Xiaomi is a privately owned Chinese electronics major headquartered in the Haidian district of downtown Beijing. It was founded by Mr. Lei Jun in 2010 and is the world’s fourth largest smartphone producer, designing, developing, and selling smartphones, mobile apps, laptops, and related consumer electronics.
In July 2014, Xiaomi launched its first smartphone, the Mi 3, in India. It was a small press conference with a handful of media in a small hall -- not the usual hotel ballroom where most press conferences happen.
The company entered the market in partnership with Flipkart, India's leading online retailer, using hunger marketing tactics to market its value-for-money smartphones. Interested customers had to register for the sale, and Xiaomi only made available a limited stock of devices that were sold out in a few seconds.
While Xiaomi smartphones mostly got positive reviews, and sold well in a quick timeframe, the company had limited scope and more than one challenge.
The sloppy after-sales support experience and non-availability of spare parts hurt customer experience and brand reputation. There was also an irrational disdain for "made-in-China" products in general.
Also, while the flash sales created hype, it also annoyed a lot of potential customers as well as technology writers who found it awkward to recommend a device that was hard to procure.
Also lack of presence in offline space had become one of the determinants for Xiaomi's slowing growth as its e-commerce driven business model has hit a ceiling. Even in China, Vivo and OPPO started to edge out Xiaomi as the country's top phone makers.
Yet, business continued to grow for Xiaomi in India. In just two years of doing business in the country, Xiaomi's revenue in India exceeded $1 billion last year.
In October, the company sold a million smartphones in just 18 days as online retailers like Flipkart and Amazon went into overdrive with discounts and promotions for the festive season which typically starts from October before Diwali, the Hindu festival which marks the biggest shopping season in the country, and continues until the end of the year with different festivals celebrated by diverse communities and religions across the country.
India is an extremely important market in Xiaomi's globalization strategy and the company now aims to capture the largest market share in the country within three to five years.
For Xiaomi, globally as well as in India, the business mantra revolves around a strong belief that high-end technology should not necessarily imply “selling one’s kidney” and should be available to consumers of all income categories. According to business gurus, Xiaomi’s continuous focus in the mid-price segment of smartphones with feature-rich and advanced hardware has reaped rich dividends amongst the middle-class Indian populace, where ‘value for money’ is an integral part of the decision-making process while buying a smartphone rather than ‘brand power’. This, coupled with the emergence of a new middle class in the last 10-15 years has been the driving force behind Xiaomi’s exceptional performance in India.
By
Syed Salman
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