Smartphones made by Xiaomi are almost all offered at low prices. Cheap in this case means that a cellphone with certain specifications is offered at a more affordable price than cellphones from other brands with the same specifications.
For example, cellphones from other vendors with Snapdragon 425 SoC specifications, 2GB RAM, 32GB ROM, 5-inch HD screens are offered at a price of 1.5 million to 2 million. But Xiaomi instead sells it for less than 1.5 million. The Xiaomi phone in question is the Xiaomi Redmi 5A which is priced at Rp. 999,000.
Another example of a cellphone is the Xiaomi Mi A1 which is sold at a price range of IDR 3.1 million. This Xiaomi Mi A1 phone carries a 5.5-inch Full HD screen, Snapdragon 625, 64GB ROM, 4GB RAM. With the same or almost the same specifications, products from other vendors sell them at prices approaching 4 million or more.
What Xiaomi has actually done is also done by local vendors in Indonesia. It’s just that the value of local brands is not strong enough and the build quality is doubtful. Unlike Xiaomi which has its own “value”. This Chinese vendor has become a hot topic among cellphone lovers. Even the mention of “The Next Apple” on Xiaomi makes people even more attracted to Xiaomi.
Apart from the brand value owned by Xiaomi, here are some reasons why the price of Xiaomi cellphones can be cheaper than cellphones from other vendors with the same specifications.
- Online Marketing
Xiaomi takes a modern marketing approach, namely through online media. Xiaomi phones are generally popular in cyberspace. Xiaomi does not promote in conventional media. Of course, promotion in conventional media requires high costs. That’s why Xiaomi prefers to sell online.
- Social Media Promotion
Xiaomi learned how to promote cheaply from a film by a Taiwanese director. Xiaomi took a group photo with the promotion of Xiaomi products at the top. The photo then appeared on Weibo, a social media flavored “Twitter” from China. The photo then went viral which had an effect on the popularity of the Xiaomi brand.
The same strategy was also applied by Xiaomi when entering Indonesia. Because in Indonesia, Facebook and Twitter have a large number of users, promotions were carried out on both social media.
By promoting themselves and being talked about a lot on social media, Xiaomi has become the topic of conversation for many people. It’s not strange that people who know Xiaomi first are those who are active on social media. With promotions on social media, of course Xiaomi can reduce costs for promotional purposes.
- Strategic Cooperation with Qualcomm
Almost all smart phones made by Xiaomi are equipped with a Snapdragon SoC. It turns out that the use of this Snapdragon SoC has a reason. Xiaomi has established a strategic partnership with Snapdragon SoC maker, Qualcomm. Thanks to this partnership, Xiaomi was able to get a cheaper Snapdragon SoC.
Reportedly, Xiaomi is the biggest Snapdragon SoC buyer. It seems that Xiaomi has promised Qualcomm big phone sales. It is for this reason that the price of Xiaomi phones can be cheaper.
- Few Profits, Big Sales
Xiaomi and Apple are both famous and both have die-hard fans. But the paths that Xiaomi and Apple take are different. Apple sells its products at high prices because they are indeed looking for big profits by promoting a selling value that is more than competitors. While Xiaomi actually sells its products at low prices.
Xiaomi’s target market, which is targeting the lower middle class, is a reason in itself. You could say that the target market for the lower middle class is Xiaomi’s marketshare. With a clear target market, Xiaomi is able to make a small profit. In fact, Xiaomi has stated that they will only earn 5% profit. But this meager profit does not make a loss because Xiaomi is able to sell their cellphones in large quantities.
- Profiting from Ads on MIUI
Because the profits are small and the price of Xiaomi phones must remain cheap, Xiaomi is looking for ways to find new advantages. One of them is by presenting advertisements on Xiaomi phones that carry MIUI. The existence of this advertisement is one of Xiaomi’s ways to profit and still maintain a cheaper cellphone price compared to other cellphones with the same specifications.
- Flash Sale and Hungry Marketing
Although Xiaomi was able to record a lot of sales, the way they sell with their customers applies the flash sale method. This flash sale method is a quick method of selling. It is proven that Xiaomi has always managed to sell out when holding a flash sale of their latest product.
This Flash Sale is generally done online by cooperating with well-known e-commerce companies such as Lazada, JD.ID, and Shopee. This flash sale strategy in the marketing world is called hungry marketing. That is, limiting the number of products during flash sales aims to keep the market curious about Xiaomi cellphones.
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