How does Xiaomi sell its smartphones by engaging customers?
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This presentation introduces a tech startup Xiaomi and its marketing strategies. It also points out Xiaomi's problems and gives possible solutions.
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How does Xiaomi sell its smartphones by engaging customers?
- 1. How Does Xiaomi Sell Its Phones By Engaging Customers? Snow Jingxue Wang Sept 30 2015
- 2. IN－CLASS GAME Phone CPU RAM Camera Screen Price A 1.4 Ghz Dual-Core 1GB 8- megapixel 4.7 inch 326 PPI 649 (16GB) 749 (64GB) B 2.7 Ghz Quad-core 3GB 16- megapixel 5.7 inch 432 PPI 750 (32 GB) C 2.5 Ghz Quad- core 3GB 13- megapixel 5.0 inch 445 PPI 320 (16 GB) 390 (64 GB)
- 3. PHONE A PHONE B PHONE C
- 4. THE POWER BEHIND HOW DOES XIAOMI SELL ITS PHONES BY ENGAGING CUSTOMERS? Snow Jingxue Wang Sept 30, 2015
- 5. WHO’S XIAOMI - Fund in 2010 in Beijing, China - Same year, it launched its Android based firmware (open source) - Its first smartphone was announced in 2011 - Now, it’s world’s 4th(3rd) largest phone maker - Other products: TV, camera, speaker, etc. http://www.mi.com/en/
- 7. IPHONE 6 PLUS VS XIAOMI NOTE 4 https://www.youtube.com/watch?v= 9n2pTZIEgy8 - In 2014, Xiaomi sold 61 million smartphones - Phone sales increased 227% than 2013 - Its total sales increased 135% than 2013
- 8. WHAT’S THE MARKETING STRATEGY Stage 1 Build WOM Stage 2 “Hunger Marketing” Stage 3 Expand Product Line + Go Globally
- 9. STAGE 1: BUILD WOM - Start with software, not hardware - Develop core users - Build WOM by core users - Build huge community - Get good WOM before first hardware launch - Impress customer by a good product with low price (half price as iphone) - Charge free for basic services/fuctions, but charge for added-value service (games) http://www.antelife.com/xiaomistore.html
- 10. TO BE CONTINUED… It’s more a internet company…not a phone maker “We're actually an Internet company…and we have a lot of apps. We've built the MIUI firmware based on the Android OS and it's a very strong system…The mobile phone itself is only the carrier. Microsoft used to sell Windows in a box with a CD in it. Does that make Microsoft a paper box company? The box and the CD are only the carrier. If people don't understand this, they can't understand what kind of company Xiaomi is.”
- 11. TO BE CONTINUED… 5 Things Xiaomi Does to Cultivate Fans Product Testers Launches Codes Parties Social Media
- 12. STAGE 2: HUNGER MARKETING “Flash Sales” Model (limited quantity of product storage) avoid over production to save cost no physical stores in local market to reduce cost Create Conversions and Discussions save advertising cost by user generated content and by using social media
- 13. STAGE 3: EXPAND PRODUCT CATEGORY High cost-effective product
- 14. ALSO: GO GLOBALLY Xiaomi’s international vice president Hugo Barra was leading Xiaomi’s global expansion since joining the company from Google. In India, Xiaomi managed to sell 1 million phones within 4.5 months of its first launch and now has 4% of the market.
- 15. MARKETING FUNNEL Heard about Xiaomi + have interests Purchase Xiaomi products Community / Fans Parties Following news/ interactive/ re-purchase Protect the brand
- 16. - A deep emotional connection with the brand - High levels of active participation - A long-term relationship LOYALTY 3.0
- 17. 1. WOM could hurt reputation. (Need more brand monitoring and customer service force) 2. No physical stores in local market. (Build more physical stores) SOME PROBLEMS…. 3. Lack of real innovation. (Avoid copycat, have more distinguish design, and keep working on innovating)
- 18. TO BE CONTINUED… Copycat Apple Xiaomi’s CEO Mr. Lei quickly dubbed "China's Apple" and "China's Steve Jobs" But Xiaomi’s CEO was not happy with this……
- 19. CONCLUSION Xiaomi’s fast growing was benefit from its cost-effective products and huge fan-base communities. The Internet and social media accelerated the power of word-of-mouth and dramatically reduced Xiaomi’s marketing costs. Same as other Chinese tech startups, Xiaomi is lacking of innovation. Also, its product profit margin is low. But Xiaomi is working hard to bring customers more affordable high quality product with real innovation.
