The model used by Xiaomi is
not a usual one. It did not spend millions like other big brands to create
brand awareness rather it is claimed by Xiaomi that the money saved is spent on
providing better quality parts. Xiaomi is known as the, “Apple of the East”. Let’s
see an apple to apple comparison of, “Apple of the East” with the original
Apple.
Apple IPhone 5S
|
Xiaomi Mi4
|
$868 (In China)
|
$320 (In China)
|
1.3 GHz dual-core
Apple A7 processor
|
2.5 GHz quad-core
Snapdragon 801 processor
|
1GB of RAM
|
3GB of RAM
|
1.2MP front camera
& 8MP main camera
|
8MP front camera
& 13MP main camera
|
4 inch screen
|
5 inch screen
|
Now let us talk about the model used by Xiaomi which resulted in the enormous success. The model is Flash sales. Also known as deal of the day, it is a business model in the E-commerce world in which a single product is offered for sale by a website only for a period of 24 to 36 hours. The potential customers are being registered and notified about the deals.
Now
the question is how did flash sales model helped Xiaomi? First of all, the important aspect worth
noting is that Xiaomi is not the pioneer in selling through internet. This
began in February 2014 with Motorola typing up with Flipkart to sell its
Moto-G, Moto-E & Moto-X online. The result of this initiative was the sale
of 1 million phones of Motorola. This success encouraged other players like
Samsung, Lava & Microsoft to sell through the online route. Xiaomi did not
used only the online media alone but also the flash sales model, as already
explained above.
The flash sales model helped in creating exclusivity for Xiaomi, we all
have well studied the relationship between scarcity and value. It was never
made available in any stores. This made consumers even more curious about the
product. The product no doubt offers great interface but is it the contribution
of flash sales model that makes it even more popular, is a thought worth
answering.
-- By Mudita | Great Lakes Institute of Management