Xiaomi — a Chinese company that is breaking into various markets with its affordable smartphones. For those who don’t know Xiaomi, it is a consumer electronics company offering high-end as well as affordable products with innovative technology.
The rise of Xiaomi has come to define the new paradigm of consumer electronics in India. A major percentage of the population owns its smartphone and wearables, setting them apart from the mass market.
Xiaomi’s model of business has taken off not only because of its low-cost models and high-quality offerings but also with strategic moves that have reaped success over time. So, what is Xiaomi’s secret sauce? What is the secret behind the marketing strategy of Xiaomi?
The success of the company lies in the seamless integration of products, pricing, and marketing developments.
So in this case study, we will take a deeper look into the marketing strategy of Xiaomi, its marketing mix, and the campaigns that it has undertaken over the years to increase its market share and brand recognition in India and around the world.
Lei Jun founded Xiaomi in 2010, a Chinese electronics business with its headquarters in Beijing. Just behind Apple, Samsung, and Huawei, it is presently one of the top four smartphone makers worldwide.
In 2010, Xiaomi was set up as a start-up with the purpose of producing mobile gadgets and launched an innovative operating software product based on Android called MIUI in the Chinese markets. Today, It designs and manufactures top-of-the-line smartphones, mobile phones, laptops, home appliances, and many other products.
The smartphone entered the Indian subcontinent back in 2014, just three years of its existence, and went on to earn the tag, “India’s No.1 smartphone brand”.
Xiaomi has been a listed entity on the Hong Kong Stock Exchange since 2018 and has various subsidiaries under its name. It was also the youngest company to get featured in the list of Fortune Global 500 in 2019.
What’s new with Xiaomi
- This year, When Redmi 12 5G, a 5G-capable smartphone, was just released, Xiaomi launched a new campaign which is a theme design competition known as the 2023 Xiaomi International Theme Competition which is ongoing from 28th July to 1st November 2023.
- To regain the lost market shares in the last year Xiaomi is betting on 5G phones ranging between 10 thousand to 15 thousand rupees.
- In the world of smart TVs, Mi has been in the race to offer a 65-inch Xiaomi Smart X series smart TV with a new app addition called PatchWall UI which runs on Google support.
- Along with the Xiaomi Pad 6 tablet, Xiaomi also unveiled the Redmi Buds 4 Active wireless earbuds in India. At a cost-effective price of Rs 1,399, these earbuds from TWS offer a dedicated low-latency mode, up to 30 hours of battery life, and support for swift charging.
- At an event, Xiaomi introduced the Smart Air Purifier 4 in India. The Mi Air Purifier 4 is a follow-up to the Mi Air Purifier 3 from 2019, and it has an advanced filter, more room coverage, and a quieter design.
Now that you know about Xiaomi, let us now go through its target market in the coming section.
Target Market and Segmentation Strategy of Xiaomi
Xiaomi’s market positioning is aimed at bridging the gap between the mass market and the high-end segment of the market. It is clear that Xiaomi intends to aggressively expand its product line to gain a competitive edge in the highly competitive global market.
|Target Audience of Xiaomi|
|Poco||Customers with a budget of more than ₹20k|
|MI||Customers with a budget of more than ₹30k|
|Black Shark||A Gaming Smartphone|
|Mi Smart Bands||General Customers|
|Redmi Watch||General Customers|
|Mi Watch||Customers with a budget of more than ₹30k|
|Laptops, Speakers, Earphones, Wi-Fi routers, Powerbanks, and related accessories|
Over the years, it has enhanced its product portfolio and now offers a wide range in not just the smartphone category but also in various other categories.
Below is a buyer persona of Xiaomi:
- Value-for-money tech products.
- Affordable, innovative features.
- Seamless tech integration.
- Latest tech trend awareness.
- Customizable devices.
Interest & Hobbies
- Online trends.
- Marketing, tech conferences.
- Photography, content creation.
- Local art, and cultural events.
- Fitness engagement.
- Work-life balance.
- User-friendly, reliable tech.
- Digital information overload.
- Rapid tech changes.
- Navigating tech options
Social Media Presence
Now that you have an idea of what Xiaomi offers and who it targets, let us now understand more about Xiaomi by going through its marketing mix.
Marketing Mix of Xiaomi
The marketing mix model is a practical way of conceptualizing how you should approach marketing in a business. The framework of this model is based on the parameters of the 4Ps: Product, Price, Place, and Promotion. This framework helps in understanding what a business is offering and how it is offering to its target audience and target market.
So let us know the first 4Ps in the comings section concerning Xiaomi’s offerings.
