Swot Analysis Of Xiaomi

2106 Words9 Pages
Xiaomi has shocked the world with their ability to sell high quality, high tech phones for so cheap, but it all comes down to their pricing strategy. Xiaomi’s pricing strategy is based around not having any brick and mortar stores. This reduces many potential costs for them, such as distributing to different stores and wages for employees working in stores. Another surprising strategy that they have found great success in is that they put very little investment into advertising, if any at all. They rely solely on social media and word of mouth to sell their products, and they have built a very large social media following. With no advertising costs and no store location costs, Xiaomi can sell their products for a very low price, but still see…show more content…
Mainly, for their inland stores, Xiaomi uses a company-owned distributor but for other countries such as India or South Africa, Xiaomi uses independent retailers and distributors like Amazon to list their products for purchase. This high level of indirect involvement beyond domestic territory is thought to be the reason behind why Xiaomi is involved in franchising as a company. Partnering up with companies such as Flipkart, Airtel, and the Mobile Store, Xiaomi is able to allow for their products to be sold within these companies to hold up franchise regulations and create a segmented form of organic growth. Furthermore, to secure top tier management of both stock and supply chain management, Xiaomi has begun to set up warehousing and work with companies such as CEVA, a logistics distribution company, in order to stay atop their bustling ecommerce sales and do a more stringent push towards retail…show more content…
Xiaomi relies on having some of its products sold online through the company site MI.com and through an e-commerce site called Flipkart (Kharpal, 2014). Flipkart is a company based out of Singapore with headquarters in Bangalore. India. The company can be thought of as the Amazon of the East. The company essentially specializes in selling just about every consumer product ranging from electronics to home goods. The problem that Xiaomi has in South Africa as an online only retailer is creating the awareness not only for Xiaomi but for their selling agent Flipkart. This can be difficult as only about 24% of the population in South Africa has access to computers (International Telecommunication Union, 2015). The method of indirect selling that works in China due to the brand recognition of Flipkart may not be able to create the same effect on sales in South
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