How Does XiaomiSell Its Phones

ByEngaging

Customers?Snow Jingxue Wang

Sept 30 2015

IN－ CLASS GAME

Phone CPU RAM Camera Screen Price

A 1.4 GhzDual-Core

1GB 8- megapixel 4.7 inch326 PPI

649 (16GB)749 (64GB)

B 2.7 GhzQuad-core

3GB 16- megapixel 5.7 inch432 PPI

750 (32 GB)

C 2.5 GhzQuad- core

3GB 13- megapixel 5.0 inch445 PPI

320 (16 GB)390 (64 GB)

PHONE A PHONE B PHONE C

THE POWER BEHINDHOW DOES XIAOMISELL ITS PHONES BYENGAGING CUSTOMERS?Snow Jingxue WangSept 30, 2015

WHO’S XIAOMI- Fund in 2010 in Beijing, China- Same year, it launched its Android based

firmware (open source) - Its first smartphone was announced in

2011- Now, it’s world’s 4th(3rd) largest phone

maker- Other products: TV, camera, speaker, etc.

http://www.mi.com/en/

http://www.wsj.com/articles/xiaomi-chinas-new-phone-giant-takes-aim-at-world-

1433731461

IPHONE 6 PLUS VS XIAOMI NOTE 4

https://www.youtube.com/watch?v=9n2pTZIEgy8

- In 2014, Xiaomi sold 61 million smartphones - Phone sales increased 227% than 2013- Its total sales increased 135% than 2013

WHAT’S THE MARKETING STRATEGY

Stage 1 Build WOM

Stage 2 “Hunger Marketing”

Stage 3 Expand Product Line + Go Globally

STAGE 1: BUILD WOM- Start with software, not hardware- Develop core users- Build WOM by core users- Build huge community- Get good WOM before first hardware launch- Impress customer by a good product with

low price (half price as iphone)- Charge free for basic services/fuctions, but

charge for added-value service (games)

http://www.antelife.com/xiaomistore.html

TO BE CONTINUED… It’s more a internet company…not a phone maker

“We're actually an Internet company…and we have a lot of apps. We've built the MIUI firmware based on the Android OS and it's a very strong system…The mobile phone itself is only the carrier. Microsoft used to sell Windows in a box with a CD in it. Does that make Microsoft a paper box company? The box and the CD are only the carrier. If people don't understand this, they can't understand what kind of company Xiaomi is.”

TO BE CONTINUED… 5 Things Xiaomi Does to Cultivate Fans

Product Testers

Launches

Codes

Parties

Social Media

STAGE 2: HUNGER MARKETING “Flash Sales” Model (limited quantity of product storage) avoid over production to save cost no physical stores in local market to reduce cost

Create Conversions and Discussions save advertising cost by user generated content and by using social media

STAGE 3: EXPAND PRODUCT CATEGORYHigh cost-effective product

ALSO: GO GLOBALLY

Xiaomi’s international vice president Hugo Barra was leading Xiaomi’s global expansion since joining the company from Google.

In India, Xiaomi managed to sell 1 million phones within 4.5 months of its first launch and now has 4% of the market. 

MARKETING FUNNEL

Heard about Xiaomi + have interests

Purchase Xiaomi products

Community / Fans Parties

Following news/ interactive/ re-purchase

Protect the brand

- A deep emotional connection with the brand

- High levels of active participation

- A long-term relationship

LOYALTY 3.0

1. WOM could hurt reputation.(Need more brand monitoring and customer service force)

2. No physical stores in local market.(Build more physical stores)

SOME PROBLEMS….

3. Lack of real innovation. (Avoid copycat, have more distinguish design, and keep working on innovating)

TO BE CONTINUED… Copycat Apple

Xiaomi’s CEO Mr. Lei quickly dubbed "China's Apple" and "China's Steve Jobs"

But Xiaomi’s CEO was not happy with this……

CONCLUSIONXiaomi’s fast growing was benefit from its cost-effective products and huge fan-base communities. The Internet and social media accelerated the power of word-of-mouth and dramatically reduced Xiaomi’s marketing costs. Same as other Chinese tech startups, Xiaomi is lacking of innovation. Also, its product profit margin is low.

But Xiaomi is working hard to bring customers more affordable high quality product with real innovation.

QUESTIONS & THOUGHTS ?

SOURCEhttp://blogs.wsj.com/briefly/2015/04/06/5-things-xiaomi-does-to-cultivate-fans/

http://www.computerworld.com/article/2915584/smartphones/xiaomi-tries-to-curb-hungry-marketing-of-its-phones-amid-complaints.html

http://graphics.wsj.com/billion-dollar-club/

http://www.businessinsider.com/ceo-of-chinas-apple-xiaomi-lei-jun-2013-8

https://rahulnischalblog.wordpress.com/