Product Strategy of Xiaomi
Xiaomi entered the Indian market through aggressive pricing and impressive product offerings but has now found its niche in the sub-continent being first amongst the many to sell smartphones that are feature-packed and priced at the level of entry-level smartphones.
This has led to a lucrative segment of the low-cost smartphone segment having a mass appeal due to Xiaomi’s high offerings at affordable prices.
And now that the company has expanded into other markets, from smartphones to TVs, it’s clear that it has no intention of slowing down its revolution toward dominating the Indian markets.
Other offerings of Xiaomi
Xiaomi’s product strategy is a core part of its business model. It develops smartphones and related products that are consistently at the top of the market and then uses its massive fan base and innovative marketing techniques to sell those phones.
Price Strategy of Xiaomi
The brand’s primary means of product expansion through vigorous price reduction is its basic business plan. By offering inexpensive substitutes for more costly products without sacrificing quality or features, this price approach aims to progressively take market share.
As of 2020, the price of Xiaomi’s smartphone ranges from as low as ₹5,000 to as high as ₹200,000. This affordable pricing strategy has been a crucial pivot for the company, making it India’s no.1 smartphone brand.
Place and Distribution Strategy of Xiaomi
Xiaomi is now present in over 100 countries with an affordable range of smartphones, smart TVs, laptops, wearable and gaming devices. With a global footprint, and great product quality at competitive prices, the company is expanding its reach to various new markets every year.
Most of the sales are done online rather than offline which has also proved to be beneficial for the manufacturer and as well as the consumers. However, it has shifted its primary focus towards expanding into offline markets as well.
With substantial investments in product and technology developments, Xiaomi aims to establish its presence in the lucrative international markets through heavy expansions and gain market share through aggressive pricing tactics and marketing strategies.
Promotion Strategy of Xiaomi
In its starting years, Xiaomi relied very little on marketing. But now, it has shifted to a more active approach in promotional activities as it focuses on key regions like the US and Europe, India as well as China itself.
Xiaomi’s promotion strategy changed dramatically around 2016. The company realized that it needed to expand beyond just selling its products and started focusing specifically on India and China — two countries with large populations but limited disposable income.
Its recent marketing moves come after years of gradually gaining prominence in the mobile phone market through its low-cost phones.
Xiaomi launched a new campaign #ScreenSahiTohSceneSahi that showcases the immersive viewing experience delivered by their product – the Redmi Note 11 Series Super AMOLED display.
The campaign film was released across social media platforms and has been conceptualized by director Anurag Kashyap and features renowned Bollywood actress Vaani Kapoor.
Selling smartphones at affordable prices has helped Xiaomi gain a significant following in countries like China and India previously and now it hopes to expand its influence across the globe through expanded distribution and better marketing tactics.
Now that you are familiar with how Xiaomi has framed the marketing mix model, let us now go through the marketing strategy of Xiaomi in the following sections.
Marketing Strategy of Xiaomi
From the very beginning, Xiaomi has attempted to save its costs by reducing marketing spending. From having almost zero budget for advertising to building a strong fan base, Xiaomi has succeeded in making its marketing extremely unique and personal.
With rising competition in the market as well as changing customer behaviours, the company has started focusing on its marketing efforts by increasing its marketing spending year after year.
With that being said, let us go through the common as well as unique marketing strategy of Xiaomi to maintain its relevance in the market.
Brand Ambassadors of Xiaomi
Brand ambassadors are the voice of your brand, your face, and your ears as well. They’re the ones who get to spread your message to a larger audience that most likely wouldn’t be aware of your brand if it weren’t for them.
Xiaomi India has signed Ranveer Singh as its brand ambassador to promote its products in India. It very recently signed Sonu Sood to promote the Redmi brand of products.
Signing Ranveer Singh is a master move as he’s the A-lister in the Bollywood scene currently and this helps Xiaomi to distinguish itself from its competitors. The signing of Sonu Sood can also be considered a master move given how Sonu Sood has been in the news for a while for his good works during the pandemic.
Redmi has also previously collaborated with Katrina Kaif for the launch of Redmi Y2 smartphones.
Flash Sales by Xiaomi
Xiaomi is the brand that makes the most sales on online shopping platforms through flash sales. The Flash sales model has proved to be incredibly beneficial for the Chinese smartphone company since it creates a sense of urgency.
People wait for weeks and days for the anticipated launches which also disguisedly promotes the products online as people talk about them on various online forums.
Since mobile prices and other electronic gadgets are cheap and affordable they run out of stock shortly. Hence keeping potential customers hooked for the next flash sale.
Xiaomi’s MI Community
Xiaomi has always made adequate use of social media. From the very beginning when the company was still a start-up, the founder of the company along with his team used to post about its products on the online forums as a part of the marketing strategy of Xiaomi. That is how more and more people got familiar with the existence of its product.
