If you are reading this, you likely know of Xiaomi — a Chinese company that is breaking into various markets with its affordable smartphones. For those that 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 per cent 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 with strategic moves that have reaped success over time. So, what is Xiaomi’s secret sauce? 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 Xiaomi, its marketing mix, the marketing strategy and the campaigns that it has undertaken over the years to increase its market share and brand recognition in India and around the world.
Xiaomi is a Chinese electronics company headquartered in Beijing established by Lei Jun in 2010. It is currently one of the top four smartphone manufacturers in the world, just after Apple, Samsung, and Huawei.
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.
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, Wifi 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.
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
Marketing mix model is a practical way of conceptualising how you should approach marketing in a business. The framework of this model is based on the parameter of 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 go 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 core business model of the brand is built on expanding its product offerings through aggressive price reduction. This pricing strategy is aimed at gradually gaining a foothold in the market by providing low-cost alternatives to more expensive products without compromising on quality or features.
As of 2020, the price of Xiaomi’s smartphone range 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 them 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, 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 gaining 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 focusing 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.
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 upon the marketing mix model, let us now go through its marketing strategies in the following sections.
Marketing Strategy of Xiaomi
From the very beginning, Xiaomi has attempted to save its costs by reducing marketing spends. 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 spends year on year.
With that being said, let us go through some of the common as well as unique marketing measures used by Xiaomi to maintains 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 that 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 for promoting 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 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 the 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. That is how more and more people got familiar with the existence of its product.
When the brand launched its products their 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 how 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, Social Media Advertising as well as getting products reviewed from Youtubers.
Let us now go through the SWOT analysis of Xiaomi in the coming sections.
SWOT Analysis of Xiaomi
A SWOT (Strength, Weakness, Opportunities and Threats) analysis is used to identify strategic opportunities and weaknesses within a company for management to take effective action. It basically represents a clear picture of problems, opportunities and helps in implementing a prospective change.
Strengths of Xiaomi
- Xiaomi is one of the largest smartphone makers in today’s time
- Sells the products at very affordable and low prices
- Variety of products on the shelf to offer
Weakness of Xiaomi
- Online sales have proved to be beneficial but also has been a weakness for the company because not everyone trusts buying from online platforms
- Xiaomi misses the chance to reach high-income customers as it has created an image that tells the audience that its products are made for middle-class customers
Opportunities for Xiaomi
- The brand has started focusing more on its offline stores which can increase their sales and bring in more revenue
- Creating strong research & development like that of Apple & Samsung will help Xiaomi to adapt to various technological changes quickly
Threats for Xiaomi
- Xiaomi’s biggest threat is the presence of numerous competitors within the industry
- Misinformation and rumours about the brand in the market can also be a huge threat. This is why people should be well informed about the brand and the products it offers.
- Controversies are a huge risk to any brand. Xiaomi should be extremely cautious while getting associated with any type of controversy.
With this, the comprehensive case study on Xiaomi comes to an end, let us now go through the final thoughts in the coming section.
Xiaomi is an excellent example of how a start-up business made it big.
It has had a unique blend of business strategies and marketing strategies that have transformed the business. From making flash sales to create 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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