This article illustrates the marketing mix framework of Xiaomi, and explains key marketing strategies that contribute to the Xiaomi’s business success. The article is primarily useful for the market researchers, entrepreneurs and strategic management/marketing students, who want to learn about the marketing strategies of successful brands like Xiaomi.
1. Introduction
A powerful and well-integrated marketing-mix is deemed critical for business success. In this article, we have discussed the marketing-mix of Xiaomi.
The marketing-mix framework has four components- product, price, place and promotion. We have first analyzed each marketing mix component, and then have discussed its role in making Xiaomi a successful brand.
Click here to get the basic information about the Xiaomi company.
2. Xiaomi marketing strategy
2.1. Xiaomi product strategy
1. Xiaomi Product Mix
Xiaomi mainly offers hardware, software and internet services. The company has a vast portfolio that includes:
• Smartphones
• Tablets
• Laptops
• Smart TVs
• Wearables smart watches
• Power banks
• PC and TV accessories
• Camera drones
• Routers etc.
By pursuing the product diversification strategy, Xiaomi sells some unrelated product as well, like- apparel, fashion accessories, lifestyle products and smart home accessories like water purifier, vacuum cleaner and rice cooker etc.
2. Xiaomi Unique Selling Proposition
The unique selling proposition of Xiaomi is- offering high product quality with great specs in affordable prices.
Despite charging low prices, Xiaomi fulfills its promise of offering high quality. Due to efficient product design and quality, Xiaomi won more than 145 industrial design awards for its cellphones, TVs and speakers.
3. Xiaomi Segmentation, Targeting and Positioning
| Xiaomi segmentation strategy | Xiaomi target market | |
| Segmentation type | Segmentation criteria | Targeted segment |
| Geographic | RegionDensity | Global (70+ countries)Both- urban and rural |
| Demographic | Age Gender Occupation | Young to middle agedBoth- males and femalesStudents, employees and professionals |
| Behavioral | Benefits soughtPersonality | Cost attractivenessEasygoing and ambitious |
| Psychographic | Social class | Working, middle and upper middle class |
4. Xiaomi target market
Overall, Xiaomi target market includes:
• Tech savvy customers, who are in age group of 18 to 35 years;
• And are from working/middle class;
• Want good quality and impressive specs in affordable price;
• And perceive market leaders like Apple and Samsung as overpriced.
Following table shows the target market of each Xiaomi sub-brand:
| Sub brands | Target market |
| Redmi | Budget conscious |
| POCO | Budget conscious |
| Black shark | Gamers |
| MI | Premium segment |
5. Xiaomi customer profile
A recent study revealed that Xiaomi customer base includes:
- Predominantly male users (69.1%)
- Mostly young to middle aged
- 31.7% from 30 to 34 bracket
- 25.4% from 25-29 bracket
- 14.2% from 19 to 24 bracket
- 6.5% are above 40 year old
6. Xiaomi brand positioning
The Xiaomi brand positioning is- a high-tech, yet affordable brand with impressive specs that bridges the gap between mass market and high-end market segment.
7. Xiaomi global revenue mix
Following graph shows the revenue that Xiaomi made in 2022 from different product categories:
Source: Counter Point
The graph shows that from 2021 to 2022, revenue from IoT, internet services and others category rose from 38.7% to 39.6%, while revenue from smartphones declined from 61.3% to 60.3%.
After smartphones, the IoT sales made the highest contribution, followed by internet services, and ‘others’ category.
Xiaomi partnership with Microsoft is also allowing to brand to generate revenue from cloud services.
8. Key takeaway
• Good quality with impressive specs (fully customizable MIUI) at affordable prices drive the Xiaomi to the top spot.
• Product strategy well-aligned with the target customer needs.
2.2. Xiaomi pricing strategy
1. Xiaomi pricing strategy
Xiaomi adopts penetration pricing strategy to expand the market presence through aggressive price reductions. The price penetration strategy enables Xiaomi to gradually gain the foothold in the competitive smartphone market by offering affordable alternatives to expensive phones without compromising over features and quality.
2. Xiaomi pricing objectives
By charging low prices, Xiaomi adopts ‘low price today and gain later’ mindset. The key pricing objectives are:
• Penetrate deeper into budget conscious segment
• Charge low price for device, and earn revenue from accessories, services and apps
• Benefit from the price elasticity of demand
• Expand reach to growing mass market
3. How Xiaomi charges low prices?
Brands take cost cutting measures to charge low prices:
• Xiaomi spends most of the money on production and designing
• Spends more on online, cost efficient promotion strategy
• Reduces logistics costs by partnering with online retailers- Amazon and Flipkart
4. Xiaomi price range
Xiaomi smartphones are available in a wide price range of CNY 180 (Xiaomi Mi Max 3) to CNY 6,825 (Xiaomi 13 pro).
5. Xiaomi mission statement
Xiaomi mission statement is well-aligned with its affordable pricing strategy:
To make quality technology accessible to all
6. Key takeaways
• Cheap prices do not always mean cheap quality. By adopting long-term view, Xiaomi charges low prices to grab market share from competitors.
• Initially, Xiaomi entered the market with low-end phones, and today, it is world’s third largest smartphone brand, with strong presence in both- low and high-end segments.
2.3. Xiaomi place strategy
1. Xiaomi distribution strategy
Initially, Xiaomi adopted online-only distribution model. For instance, when Xiaomi entered in India, it gave exclusive distribution rights to Flipkart.
Later, Xiaomi shifted from exclusive to selective distribution strategy, and entered in distribution contract with Amazon and Snapdeal.
In 2021, Xiaomi announced to ramp up the offline distribution.
in India and other countries.