When the brand launched its products its fans were the first customers who got the products. Today, it has a separate app for Mi users.
Mi Community App is an online community where you can get help with your questions and can also solve the problems of other Xiaomi users. It’s designed to be a personal place where users from all over the world can share their experience and its solutions, without the corporate gatekeepers getting in their way.
Marketing & Advertising Campaigns of Xiaomi
Marketing campaigns are a great way to publicize your product or business. They can be used to promote a website and its content, assist in the storytelling of products and services, or sell products.
Let us go through some of the marketing campaigns done by Xiaomi in the coming sections.
#SonuKiSuno – A Marketing Campaign of Redmi India
“Sonu Ki Suno” is a recent marketing campaign of Redmi, which focuses on tapping into the rising passion for smart devices in India. It was promoted with a tag line “#PowerPacked”. The campaign revolves around showcasing the basic elements in life that should be considered while buying a smartphone and how Redmi offers all these necessary features that are helpful in day-to-day life.
Redmi Note Series Launch Campaigns
Xiaomi launched several new advertising campaigns for its Redmi Note series over the past few years. The new commercials also feature Ranveer Singh, showcasing the ability of Redmi Smartphones. All the rounds of ads highlight what value these devices offer to customers.
Xiaomi has done various campaigns for its products over the years through a variety of mediums such as Newspapers, Television, and Social Media Advertising as well as getting products reviewed by Youtubers. This is an amazing marketing strategy of Xiaomi.
Competitor Analysis of Xiaomi
Following are some top competitors of Xiaomi:
Samsung: Byung-Chull Lee established the South Korean business in 1938. The business began as a trade firm and over time, via numerous mergers and acquisitions, evolved into an international conglomerate. In 1969, Samsung Electronics Industry Co. Ltd. was founded. Check out the marketing strategy of Samsung.
Vivo: Morgan Moore set up the Chinese technology startup Vivo in 2009. Its main office is in the Chinese city of Dongguan, Guangdong. With landline and mobile phones, the Vivo brand entered the telecommunications and electronics sectors. In 2011, it began producing its own line of smartphones.
Oppo: Oppo is a solely owned electronic goods subsidiary of the Chinese multinational BBK Electronics Corporation, which in turn runs the Vivo brand and is a major shareholder in the OnePlus brand. Oppo manufactures cell phones, Blu-ray and DVD players, and various other electronic devices. It debuted in China in 2004 and eventually expanded to several other nations.
To learn more read out the marketing mix of Oppo.
Apple: Apple Inc., headquartered in Cupertino, California, is a multinational technology business. The company develops and builds hardware products such as iPhones, iPads, and Macs, as well as technology and internet services. The operating systems known as iOS and Safari, one of the most prominent web browsers, are among its software. Get more insights about the brand through the marketing mix of Apple.
Lenovo: Lenovo is a Chinese global technology firm headquartered in Beijing. Liu Chuanzhi created it in 1984 with an entourage of 10 other engineers. Lenovo distributes its devices in over 160 countries worldwide. Lenovo’s Marketing strategy will help you understand the brand and its tactics.
To keep up in the market and sustain the changing market trends the marketing strategy of Xiaomi needs to be always well strategized.
Marketing makes and breaks the success of any brand and in today’s internet world Digital Marketing is the need of the hour.
Example of a Failed Campaign
Before concluding let us check out any failed marketing strategy of Xiaomi or a campaign that faced viewers backlash and what was the reason behind it.
Xiaomi, when advertising its Redmi Note 2, promised its users, two key features the Sharp/AUO screen and Samsung’s 13MP camera but when the users received their Redmi Note 2 they were quite disappointed and their expectations weren’t met as per the advertisement displayed.
The consumers who paid the insurance, if any damage happened to the phone were only assured of the maintenance of the product, not the full replacement. In a following statement, Xiaomi denied ever claiming that the Redmi Note 2 will have the Sharp/AUO screen, blaming misinformation on third-party online retailers that marketed the handsets in China.
With this, the comprehensive case study on marketing strategy of Xiaomi comes to an end, let us now go through the final thoughts in the coming section.
Conclusion-What’s Unique in the marketing strategy of Xiaomi?
Xiaomi is an excellent example of how a start-up business made it big.
the business has transformed with a unique blend of business strategy and marketing strategy of Xiaomi. From making flash sales to creating urgency to various other marketing campaigns, the brand has made its presence felt.
Despite facing threats from competitors and political backlashes for being a Chinese-origin company, Xiaomi has stood the test of time and could potentially be a company to look after in the coming decades.
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