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The Chinese player, which has led the Indian smartphone market for three
consecutive years, has a whopping 26% of market share as of Q1 of 2021,
compared to the 20% market share captured by its long-rival, Samsung. That’s a
steep rise for a company that had just 3% of the market in 2015. All thanks to
the innovative marketing strategy of Xiaomi that stimulated this growth.
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ource
Regulatory filing access by AltInfo showed that Xiaomi posted a profit of Rs
401 crore in FY20 after sustaining Rs 148 crore loss a year earlier. In FY20
Xiaomi India clocked revenue of 38,196 crore which is roughly 13.5% of its
global revenue of 2,82,000 crore.
Fun Fact: It’s a very famous fact that Xiaomi owns Mi and Redmi but do you
know that there is an unknown Chinese company that owns OPPO, VIVO.
OnePlus, Realme- BBK Electronics. If we combine their market share it’s
actually BBK Electronics that rules the Indian smartphone market. What
strategy did BBK Electronics use to rule the Indian smartphone market?
In this article, we will explore the marketing strategies that Xiaomi deployed to get
to the top of the table
The price elasticity of demand is high which means that consumers here are
sensitive to pricing. Smartphones had not been able to reach the masses due to
their high prices before the entry of affordable smartphones. Mr. Manu Kumar
Jain, the CEO of Xiaomi India, identified this as a potential and aimed to make
its foot stronger in the Indian market by targeting people who have been
untouched by the telecom revolution, amidst the explosion of the Internet.
The tech giant’s mission statement, thus, came to be-
“At Xiaomi, we strive to create the highest quality products at the lowest
possible prices to provide people with access to the necessary tools and services
that connect them to the world and, ultimately, their dreams.”
Ever used a smartphone for more than 2 years? I don’t think so.
Over 52% of the smartphone users in India changed their primary smartphones
after at least 2 years of use. 26.9% upgraded their phones within 1-2 years of
use. The primary reason is to own the latest or a better smartphone. Xiaomi
capitalized on this fickle behavior by frequently launching new products with
new features.
The company employed people to manage its social media and online forums.
This team began engaging with the community. Their efforts proved fruitful the
day Xiaomi launched the Mi 3 and the Flipkart website crashed in a matter of
seconds!
Apart from this, Xiaomi also runs a lot of campaigns on social media to promote
its smartphones and made effective use of word-of-mouth advertising.
Another reason for Xiaomi’s success was the slow collapse of India’s home-
grown mobile brands due to the lack of 4G capability. There was a time when
we saw Indian players like Micromax leading the market, but things took a
drastic turn around 2016-17 when 4G was introduced in India.
By the time 4G had arrived in India, Chinese companies had already managed to
successfully outfit cheap phones with 4G technology and were selling them
back home! This made it easier for Xiaomi to transition phones from 3G to 4G
overnight in India, ultimately killing the Indian brands that failed to adapt
quickly.
This way, the company did not have to incur unnecessary capital expenditure
and at the same time, making sure that their products reached the maximum
number of smartphone lovers. A simple, yet effective move!
Creating Scarcity
Xiaomi’s flash sales help it reduce inventory costs and overproduction disasters.
It is an exciting marketing strategy where Xiaomi uses discounts, time limits,
and limited stocks as tactics to fascinate the customers.
While that makes it harder to get your hands on a new Xiaomi device, the
company has managed to spin that into a positive, creating periodic hype as
flash sales of a limited number of devices open up every week. Although the
scarcity of a product results in disappointment, it nevertheless increases the
value of the product by enticing the customers to buy it by invoking a feeling of
FOMO.
Once a flash sale is completed, Xiaomi makes use of the quick sell-out in
further social media postings, to grab more eyeballs. This is known as hunger
marketing. Competitors including OnePlus and Realme have also started using
flash sales.
Hunger marketing is a marketing strategy especially focusing on the emotions
of human beings. Hunger marketing is a psychological strategy that focuses on
the desire of consumers, making them hungry thus having a strong desire to buy
products that other people also want to buy.
This could explain why Xiaomi is testing waters in the premium smartphone
market, with the launch of a new range of phones called the K-20 series.
“A few years ago, the premium market was about three to four percent of the
Indian smartphone market. This has now grown.” Xiaomi India’s director,
Manu Jain, said in an interview with the Hindu newspaper. He also added that
the company had set its sights beyond the affordable smartphone market.
Most recently the Mi 11 series graced this list with much hue and cry. In the
advertisement below you will notice a premium feel. Xiaomi has customized its
marketing strategy and market positioning for the premium market.
Xiaomi will need to keep pushing its limits and continuously evolve its
marketing strategy in India, given that the competition remains fierce and no
company has dominated it for too long.