India is currently one of the fastest growing handset markets in the world. According to a recent report by wearesocial on Social, Digital and Mobile landscape in India, it was found that in a population of more 1.25 billion, only 349 million are the unique mobile phone users which account to only 28% of mobile penetration. This itself suggest the BIG opportunity that the country will provide in near future to all the handset manufacturers across the world to sell their products and make a lot of money. There was a time when almost every household had a Nokia phone but owing to its persistence for focusing only on feature phones without double-sim functionality as well as non-android based smart-phones, its market share fell which provided an opportunity to other players like Samsung to enter & grow in the smartphone category rapidly. This also gave an opportunity to some of the Indian handset manufacturers like Micromax, Karbonn & Lava to enter into this growing industry and provide android-based smartphones at relatively low-prices. And now, according to a recent report from counterpoint market research firm, while Samsung still leads Micromax in the smartphone category, however Micromax has beaten Samsung to become the overall biggest mobile handset vendor in India!
Last month was full of buzz about the entry of Xiaomi (pronounced as Shiao-Me), famously called as ‘Apple of China’ in India. The company partnered exclusively with Flipkart.com to sell its products online. Till now, Xiaomi Mi 3 went on sale thrice i.e. on 22nd July, 29th July and 5th August and the next one is due to happen on 12th August. To buy, a user has to pre-register himself/herself before every sale irrespective of the fact whether he/she has registered before. However, pre-registration won’t guarantee you a unit but will only mean that you’re eligible to buy the phone.
During the first sale, Flipkart couldn’t even handle the traffic and the site crashed temporarily. Within 40 minutes, Flipkart claimed the Mi 3 was out of stock. The second batch for 29th July sale apparently got over in five seconds. And, the third batch couldn’t even stand that & got over in just two seconds. This thing brought too much of negative feedback from the potential buyers online (including their Facebook page). Highlighting some of it here:
So, what do you think? Is Xiaomi creating an artificial shortage and hence a demand which is totally un-called for which could even be a part of its marketing strategy OR the company seriously didn’t expect the demand?
In my opinion, it’s more to do with its marketing strategy rather than matching up the demand with the supply. With the kind of price-point (INR 13,999) and the great features which the product boast of, I’m sure the company would definitely had the idea of the demand that would get created.
Adding on to that, providing the product only to a few customers will sustain the aspirational feel of the brand / product. These customers will mostly be the so-called early adopters of the technology and they will be the ones who will write about the product’s features & specifications everywhere online (Facebook, Twitter, Tech websites, Blogs, etc.). This will not only help the company to create the so-called user-generated content (UGC) but will also result in spreading the same without much budgets.
So, do you think Xiaomi is doing the right thing to enter into a country like India with low inventory and that too through only online-selling model? Shouldn’t it would’ve entered with physical stores where potential customers can go, see the product and then purchase it which is what Samsung did few years back.