In the increasingly competitive world of smartphones, the young Chinese brand Xiaomi is emerging like a rock star. In just four years, the company has become the fifth-largest maker, thanks mainly to strong China sales. To bring its business to a higher level, Xiaomi is making forays into Southeast Asia and India.
But expansion has been a costly learning curve for the Chinese company. Strategies that work perfectly well at home do not necessarily apply in overseas markets.
Xiaomi is known for creating hype and excitement by limiting its offering, and many Chinese customers are hooked despite the hassle of competing and scrambling for a Xiaomi phone online. But Singaporean and Indian customers are put off by this so-called “hunger marketing” tactic.
Xiaomi has made two rounds of sales for its Mi3 handset on the Amazon-like e-commerce platform Flipkart since it entered the Indian market in late July. On both occasions, the website crashed immediately after a traffic spike.
In the second online offering, 200,000 people competed for a limited number of handsets and it took just five seconds to sell out, according to Xiaomi.
Many disappointed customers were furious and frustrated.
Some Indian customers questioned on Twitter whether Xiaomi’s touted value-for-money handset was nothing more than a scam.
In Singapore, buyers also complained about Xiaomi’s cumbersome registration procedure and tight supply.
Tarun Pathak, a telecom analyst in India-based CyberMedia Research, told the local Economic Times that, “if you look beyond the hype, the company has sold just about 20,000 units so far. To capture even a 1 percent market share in India means selling 60,000 units per month.”
India is a huge market. The country has 650 million mobile phone users, and only 40 million or 6 percent of them own a smartphone. India’s smartphone market is estimated to double this year.
But it is just a beginning for Xiaomi’s overseas venture. As long as it listens to what these new customers say and make adjustments to its marketing practices, it has every chance to learn the right approach to become a top seller in these new markets.
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