Some say Xiaomi is the “Apple of China”, and they may not be completely wrong. The small startup that emerged only 4 years ago has been getting major recognition in recent months and years. Xiaomi has now risen to become the third biggest manufacturer in the global smartphone market.
The equation Xiaomi is using may be more complex than we can explain, but there are some key factors that make Xiaomi one of the most important up-and-coming phone manufacturers in the world. They are taking some huge steps, and they are succeeding by selling out their products in a matter of seconds. How did they accomplish this?
Let us take you into the world of Xiaomi and show you a few things other manufacturers can learn from the Chinese startup.
Disclaimer: Before you jump on me, let me tell you I am no fanboy of Xiaomi or any other brand. This is part of a series of articles in which we highlight what each manufacturer is doing right. We have done similar posts on Motorola, HTC and Samsung.
Making solid products at great prices
When you are trying to sell a product, the manufacturer must be proud of it. The device must be a one-of-a-kind, and it must be worth its salt. This is something not every phone maker can tout, especially when you see manufacturer releasing phones left and right just for the sake of covering every niche market.
Xiaomi has very few products, but they are all great. The Xiaomi Redmi Note is one of our favorite affordable smartphones, with a stunning $130 price point and specs that make the device a great contender. The Xiaomi Mi4 is also an amazing device, with stunning specs and a $400 price point. The Xiaomi Mi Pad also offers iPad-like quality for a $300 price.
It’s very hard to beat Xiaomi in terms of bang for your buck. But there’s also tricks the company has in order to accomplish this.
Focus on long-term revenue, not immediate profits
Xiaomi has taken a hint from Amazon’s business model, which has proven to be very effective. As a manufacturer, Xiaomi is not making too much money, but the plan here is to get more money in the long run, by selling software.
We can’t say Xiaomi is making too much money on software right now, either, but they are thinking for the future. Get great devices out there, focus on branding and make sure you can get a phone in a good amount of users’ hands. Then roll out your paid software and start rolling in the dough.
Don’t make more devices than you can sell
Xiaomi isn’t having a huge issue with selling phones (in fact, they always sell out in seconds), but they are definitely not risking the chance to overstock. Xiaomi sells every device in every batch that they make. Then they continue manufacturing and release another batch.
It may be a slow process, but it’s a safe one. Especially for a small startup that can’t afford taking losses. They are trying to keep the demand higher than the supply, while trying to sell as many devices as possible. I say they have found a great balance, even if it may annoy us that it’s hard to get our hands on a Xiaomi product.
Make it big at your home country first
Needless to say Xiaomi has completely taken over China, which was a smart move from them. For starters, they have a very powerful home country to cater to. China is one of the most powerful markets in the world. Them making it at home means they have a huge chance at making it in a global expansion.
In addition, some manufacturers make the mistake of trying to expand way to quickly. Xiaomi knew how to balance its expansion, and that is why they are succeeding. Again, even if it’s annoying not having access to these products.
Adapt to modern, and more powerful, forms of advertising
Major brands have to gain huge profits in smartphones because their companies have huge maintenance expenses. You gotta pay employees, establishments and the like. One huge expense is always advertising, though.
It costs a fortune to pay for online ads, billboards, TV commercials and other forms of promotion. Companies often forget we have a very powerful tool that costs very little – the internet. Xiaomi has grown huge by depending on social media and word of mouth.
In addition, they have a very strong group of followers. Because their products are awesome and priced very fairly, users tend to love Xiaomi. Some say Xiaomi fans are just as passionate about their brand as Apple fanboys. That says a lot!