Xiaomi Inc.

By

Edwin Grigary

Introduction• Xiaomi Inc. better known as “Mi” is a privately

owned Chinese electronics company headquartered in Beijing, China.

• Began its operation in August 2010 with Android based firmware MIUI .

• In August 2012, Xiaomi launched the Xiaomi Mi2 smartphone.

• The company had sold over 10 million Mi2 devices in just 11months.

• Following the success of MI2 Xiaomi launched their new models MI3,REDMI 1S,REDMI Note, RedMi pro in 2013-2014.

• Expanded into other consumer electronics including tablets, wifi network routers, Smart TV, Set-top box, cloud storage and cloud computing service, instant messenger, and power bank.

•  In the first quarter of 2015 ,Xiaomi launched their new flagship device MI4 and other upgraded versions of their earlier models.

Cont…• Xiaomi currently sells its products in all major counties including USA,

Australia, India, Russia, Singapore etc.

•  Xiaomi broke the world record for most Smartphones sold in 24Hrs on April 6 2015. The sale reached a staggering 2.11 million mark within 24 hrs.

• Also known as “The new Apple” or “The apple of China”.

• The company sold over 60 million smartphones in 2014.

• Xiaomi is now the third largest smartphone maker in the world followed by Lenovo and LG at fourth and fifth place respectively. Samsung remains at the first place despite declining shipment volume, followed by Apple Inc. at second place.

• The company's founder and CEO is Lei Jun, China's 23rd richest person according to Forbes.

Products

• Mi3

Redmi 1S

Mobile phones

Mi4 Redmi pro

Redmi Note

• MiPad

Tablets

Software's• MIUI

Home entertainment• Mi smart TV• Set top box

Accessories

• MiWiFi (network router)• MiPower Bank (external battery)• Mi Band (fitness monitor & sleep tracker)

Marketing and Business ModelXiaomi employs a marketing strategy that is very unlike other smartphone makers such as Samsung and Apple. 

• Apple makes its profit on the hardware, while Xiaomi makes their profit on services.

• Company prices the phone almost at bill-of-material prices, without compromising the component quality and performance.

•  Xiaomi sells a model for up to 18 months instead of the short 6 months used by Samsung to profit from the fall in the costs of components that occurs over time.

• Xiaomi does not own a single physical store and instead sells exclusively from its own online store which further reduce overhead costs .

• It also did away with traditional advertising and relies on social networking services as well as its own customers to help advertise its products.

Cont…• “Customer obsessed” strategy: • Taking customer feedbacks to keep improving.• Also maintains and develops a strong relationship with

customers through customer forums .

• An eco-system of Smart products .

• Xiaomi sells it’s product through online stores through flash sales which ensures that supply never outstrips demand .

Xiaomi and the Indian Market

India: Emerging Smartphone Market

• Breaking out to Smartphone's from Featured phones• When there are about 650 million mobile users in India, only 12 per

cent of them are Smartphone users. So the headroom to grow is tremendous.

• Focusing the youth• Younger generation are so fascinated towards Smartphone's.• They depend more on it, rather than PC for most of the work

What are the features used by a Rural India Consumer?

A look at the Competitors…..Micromax• Micromax is the biggest

competitor in India as it has a wide range of budgeted Smartphones. It focuses on continuous innovation and has a big market share in India after Samsung.

Branding: Micromax caught a global attention by taking Hugh Jackman as a Brand Ambassador

Samsung• Samsung is the world leader in smart phones and also in India.• Holds around 22% of the market

share.• Very high brand value among

customers• Strong aftersales support.

Cont…• Karbonn Mobiles• Karbonn is another

Indian mobile brand that mainly focuses on youth .

• Holds around 3% of market share.

• Lava mobiles hold 7% of the market.• They mainly focus on low cost phones within 10000Rs.

• LAVA Mobiles

• Xiaomi entered the Indian Market by mid 2014 and since then their devices have been selling like hot cakes.

• Xiaomi currently holds 4% of the Indian smartphone industry.

• The arrival of Xiaomi has forced other competitors to reduce the price of their products and introduce new variants .

Comparison between MI4 and Samsung S5

Samsung S5Xiaomi MI4

Conclusion• Xiaomi with its innovative marketing and

business models is redefining the mobile phone market around the world, and its sure that they would be able to reach the top position in a few years time.”