Meet the next big global brand

We’ve mentioned before that Xiaomi, a big Chinese brand is coming to the Philippines. While Xiaomi is known in tech circles in the PH, they’re relatively unknown to the layman. The Chinese company has grown a lot since its inception in 2010, and it’s important to see where the company came from so we can understand what they’ll be bringing to the PH market.

Xiaomi was founded back in 2010 by ex-Kingsoft CEO Lei Jun as a software company that was aimed at creating a new, custom ROM for Android. This ROM, dubbed MIUI, was very successful because it offered additional services that Google didn’t offer at that time. From there, the company entered the hardware market in 2011, offering the highly disruptive Mi One phone. The Mi One offered a fantastic spec sheet at a price that was hard to beat, setting the tone for the pricing of the company’s phones moving forward.

Xiaomi is known in China for offering smartphones with very high specifications at rock bottom prices. The company prides itself in providing disruptive pricing for its products compared to the competition, which is fantastic news for a market like ours that’s very price sensitive. It’s said that the company sells its products at a razor-thin margin, opting instead to offer those devices for longer periods of time and make money selling accessories for those products. The company operates on a lean business model, sells most of its wares online (it has no physical store) and almost never advertises, hedging heavily on social media and word of mouth to spread the word about its products.

This strategy seems to work. Xiaomi recently offered their Mi 3 smartphone to the Malaysian Market, pricing it at an aggressive 889 RM or around Php 12076. The Mi 3 sports a Qualcomm Snapdragon 800 processor, 2GB of RAM, 5-inch full HD display and a magnesium alloy frame. When it went on sale on Xiaomi’s Malaysian website, stocks ran out within 15 minutes. Its Mi powerbank, which is rated for 10400mAh but priced at a ridiculous RM 36 or Php 489, sold out within 1 minute and 2 seconds, a testament of just how in demand their products are.

Of course, that strategy may not be the best here in the Philippines. Most people still buy their products at a physical store, and many are either reluctant to buy in online shops or simply don’t have the capacity to pay using the traditional payment gateways (no credit card). Will Xiaomi re-invent itself for the Philippine market? Hard to say. We’ll definitely know when we meet the company tomorrow afternoon.