lay a very good groundwork for growth in 2019 and beyond."
Xiaomi shares rose 1.36 percent on Thursday morning in Hong Kong.