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August 13, 2020
If you are considering buying a Xiaomi phone, then chances are you’ve also come across this question: “Why Xiaomi is so cheap even if they are packed with specs?” And the fact of the matter is you’re not alone because most consumers have pondered one this idea since it also creates a false assumption of substandard quality.
But when it comes to top Chinese brands like Xiaomi, cheaper price does not always translate to crappy Chinese junk. And if you’re interested to explore further on this matter, then we invite you to continue reading as we are going to give the reasons why Xiaomi cell phones are so affordable despite the impressive specs in today’s entry.
Xiaomi doesn’t spend on advertisements, which also allowed the company to save money in the process. But that doesn’t mean they don’t make efforts to promote their products to consumers at all. In fact, they rely more on the traditional word of mouth and social media advertising to reach their target markets.
Aside from that, the company’s approach in retailing their phones is by selling it at online platforms like Flipkart, Snapdeal, Amazon, and etc. to omit the retailer’s margin. Hence, Xiaomi cell phones are sold at affordable prices.
The company’s success can also be attributed to e-Commerce companies who are selling products while showing high Gross Merchandise Value (GMV) to investors. And as a result, Xiaomi was able to earn more than half of India’s digital market and is continuing to grow even to this day.
Xiaomi is also very careful with the way they spend their money on investments. In fact, they only have less than a hundred employees in India even if the country is attributed to 60% of their overseas sales. This allowed them to curb on unnecessary expenditures and respond to the market faster as compared to their close competitors like Vivo, Oppo, Lenovo, and etc.
The principle of Xiaomi has always been to mass-produce phones in limited quantities and only to re-manufacture specific models based on market demand. This way, they are able to keep the cost down as they are not dealing with overstocks.
Due to their company’s policy of maintaining small stocks of phones per model, it also created a barrage of social media complaints from buyers who were unable to secure the Xiaomi phone they want. And in the process, it sparked the interest of other social media users who became intrigued about what the fuzz is all about, which also convinced them to become customers in the end.
Lastly, Xiaomi does not rely on phone sales alone as Xiaomi cell phones have non-removable apps. And when users eventually open these apps, they will also see advertisements that the company is placing inside these revenue-generating apps. Now considering the company’s broad customer base, Xiaomi is expected to earn more in-app revenues aside from their regular phone sales.
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