Bad Press to Spoil Xiaomi’s Next Flash Sale in India?

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November 2, 2014 by ...

Xiaomi’s flash sale model is a cornerstone of their business model. Flash sales is part of hunger marketing, whereby a limited number of phones are released for sale. Think of it like the K-mart ‘blue light’ special of old. Using this model, Xiaomi has been able to ‘luxurize’ a commodity, cell phones. This created tremendous brand awareness and demand for the phones in the PRC.

Flash sales in China
A few years back, there would literally be millions of people registering and prepaying for the ‘right’ to join the Xiaomi flash sale which was essentially a lottery. The day of the flash sale, names of the ‘winners’ were chosen. No one knew if their name would come up and the buzz was intense. If a customer’s name was not chosen on that date, their money was not returned. They were put on a waiting list. Some would receive a handset one week or one month in the future.

The reaction to this sales strategy was incredible. Not only did it build brand image, but buzz as well. Buzz, it would seem, is part of the reason for Xiaomi’s success.

Of late, however, ‘buzz’ and ‘problems’ are two words newly associated with the phone manufacturer. The impact of this bad press has not killed off interest in the phones, but dampened it somehwat.

November 4, Xiaomi flash sale in India
There have been eight Xiaomi flash sales in India and none of them a failure. Each event saw more subscribers than handsets and most were sold out in seconds, as is shown here.

In an attempt to maintain its momentum, Xiaomi has planned another flash sale for this Monday. Nervous energy could have something to do with this, however.

Xiaomi and bad news
Since arriving on the scene, Xiaomi has been both extolled and excoriated in the news. The company has been called the ‘next Apple’ and praised as a true innovator.

On the negative side of the ledger, they have been called designthieves’ and ‘lazy’. People claim that Xiaomi customer service is negligent at best and non-existent at worse, and what it lacks in this area it makes up for in spades with data theft. As if this were not enough, the handsets reach a skin-sizzling 45 degree temperature making them more suitable for cutting metal than to be used as mobile communication devices. Software glitches cause system failures and a high percentage of the units ship defective or soon konk out after use.

These sentiments are not only confined China, but in India as well. Xiaomi’s two biggest markets have serious concerns about the phones.

What will happen on the November 4 flash sale?
Xiaomi has tried to shore up its image in India and address the concerns above. They have done everything from breaking bread with the Indian government, to issuing patches and band aids to salve burnt fingers. But is it enough?

If the last flash sale is any indication, India seems less enamored with Xiaomi than before. Sure twice as many people registered as phones were sold, but was demand as large? It does not seem so. In fact, gauging by the numbers, it would seem that Xiaomi is losing its luster. Perhaps all the negative press has taken its toll, or new players have entered giving Indians more choices. The only way to find out is to see what happens in the next big flash sale.


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