Why MI ( Xiaomi) phone is so cheap even with high conficuration ?
Main reason Xiaomi can sell phones at exceptional prices is that they don’t do much advertisements for their products.
When was the last time you saw a TV ad for Xiaomi? Probably never. They save up on the advertising costs and reduces the cost of the product.
This is also the main reason Oppo and Vivo sells the same spec phone for the double price of this. Oppo and Vivo are aggressively marketing their products in India, Vivo is the title sponsor of IPL and FIFA next year. Oppo sponsors jersey and other stuff for all IPL teams and Indian cricket team. And, most of the mobile stores in India now carries Oppo and Vivo branding. All of these costs are covered by us customers, as an extra premium on the product.
For Xiaomi, all the advertising cost is almost NIL compared to what Oppo, Vivo and Samsung have. That translates to lesser costs.
Another reason is that Xiaomi primarily sells its phones through online stores such as flipkart, Amazon and their own.com. This makes the normal commission for distributors and stores to NIL. They now sell devices through offline stores though, but with an extra amount of ₹500.
Also Xiaomi makes little a profit through their MIUI operating system through ads and promoted apps. You can find that in extra apps folder (you can turn that off too).
I hope you got an idea about how Xiaomi can sell at ultra cheap prices.
If you find my answer useful, do upvote it. 🙂
With Xiaomi gaining momentum at the expense of traditional OEMs such as Samsung, one might wonder what exactly is driving that onward march. Almost assuredly, the answer you will all reach is one: It’s all about the way its phones are priced. But, how? Here are few reasons:
- Selling the products online: Xiaomi’s products are pretty much exclusively sold through its web stores, which is a massive money saver. It entirely bypasses distributors and third-party retailers, both of which seek profits of their own and inflate the price.
- Radical Strategy: Xiaomi products remain on the shop shelves for about 14–15 months and then a new device is launched. They launch new gadgets at perfect time. Because the hardware components’ cost drops down the road, especially in an industry as heavily characterized by rapid improvements in technology. So, there’s need of a new high-tech mobile every year.
- Advertising: Xiaomi doesn’t spend money on traditional boost awareness, the company has relied on social networking sites, the press and its own customers, known as Mi fans(I am a Mi Fan :P), to help spread the word.
- Limited Units: Releasing only a limited quantity of phones each time it is launched, has been a staple of Xiaomi’s business that’s helped keep costs down. No extra-manufacturing.
This is how they keep the prices low and provide high-tech gadgets. I am using Redmi Note 3 for a year now, and it is working all fine. 🙂