How did Xiaomi become India's No 1 selling smartphone within three years?
Updated: Nov 19, 2019
Since the e-commerce boom started in India, none of the device manufacturers like the then market leader Samsung realized the impact online shopping would be bringing on their sales.
The evolution of e-commerce and tech have forever changed the way we do business. Nowhere is the change more evident than in the way we bought mobile phones for ourselves. Till recently buying a mobile phone still required a visit to the nearest retail outlet and paying in cash to get our hands on the gadget but these days all one is required to do- is just go on Flipkart or Amazon and order their desired mobile phone and pay for it in easy EMI’s. The supply chain is so robust now that the mobile phone usually arrives within three days or less.
This combination of e-commerce tech and modern-day supply chain optimization strategies have given rise to a new breed of companies which have ditched traditional methods for a more lean and agile approach. Xiaomi is one such company which has risen from anonymity to becoming the most selling mobile brand in the country in just 3-4 years.
How did Xiaomi do it?
How was it able to put market leaders like Samsung behind?
Knowing what customers wanted:
Xiaomi did extensive research before entering the Indian mobile devices market. They realized early on that the Indian customers are the most intelligent ones they have encountered so far. Mobile devices market especially in India is a very competitive one and becoming the market leader meant achieving that rare balance of great features and drool-worthy prices, which Xiaomi was able to pull off gracefully.
Since the e-commerce boom started in India, none of the device manufacturers like the then market leader Samsung realized the impact online shopping would be bringing on their sales. Brands like Xiaomi on the other hand which had perfected their flash sales model and online retailing in China took those learnings and replicated it for the Indian market with some minor tweaks here and there. This proved to be a very profitable strategy, wherein they were able to maintain competitive prices of their products as there were no warehouse, distributor and retailer costs involved in the supply chain; instead, they relied on the logistic networks of their online selling partners to deliver their products at record speeds. Building these synergistic partnerships were instrumental in making Xiaomi the number one brand in the country.
Nurturing a loyal customer base:
“Having a happy customer is the best marketing strategy”, Marketing gurus swear by this statement. Xiaomi went one step ahead of this to create not only happy but engaged customers who became their raving brand advocates and ambassadors. A lot of companies fail to realize the importance of building a tribe around their brand and products and a few of them who do realize- find it difficult to keep the users engaged on such forums, which gradually turn inactive with no value coming out of them. Xiaomi, on the other hand, has an engaged customer base which routinely provides critical feedback and info on their software and hardware products. This information helps Xiaomi to refine their products and deliver a more wholesome product experience to their users.
Building an ecosystem:
India is seeing a deluge of China-based mobile manufacturers in its market in recent years. With the new brands willing to let go of their margins at the expense of market share the competition is only getting intense. Mobile devices retailing is driven by razor-thin margins and for a manufacturer to compete and sustain for long relying on only mobile devices sale is close to being suicidal. Xiaomi devised a three-prong strategy to take care of this problem wherein mobile devices sales formed the first source of revenues, the subscription services bundled with these devices formed the second and recurring source of revenues and the extended ecosystem of smart devices like tv’s, fitness bands and other smart devices which will make the consumers come back for more and more. This is how you offset your risks of relying on a single source of revenues and keeping the cash flow healthy and steady.
Focus on offline channels:
Xiaomi is a market leader today because of the sales volume it achieved by leveraging exclusively on online shoppers and flash sales models. Now they’ve realized there’s a much more bigger market of customers from rural and semi-urban areas of India and since this customer segment is not so tech savvy; Xiaomi took the bold step of going against the very strategies which made them the market leaders which is of venturing into physical retailing. With a renewed focus on offline retail channel, Xiaomi even set a world record of Launching 500 retail stores across India in a single day. With their plan of introducing other Xiaomi appliances through this route, it seems like India is going to be part of its long-term strategy for many years to come.
Xiaomi is a great example of what a business should strive for and achieve. Within a short span of time, Xiaomi not only overtook the established player in the market but also set an example for the new companies on how to execute on things and also ace in it like a champion. With an aggressive plan to go global and enter the US market, Xiaomi is again rewriting its own playbook of rules to take on this next challenge of entering the market dominated by Apple.
Only time will tell how Xiaomi will be faring in this challenge.
Until then, let us know in the comments what do you like about Xiaomi products and what are the key takeaways from this article.