Currently the fifth largest smartphone manufacturer in the world, Xiaomi is well-known for its cheap and affordable smartphones. In a growing market, they are sustaining, profiting and keeping up with the demand. Let us have a look how.
Why are Redmi smartphones so cheap?
- Understanding of the market
Xiaomi has a great understanding of the Indian market. India is a developing country. In 2017, the number of smartphone users was around 350 million and by 2019, that number crossed 500 million. With increasing demand, Xiaomi tapped into the essential corner of the market that was looking for cheap smartphones, which function efficiently.
- Flash sale
Xiaomi smartphones are typically known for going out of stock soon, and this has been a constant complaint from the customers. But this is actually a strategy from Xiaomi to reduce the maintenance and storage cost of phones. Their strategy is to mainly focus on flash sales, where they sell a huge number of their phones at attractive prices, all at once!
- Only online sale
One big decision by Xiaomi was to not meddle into the offline stores, thus cutting off the money that most companies have to give to retailers. In most cases, to sell a smartphone worth Rs. 15,000, retailers would ask for a Rs. 1,000 or 1,500 profit. By making the sales online-only, that cost is saved by the brand.
- No monetary advertisements
Most leading smartphone brands in India use famous faces as brand ambassadors to advertise for their products, and that can cost even up to Rs. 300 crores. This is a strategy that is not picked up by Xiaomi, because that reduces the cost of their phones by around 15 to 20%.
- Influencer work
Since Xiaomi does not invest in monetary advertisements, they save up a lot of money. But zero advertisements cannot simply work. The way chosen by Xiaomi was to collaborate with social media influencers. A lot of brands have actually taken this less orthodox way of promoting their products, which is effective yet not as costly. And this seems to be working for Xiaomi perfectly.
- Zero margin profit
Xiaomi does not make its profits from selling its phones. It sells them at zero margin profit, which is what makes the smartphones extremely cheap. However, the way Xiaomi earns its profits is mainly through affiliate marketing. Because they are partnered with companies like Amazon and Flipkart, for every purchase made, a share of the money goes to Xiaomi. Other than this, they also earn from their accessories and by selling apps and themes on the MI store.
- Low cost of logistics
Because Xiaomi sells its smartphones through flash sales, they don’t have to spend money on maintaining offline stores, warehouses and transportation costs.
Redmi Phone Recommendations
If you’re looking for a smartphone to buy under a budget, you don’t need to look past the Redmi smartphones. Here are a few you can consider.
Powered by the Qualcomm Snapdragon 660 SoC, the Redmi Note 7 is one of the best phones under 15000 INR.
The Redmi 9 Pro is an excellent smartphone by Redmi. Priced at Rs. 12,999, the Redmi 9 Pro offers you a bunch of features including a quad-rear camera set-up with a 64 MP primary camera, 6 GB RAM, and a 128 GB storage capacity.
Other smartphones by Redmi that are worth your consideration would be the Redmi Note 8, Redmi Note 7, and Redmi Note 7s.
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