Xiaomi: Success story of a Chinese startup challenging bigwigs of smartphone industry
Dr. Surinder Kaur and Parminder Kaur
Background: This is a case study of Xiaomi- a Beijing based Chinese electronics company, Xiaomi Inc. The company was founded by Lei Jun, a serial entrepreneur and investor in association with Bin Lin, a former Google and Microsoft executive. The company has a reputation of coming up with top quality smartphones at affordable prices. It has followed a unique innovative business model which involves deciding product quality and requirements based on fan’s inputs.
Objectives: the paper seeks to study unconventional business model adopted by Xiaomi and identify the success factors of Xiaomi in China and identify the challenges faced by Xiaomi and explore strategies adopted by company to overcome these challenges. The paper further seeks to examine the challenges that Xiaomi could face in gaining presence in intensely competitive markets like US smartphone market
Methodology: As it is an exploratory study, therefore all the data and information has been collected from the company’s website, published interviews of its founders and key managerial personnel. However, the study faced a tough challenge in collecting information about its business strategies as it is a privately owned company and not much information is available on public platform.
Findings and Results: The study has revealed that the company initially started with assembly of hardware from known brands to contain costs and to produce low priced mobiles though not compromising on quality. To market the products again innovative techniques like flash sales and on line advertising was employed. These factors coupled with unique pricing model allowed Xiaomi to produce and sell good quality smart phones with features similar to Samsung or apple at very cheap rates. Later on, it has ventured into hardware production and selling its own software such as apps, games and cloud computing. It sells its smartphones at US$200 to US$300 as against highly priced Samsung and apple phones. Now to gain market in developing countries like India, it has also started opening its service centers and mobile stores.
Dr. Surinder Kaur, Parminder Kaur. Xiaomi: Success story of a Chinese startup challenging bigwigs of smartphone industry. Int J Res Finance Manage 2018;1(1):56-64. DOI: 10.33545/26175754.2018.v1.i1a.236