(After talking about the latest iPhone, I want to understand more of the smart phone market, so this time I focus on one of its competitors – Xiaomi)
On September 5,2013 Xiaomi, launched the latest the Mi-3 handset, just 5 days before the launch of the newest iPhone 5s and 5c. Xiaomi is often compared to its giant American rival. “We have never compared ourselves to Apple—we are more like Amazon,” says Lin Bin, Xiaomi’s co-founder.
These years Xiaomi is growing rapidly. Its services revenues were 20m yuan in August, up from 10m yuan in April.
Why are they so successful?
- their openness to user feedback
- lower price comparing to other smart phone.
I want to highlight the second point. There’s no doubt that price is the main factor of influencing the customers’ willingness to buy the products. really impressed me. By selling phones direct to customers online, rather than via network operators or retail stores, Xiaomi keeps prices down.
This strategy reminds me of the success of Dell[2]. Dell’s direct model(suppliers®manufacturers® customers) eliminates the time and the cost of third party distribution. Xiaomi and Dell did one same thing—cut down the extra cost of the third party and tried to low down their prices by simplifying the supply process.
Observing deep into the essence, we can find out the common which may provide some enlightenment and give us some guidance for our further career.
References:
[1]Smartphones in China—Taking a bite out of Apple Sep 14th 2013, the economics
[2]Magretta, J., & Dell, M. (1998). The Power of Virtual Integration: An Interview
with Dell Computer’s Michael Dell. Harvard Business Review, 76(2), 72-84.