Xiaomi has been quite popular with its smartphones. The Note series, the flagship Poco F1 and the affordable Redmi phones are quite noteworthy. The reason for such popularity that these phones get sold out within seconds is because of its affordable price. When we say its affordable, we mean better specifications at a cheaper price. Now, the question is why are these phones so cheap? Or it can be rightly put as to how do Xiaomi offer such good specifications at a low price in their smartphones?
This is an interesting question and to answer it I may need to ask you a few questions too. How many of you have seen a billboard on roadside having Xiaomi's phone advertisement? How many commercial ads are put up on the show promoting their smartphones?
I hope you got my point. Xiaomi, in the beginning, refrained from heavy promotions or any advertisement of its product. They relied more upon word of mouth promotion by improving its service and products performance. Doing so, they saved millions of dollars, if not billions, from their advertising policy. Unlike other popular brands, the phones manufactured by Xiaomi are not advertised aggressively. The savings on this domain are open for development purpose which enables them to offer better specs and maintain their brand value as well.
Not only its advertising policy, they even have a unique sales policy right from the beginning. Earlier, they did not have many MI Stores in the country and almost all their phones were sold online. This enabled them to save on retail commission and all the cost of maintaining such stores.
Some of you might think, how weird such policy is - no promotion, no offline stores? But, apart from word of mouth promotion they took good advantage of promoting it through Flipkart & Amazon. Besides, did I mention that their phones are mostly put on Flash Sales? That itself creates the hype and make their phones go out of stock within seconds.
Redmi users might have also seen ads on MIUI in the Redmi Phones. This also contributes to an alternative revenue source for the company. If compared to Samsung and other popular smartphone brands, the Xiaomi phone enjoys many advantages due to such policies.
Thus, we can easily make out from these points how the company offers their phones at cheap price and yet earns profit.