What makes Xiaomi India’s #1 in Mobiles

Hello everyone,

A quick read. Xiaomi (Pronounced “shaowmi“, FYI) took the tech market by storm when it rose to the limelight a couple of years ago, and more recently, the Indian market too. Such a rapid rise, especially for a Chinese company the world usually stereotypes for being cheap! They must certainly be doing something right. Xiaomi’s unique business model is one for the History books, and here, I attempt to unravel the Xiaomi mystery. To determine the secret sauce. To uncover it’s market dominance strategies. To…you get the idea.

The following points, more than any others, am sure contribute the most to Xiaomi’s success – not just in India, mind you.

1. High quality – low price.

We can talk for days about how Xiaomi is really clever with its marketing and business strategies, how it gets it’s loyal fan base to advertise for them, blah blah blah. But the bottom line is, Xiaomi is at the top because, frankly, it is the best. They lower the ‘premium’, and provide high-quality tech for low prices. And no amount of business shrewdness can beat legit quality!

Xiaomi are really specific in their goals. They target the 10-15k price range in India and stick to their strengths. They don’t go around like headless chickens (Yeah, Samsung) releasing a ton of phones with little variance in the same price bracket. Xiaomi’s strategy is quite simple in this regard – they release only 4,5 phones per year, but make sure that they are the best! No fuss, no drama – just quality products, which is tough to beat.

2. Innovation.

Xiaomi back up their quality products with continuous innovation – right from their own Operating systems, to their advertising scheme. In the dog-eat-dog world of Tech with rapid changes, Xiaomi’s innovation is a fresh breath of air. Granted, a majority of their features are copied (‘inspired’ is the official word) from other companies. But I’ve got to hand it over to Xiaomi for copying the best of features! At any point of time, Mi mobiles have the best list of features currently available in the market. Also, the frequent updates keep the fans satisfied.

3. Advertising strategy.

This is where Xiaomi has really made a huge difference! They spend little on advertising and use the money saved on improving their quality. They rely on word of mouth and social media hype to advertise their products for them! Xiaomi really makes the right use of social media. With frequent updates on social media, they manage to stay in the ‘buzz’ constantly. Also, if you notice their forums, they provide lots of incentives to fans for how-to’s, photography, contests, attending Mi-meets, etc. They manage to advertise better than most companies for a fraction of the cost they spend! Hugo Barra would kill at Clash of Clans!

4. Loyal fan base.

Another important attribute contributing to Xiaomi’s rapid success has got to be their loyal fan base. One, as part of their advertising strategy, they have their fans advertise for them. Two, I’m sure a loyal fan base goes a long way in selling a Chinese phone in a foreign market. I’m certain a quick internet search, or a glance through the Mi forums, will only improve your opinion about Xiaomi. To their credit, they do work hard to keep their fans engaged.

5. Flash sales.

Xiaomi is the first to mainstream the concept of flash sales. More often than not, flash sales are the only way to purchase Mi products in their first 2,3 months from launch. This is another instance of Xiaomi being really clever. Not only are flash sales a great way of selling mobile phones, but they also create a certain amount of artificial hype – which again, goes a long way in the usually underinformed tech crowd. I won’t delve too deep into the psychology behind this, but I am sure the herd mentality is something Xiaomi is benefitting a lot from!

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And now for the customary personal wisdom. From what I have noticed, Xiaomi is real ambitious. I’m no market expert, but from what I understand, Xiaomi is currently in their expanding mode right now and will continue to be so for a couple of years. Compared to what they were a few years ago, they are more robust and certainly producing a wider variety of items. I believe they want to follow the footsteps of Apple and be a completely independent end-to-end service provider. There is still time for that. But given Xiaomi’s seamless transition from a start-up to one of the global tech leaders, I would not be surprised if Xiaomi is indeed the next Apple. Not a bit.

Truth be told, they appear a little more subdued and pale in comparison to the 2013-14 Xiaomi when they absolutely had no competition (in India). I believe they are working like crazy behind the scenes and will focus a little more on their actual sales and profit once their expansion is done. I reckon the ‘squeezing’ phase that’ll follow the current phase will be a second-coming of Xiaomi, which will certainly be something to look out for!

And of course, I’m painting too rosy a picture. There is always the other side of the coin. With companies like Lenovo and Asus creeping up on Xiaomi in the Indian market, their work is far from done. Also, with Xiaomi’s rapid business model, their customer service is sub-par at best. If they are to sustain in the long-run, they should really take more care of their customers. Xiaomi is playing a risky game – of absolutely not stopping and just surging ahead at rocket speed. And now that Xiaomi is competing on a global scale, they cannot afford being, uh-um, inspired by other companies as much. Also, with Hugo Barra leaving, they face the tough task of replacing him with a capable leader who is going to maintain Xiaomi’s momentum.

After everything said and done, Xiaomi is really unique in its business and marketing strategies and we ought to give them credits where it’s due. Xiaomi is a real innovator, and they are currently in the top position because they deserve it. They are currently expanding their production capacity in India, and will certainly look to cement their position as number one, in the years to come. Love ’em or hate ’em, Xiaomi is here to stay. Scratch that, Xiaomi is here to rule, and they are a force to be reckoned with!