Can Xiaomi Change The Way India Shops ?

Xiaomi is one of the largest cell phone makers in the world. They are dubbed as the Apple of China. But when you talk to the CEO of the Company Lei Jun he would tell you that Xiaomi is a software company. With 94% of the company’s’ revenue coming from smartphone sales you get an idea of just where Lei Jun’s focus is at. He sees his handsets as just the beginning of a long relationship with every customer he has.

There are two critical areas in where Xiaomi is able to differentiate itself away from the likes of Samsung and Apple. None of those more apparent and critical than their pricing. The cost of a phone from Xiaomi averages ⅓ the cost of a comparable phone from either Samsung or Apple. Xiaomi also forgoes the traditional “Big Box” retail channel for a total online distribution. The majority of the sales are done through the company’s website, with more sales coming from partnerships with e-commerce sites such as Amazon.

India… The Next Frontier

The Indian market is vast and ripe for the taking. The problem is that the Indian shopper is used to buying through predetermined channels, with only 25% of the population having access to the internet. Xiaomi was able to penetrate into India simply because of the pricing. But they payed attention to the needs of the customer and started distributing through some retail channels so that they were able to start staking claim to the 75% of the population who were not on the Internet. Many large companies are stubborn and miss out on great opportunities,  but not Xiaomi. They will be able to grab their customers from the ground floor and ride the elevator up with them as the Indian consumer matures. Marketing is a two way street and Xiaomi drives on both sides. They give the consumer what they want by listening to what the consumer is asking for. It is a simple strategy but one that goes undone more times than not. Xiaomi makes it a practice to change aspects of their phones with real time input from their consumers by having their staff funnel through online forums. Their flexibility will propel them to the Indian consumer.

 

Nathaniel Dorsey

MBA Candidate 2016