2. Xiaomi distribution channels
• Official website
• Official store outlets
• Online distribution partners
Here are online distribution partners of Xiaomi all over the world:
Here is the list of online distribution partners for Xiaomi smart devices:
3. Xiaomi distribution network
Xiaomi products are available in more than 100 countries. Xiaomi has strong presence in the China, India, Singapore and many other emerging Southeast Asian countries. Its online distribution network is spread in all over the world to ensure maximum coverage.
Following graph shows the Xiaomi’s presence in top ten Asian-pacific countries:
Source: Statista
To know the overall Xiaomi market share, click here.
4. Key takeaways
Xiaomi distribution strategy is well-aligned with its product and pricing strategy. Strong e-commerce presence reduces the logistics costs that allows Xiaomi to charge lower prices without compromising over quality.
2.4. Xiaomi promotional strategy
1. Xiaomi advertising strategy
Xiaomi uses both- online and offline promotional channels. However, its main focus remains on the online marketing.
Initially, Xiaomi only focused on inexpensive social media marketing tactics. But in 2016, Xiaomi revised its promotional strategy, and started investing on traditional advertising channels to achieve international expansion objectives.
2. Xiaomi traditional advertising
Xiaomi spends on the TV and print advertising to reach the mass market. Here is an example of Xiaomi advertisements in newspapers and billboards:
Other than direct advertising, Xiaomi generates word of mouth through PR story-telling advertising technique:
The story-telling technique generates the WOM by keeping the readers engaged.
In an effort to cut costs, Xiaomi mainly focuses on the social media marketing strategy. The company holds strong presence on famous social networking sites:
| Social media platforms | No. of followers |
| Xiaomi Facebook | 15 million |
| Xiaomi Global Instagram followers | 4.6 million |
| Xiaomi Global twitter followers | 4.3 million |
| Xiaomi TikTok | 2.9 million |
| Xiaomi Pinterest | 9.4k |
4. Xiaomi online brand community
Xiaomi has large online brand community that spreads e-WOM about the brand over different social networking sites.
The company has on online MI brand Community App:
The community members ask questions, and help each other in solving the problems. The community provides a personal space to users where they can share their experiences and solutions.
Xiaomi frequently launches social media campaigns, and arranges contests and quizzes to generate e-WOM:
In 2019, Xiaomi launched its Mi 10 on Twitter in a live video. The video got close to 5 million views, and 50 million impressions, with 60% increase in conversion rate.
6. Xiaomi hunger marketing strategy
Xiaomi adopted ‘hunger marketing strategy’ to achieve digital marketing objectives:
Hunger marketing required Xiaomi to:
• Understand target customers’ emotional needs
• Create an in-purpose supply shortage
• Create buzz and evoke desire to own Xiaomi smartphone
7. Xiaomi celebrity endorsement strategy
Xiaomi invests on celebrity endorsements, particularly in India to capture market share.
In India, Ranveer Singh is the face of Xiaomi-Mi:
8. Xiaomi influencer marketing strategy
Xiaomi identifies and collaborates with tech influencers to reach the mass market.
Xiaomi understands the importance of choosing the right influencer. It collaborates with three types of influencers:
• Professional talent (e.g. Hello-Mate TV- a property related YouTuber)
• Entertainment talent (e.g. Healo Diary- a food vlogger)
• Lifestyle talent (e.g. Ada Pong- Vlogger)
9. Promotional discounts
Xiaomi offers promotional discounts and flash sales to drive the sales. The purpose of offering flash sales is to keep brands under discussion, and grab the attention of potential customers by creating a sense of urgency.
Although, many smartphone brands offer flash sale offers, Xiaomi took it to extreme. In UK, Xiaomi grabbed everyone’s attention by offering $1 flash sale:
Source: BBC
Read full story here
10. Xiaomi marketing budget
In response to the rising competition and changing consumer behavior, Xiaomi is gradually increasing the market budget every year.
Following graph shows the Xiaomi marketing and advertising budget from 2017 to 2021:
Source: Statista
11. Key takeaways
Xiaomi blends traditional and digital marketing strategies to engage customers, and create brand awareness. The focus on digital marketing helps Xiaomi save costs, and expand the reach to target market.
3. Recommendations
• Focus on related diversification to earn more revenue from services and accessories
• Expand the official outlets in and outside China
• Increase product variety to widen the price range, and ensure maximum coverage
• Continue investing on digital marketing activities to interact and engage with customers
• Increase marketing budget for traditional marketing activities as well to fuel the international expansion
• Expand the use of influencer and celebrity endorsement strategy in other emerging markets as well (other than India)
4. Conclusion
To sum up, Xiaomi presents a success case study of how brands can achieve enormous success through a well-integrated marketing mix.
Xiaomi understands the market pulse, and acts accordingly. To know about Xiaomi, read our article on Xiaomi SWOT analysis.
5. References
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Xiaomi Updates: Q3 2022 – Counterpoint Research. (2022, December 9). Counterpoint Research.
Admin, & Admin. (2023b, January 12). Microsoft SWOT Analysis 2023 – A Detailed Analysis by Experts. Strategy Finders.
Admin, & Admin. (2023b, January 11). Comprehensive Analysis Of Walmart Marketing Strategy. Strategy Finders.
Statista. (2023d, March 20). Market share of Xiaomi smartphones in APAC 2022, by country.
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How Xiaomi achieved close to 5 million video views by launching its smartphone live on Twitter. (n.d.).
Kelion, B. L. (2018, November 12). Xiaomi criticised for UK smartphone £1 flash sale. BBC News.
Kelion, B. L. (2018b, November 12). Xiaomi criticised for UK smartphone £1 flash sale. BBC News.
Statista. (2022d, May 13). Xiaomi’s selling and marketing expenses 2017-2021.
