No Monetary Advertisements – Direct online sale
The first and the foremost reason is that Xiaomi does no Advertisements at all. And that saves a it lots of money. The company totally relies upon its social media network and Xiaomi Fan Group to spread the word mouth to mouth and that works pretty well too.
Also the Brand doesn’t approaches the Middle Man (i.e. shopkeepers, retailers), it just focuses upon sale of its products online via Flipkart, Amazon and Snapdeal and bit through offline stores such as The Mobile Store and Airtel Store. So as it doesn’t approaches retailers so there’s no retailer margin and thus more of cost cutting here.
Many Xiaomi fans and users have criticized Xiaomi’s Flash Sale policy as it offers very less quantity of product which isn’t ever able to fulfil the whole demand of its followers. Now Flash Sales require a limited less stock of products. So that means the company just produces a fixed number of say 40,000 particular type of phones and sells them immediately, this helps to avoid the storage and maintenance cost of the inventory.
Expansion Outside Local Boundaries
With all this Xiaomi isn’t just selling its Smartphones to a small customer base. It has and is continuously expanding its bases in more and more countries. At present its selling in countries like – China, most of the Southeast Asia, India, Brazil, Russia and Mexico. So its like making the saying of “Drops make an Ocean” come true, as there would be more buyers so more “Drops” and eventually it will form an “Ocean” with those “drops”.
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