By announcing the “online shopping” days where the items comes with some freebies or they sell for 1$ .
XIAOMI PHONES BEING SO CHEAP With High Specs
Direct Online Sale with No Monetary Advertisements
Xiaomi does not spend its money on the advertisements, therefore in this way it saves money. It does cost cutting in the advertisements and that’s why it saves money and just it relies on the social media network and the mouth to mouth publicity, and it’s quite effective also and works well.
As the brand does not approach the retailers and the shopkeepers but focuses on the selling through the online platform like Amazon, Snapdeal,
Flipkart etc. But there are some stores such as the mobile store and Airtel store. It operates online and does not involve the retailer’s margin in between. Hence, they sell the phone at cheap prices.
Instead of making high profits on hardware, Xiaomi aims to make its money after they sell their hardware.
In China, Google and its services are banned, which rendered a need for a Chinese equivalent.
Xiaomi decided to step up and it makes many services similar to Google’s. For example, Mi Cloud replaces Google Drive and Google Photos. You can pay to expand your Mi Cloud storage as you can for Google Drive. Xiaomi has its own browser, forecast service, calendar, cloud and many other services, half of which you probably haven’t even heard of.
These apps don’t compete outside China as Google apps reign supreme. Almost all their users come from the company’s motherland.
Flash Sales
In the flash sales policy, the company just produces the limited number of sets, say about 40 thousand or 50 thousand and sells it immediately offering flash sales. This helps to avoid the maintenance cost of inventory the storage issue,
thus earning a good profit and without undergoing the phase of loss. Many times its fans criticize this policy as it is not able to fulfill the demands of its followers due to the limited stock.
Xiaomi isn’t cheap. It’s just that Apple, Samsung and other competitors are just unreasonably expensive.
It’s not just that, though. Xiaomi does price aggressively. They can afford to do this because phones aren’t their only revenue source. Xiaomi — like Apple and Samsung — have other businesses where they make a lot of money. Their phones are just one way to funnel people to those businesses. Apple for instance actually makes a lot of their money from the iTunes ecosystem.
They just choose to also make hefty margins off their hardware because they want to keep that premium exclusive status in their branding, unlike say Google who chooses to sell many products and services at a loss to funnel people into their search engine business.
Better Reliability
We often get to hear people complaining about China products and if we talk about the hardware of the China phones, they are quite disgusting and most of them are not reliable.
Where on the other hand, the hardware mi phones render is good and the service centers of mi which are been rapidly increasing are quite appreciable.
Quick & Large sized Production
The biggest advantage what Xiaomi has today is their production alignment and products platform across different countries. Like established brands Samsung, Nokia etc - they offer almost same models in most of their operating countries and that gives them advantage to achieve real economies of scale.
They have the ability to squeeze margins of their suppliers and in turn promise them bigger volumes and thus top lines with timely payments. They were the first one to set up their factories in India to take advantage of Make-In-India program.
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