The times in which Xiaomi made its way into the smartphone market with the simple positive word of mouth of its users, due to the excellent quality / price ratio of its devices, are definitely far away. Yet this winning strategy, which therefore also allowed final costs to be contained, has changed.
We have reached a point where the brand led by Lei Jun is the second in the sale of cellular devices worldwide, surpassing even Apple, but the success is not only due to quality and low prices compared to direct competition, but also to many marketing operations. In short, Xiaomi spends money on advertising, but how much does it affect the final product intended for the user?
Does Xiaomi spend too much on advertising? Here's how it affects the final price of smartphones
As already mentioned at the beginning of the article, Xiaomi really spent in its early years poco if nothing in advertising campaigns, investing only in launch events for their products. We could call it a small business, that of Xiaomi at the beginning which based its sales philosophy on 4 key points:
- Almost exclusively online sale: this has helped to reduce distribution costs and expenses in commercial establishments;
- Smartphone with an excellent quality / price ratio: devices were offered with the same hardware specifications and performance and often better than the competition but at a much more honest and accessible price;
- Word of mouth advertising: users are the only advertising that the company has relied on. The positive opinion of users with friends and relatives has generated trust in the brand (on the other hand, if a friend or relative is promoting me a product, I don't think I'm going to get caught). This is the cheapest and most reliable type of advertising of all, although not as straightforward;
- Advertising on social networks: without paying for ads or anything like that, social media have contributed to the spread of the brand, which has received more and more consensus from users who subscribed to the various profiles.
With this strategy, Xiaomi has managed to rapidly grow in popularity and has begun to position itself among other large companies in the industry. However, becoming popular as a brand necessarily led to a change of strategy, with consequent influence on final prices.
The globality of the brand has meant that advertising that was once practically supported only by users, became increasingly aimed at surprising, proposing marketing campaigns to say the least. poco "Crazy", like the one we see above in the Mi 10 Pro promo video. It is true, there are successful results for the company and how, but the amount of money the company is investing in advertising is in increase and somewhere this money must come back.
We could take the year 2019 as a point of no return, when Xiaomi presented the Mi 9, device to say the least poco incredible for specs and quality. To promote it, Xiaomi launched a video focused on the European market that showed all the advantages of this smartphone, but above all it consulted distribution giants such as Amazon and MediaMarkt. The result was a full house in a very short time, we are talking about minutes, but the Chinese company realized that this success could not be sustained without an actual profit.
A policy that many companies follow when they want to be known and with that marketing move Xiaomi made itself even more noticed in the world. But with the year 2020 and the debut of Xiaomi Mi 10 Pro, the advertising costs were even higher, precisely in consideration of the video above, in which a sample of Mi 10 Pro was launched in space to demonstrate the 108 MP camera potential.
And the advertising extravaganzas have continued until today, where astonishing to demonstrate has become the daily bread for commercials and advertisements in the sector. But let's get to the point, that is, did this change affect sales?
Yes, even if Xiaomi still offers devices at a very good price, but this mainly happens with secondary brands such as Redmi and POCO, because for some time now the revolutionary prices of Xiaomi branded smartphones are just a thing of the past and why it is linked not only to the advertising we talked about but also because now it is no longer sold only online, on the contrary Xiaomi holds a an increasing number of official physical stores around the world, with prices that are often too high compared to online offers. In this regard, we recall the controversy over the launch prices of the Mi 10 series and the latest Mi 11, once criticized by the company's executives against competitors.
But the positioning of brands such as Redmi and POCO has divided the company, which therefore cannot cannibalize itself. Of course, behind the increase in the prices of Xiaomi smartphones, other reasons and costs unknown to us could be hidden, such as the increase in the prices of raw materials, for example the global chip crisis or perhaps the time has come for the company to position itself in the its actual target of belonging as it happened for OnePlus, born as a company that offered excellent low-cost smartphones while now the cost is decidedly prohibitive. We hope for a change of course, also because to be honest to the end, Xiaomi has shown that it really knows how to do it right in the mid-range and entry level segment.
