Xiaomi Business Model

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Is Xiaomi capable of shaking the global smartphone industry with a "Services based business model"?
This case has been compiled from secondary published sources to illustrate the emergence of a new services-based business model in the smart phones segment by Xiaomi.

Authors:
Sonam Gupta is currently working as a freelance consultant in the areas of strategy and business management. Prior to this, she has worked as a Research Analyst with CRISIL Global Research & Analytics, a subsidiary of Standard & Poor. She holds an MBA degree from Nirma University.
E-Mail: sonamgpt88@gmail.com

Ishneet Dhillon is currently working as a Senior Research Analyst with CRISIL Global Research & Analytics, a subsidiary of Standard & Poor. She holds a PGDM from Kirloskar Institute of Advanced Management Studies.
E-Mail: dhillon.ishneet@gmail.com

"In a mobile-phone landscape, Xiaomi’s rise to prominence is not an everyday occurrence" - Melissa Chau, Senior Research Manager for client devices, IDC Asia/Pacific

Xiaomi is the brain child of a serial tech investor and entrepreneur Lei Jun, who is creating the next wave in the Smartphone industry with the launch of smartly designed Android phones at very moderate costs. The player has already shaken the Chinese market and is expected to be the next buzz word in the international market. Leveraging innovation and hunger marketing as its core competency, will this Chinese player be a threat to the established brands such as Samsung and Apple?

Background Note
Xiaomi Inc., headquartered in Beijing, China, is a privately owned electronics company that designs, develops, and sells smart phones, mobile apps, and other technology products. It was co-founded by eight partners (Lei Jun (CEO), Lin Bin...

... middle of paper ...

... line at the middle to lower end of the market, represent Xiaomi's competitive strengths. Other lower-end makers can offer similar quality but lack the buzz that Xiaomi is able to generate. Top-tier names like Apple and Samsung can generate buzz, but can't come close on price.

"Whether it can rise to the next big milestone of becoming a global player is its next big challenge" - Bloomberg

Questions
1. Will Xiaomi succeed in the international market, with each having its own peculiar need?
2. Can the existing model which offers more bangs for the buck sustain in other geographies?
3. Will Xiaomi be able to do away with the stigma associated with carrying a Chinese brand?
4. Is Xiaomi's services-based model capable of disrupting the smartphone industry?
5. Can Xiaomi survive in the long run without leveraging the traditional marketing and advertising platforms?

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