How Xiaomi able to sale smartphone at lowest price ? " Xiaomi Pricing Strategy : Reviled "

In the past too, many Chinese handset players have entered the market with low-priced phones. But with low prices, tagged along the low quality as well, giving the Chinese market a bad nameXiaomi and Barra set the tone right by bringing high-end quality at affordable prices.

On June 6, 2010,  eight partners came together to co-found a software startup that would create a new custom ROM based on Android. The Start up was led by Lei Jun who founded in 2000, which was later acquired by Amazon in 2004, also held positions at Kingsoft, leading the company to its IPO on the Hong Kong stock exchange.

The Pricing strategy employed by Xiaomi - Hugo on Your Story
To start off with, Xiaomi sells its products online only, through ecommerce. This ensures that it doesn’t have to worry about the costs of warehousing and distribution.
“We are an e-commerce company. We live on the internet. We are selling exclusively through e-commerce. And the price there can be much lower, because the price on e-commerce is essentially fulfillment and shipping cost,”

explains Hugo Barra, VP Global, Xiaomi while exclusively speaking with YourStory.

Xiaomi also shuns traditional models of advertising and depends solely on Social Media marketing and word-of-mouth.
We don’t invest in traditional marketing. We live on the social media which is a lot less expensive to us.

Unlike other bigger players who discontinue their models after 6-8 months in the market, Xiaomi sells it products for upto 18-20 months after launch. This means that, in accordance with Moore, the price of the individual components go down while the price of the phone remains constant throughout.

But the most important thing to note is that Xiaomi is a 'mobile internet company' . It is looking to make money, not on its hardware, but by selling apps, games and special Android themes and Internet services on top of its custom MIUI.

What do they cost to make?
Xiaomi’s latest flagship handset, the Mi 3, has the features you would expect from a high-end phone. It has an Snapdragon 2.3 ghz processor, a 5-inch 1,920 by 1,080 pixel screen, and a 13-megapixel rear camera, all fitted together in a metal casing.
But even though Xiaomi maintains low prices for its phones, it’s still able to extract some profit from their sale, according to analysts. In the case of the Mi 3, the device itself cost something less than $200 and the tegra version as $157. That profit margin, however, is much lower for the Redmi phone,  estimated cost $86 to build, but is priced at about $113.

Selling Out Dated Devices in INDIA??
  • Redmi 1s - May 2014
  • Redmi Note - Mar 2014
  • MI3 - Dec 2013
  • Redmi Note 4G launched in Aug. 2014

These are not outdated phones folks. Compared to other companies, Xiaomi is selling you still relevant and the same stuff they selling world wide. Still 90% of their revenue is extracted fromCHINA.

Pricing In India Compared to China
Mi 3
Xiaomi has slashed the price of the 16GB Mi3 from $327 to $270, while the 64GB model retails for$320.
Which was Rs 14000 in India which is roughly = 226.538 US Dollars. It was a promotional launch so yes I agree they priced a super cheap device cheaper, talking about the price.

Redmi 1s
Launched Price in China $113
Launch Price in India $100

Redmi Note 4G
Which entered INDIAN Market quite early.
Launch price in China $162
Launch Price in India $162
And Now
Which is almost priced the same
Cost Around 19300 inr in CHINA and 20000 in INDIA.

Looking at the Chart of SD 801 Devices sold in INDIA, Mi4 is still the cheapest of all. I have seen many people comparing it with oneplus one. I Don't Deny Oneplus is an Epic device Priced low but what about the quantity.
The Number of devices sold by oneplus is what Xiaomi might cover in the first few sales.1.7 GHz Octa Core Kirin Processor on the Honor 6 is simply not comparable to the Snapdragon 801 and Lenovo Vibe x2 still runs on old Mediatek Octa Core Processor.
Mi4 is still the cheapest Flaghip with metal built comparing to other device not even running on good hardware like samsung A5,
costing more than 25000 inr and still no where near.

Apart from this Mi4 promises alot,
  • A high end phone at a cheap price.
  • Beautiful design with premium looks.
  • Beautiful 5 Inch FHD display with good saturation and vivid colours.
  • High performance Processor.
  • Qualcomm snapdragon 801 processor clocked at 2.5 Ghz and Adreno 330 graphics along with 3 GB of RAM makes the device suitable for heavy multi-tasking and high end Gaming.
  • Amazing Camera
  • Long Battery Life

Users comparing with Mi3 there are alot of changes in both the devices From built quality to processor
There are few cities with 4G LTE facilities but still many of them have only HSDPA service and many complaints about low speed.


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