- 20. QUESTIONS & THOUGHTS ?
Editor's Notes
- Choose one of them, between phone a, b, or c, give a reason which one you wanna purchase.
- Xiaomi is a 5-year-old starup but Xiaomi’s evaluation ranked second highest among all startups globally, followed by Uber. It has a 46 billion us dollar evaluation.
- Xiaomi’s business model: "We're actually an Internet company. We've already got a business in mobile phone hardware and we want to add to that an Internet platform. We can earn money from that, once it's established.” REUTERS REPORTER, JANE LANHEE LEE, SAYING: "So how can you call yourself an Internet company? You sell mobile phones.” XIAOMI FOUNDER & CEO, LEI JUN, SAYING: …Today, we're already China's third largest e-commerce company and we've already built a massive, massive, mobile internet platform. And we have a lot of apps. We've built the MIUI firmware based on the Android OS and it's a very strong system…The mobile phone itself is only the carrier. Microsoft used to sell Windows in a box with a CD in it. Does that make Microsoft a paper box company? The box and the CD are only the carrier. If people don't understand this, they can't understand what kind of company Xiaomi is.”
- See the notes
- Small startup with limited funs, Xiaomi has been using the flash-sales model to avoid over-production. Xiaomi typically sells limited quantities of its smartphones once a week trough its website, forcing customers to scramble to place orders online. For those who already successfully place their order and get the physical products, they will discuss the details and make the topic goes even more viral. The quality of the product is actually good and most buyers are satisfied.
- Though Xiaomi’s flagship product is smartphones, this company was always redesign popular electronics. The goal was to make them more aesthetic, more functional, and more affordable. Its lineup includes TVs, Wi-Fi routers, Bluetooth speakers, sports bracelets, air purifiers, smart light bulbs, and GoPro-like sports camera, etc.
- Xiaomi entered India, Singapore, and other East Asian Marekt. This years, Brazil market entry was also successful. Xiaomi create different Facebook pages for different countries, and interact with fans in their own languages.
- It begins with awareness, this happens when a consumer sees your product or starts to hear about it, most often associated with hype or buzz. The next step is consideration in which the customer thinks about purchasing the product and deciding whether they want it or not, and what benefits it will provide to them. Then comes conversion where the customer purchases your product or service, this is converting advertising to a sale. After that is loyalty, when a customer likes your product they will stick to it, and will buy other products from you. Lastly comes advocacy in which a customer likes your products so much that they begin to tell people about it and rave about how good it is. This word of mouth then again turns into awareness but for a whole new consumer, ultimately restarting the cycle.
- WOM: ----Because brand has less control of WOM, h the spreading of reputation can be fast online, the spreading of criticism and slander might be faster. ----Xiaomi needs a strong brand monitoring team to take action when necessary. Its customer service team also needs to be professional enough to deal with those harsh buyers and groundless rumors. Physical Stores: Also, limited numbers of physical stores in local market could hinder consumers making purchase decisions. Even a Xiaomi phone is half price as an iPhone, but it is still hard for most consumers spend handers of dollar without even experience the device. Also, customers have hard time to find physical stores may feel lack of support. Innovation: Thirdly, Xiaomi lacks of real innovation. Most of Xiaomi’s products are based on re-designing other brands’ products and selling in lower price. Therefore, Xiaomi will never became a market leader and hard to seize any blank market by innovational products or service.
- Lei Jun, were quickly dubbed "China's Apple" and "China's Steve Jobs," in part because of Lei Jun's habit of introducing the company's new smartphones while wearing a black turtlenecks and strolling the stage in front of spare, tasteful product photos. But Xiaomi has nothing to do with Apple Wear black shirt and jeans in launches just personal worship to Jobs Product design is different Positioning & Target audience is different Business model is also different Some people called Xiaomi the Chinese Apple. Some medias pointed Xiaomi’s copycat of iphone from new product launching to product design. Xiaomi’s CEO Mr. Lei was plainspoken admitted that he was a big fan of Apple. He used to imitate Steven Jobs wearing blue jeans in launching events because of personal worship, but in terms of smartphone design, Apple and Xiaomi are totally different. In addition, the biggest differences between Apple and Xiaomi are the marketing positioning and target audience. Xiaomi’s low price strategy makes itself difficult to compete with Apple. Xiaomi is still hesitating to enter US market because the domination of Apple just made everything harder.
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