Management
Xiaomi, the trendy 5-year-old Chinese company making smartphones, wearables and electronics, relies much more on word of mouth than advertising. It's famous for asking fans to design social media content and organize brand gatherings. In that respect, it's China's Tesla: so cool it doesn't need ads.
So it was surprising last week when Xiaomi decided to buy an entire front page on The Times of India to plug itself. A senior Indian media executive said Xiaomi's nationally run ad on the front page and page 2 in the Indian newspaper would have cost $330,000 to $350,000.
Commentary about Xiaomi often remarks on how it eschews advertising to pass the savings on to consumers. After Xiaomi global VP Hugo Barra showcased the ad on Twitter, a few people complained. Others remarked on how the buy showed what power print still has in India, one of Xiaomi's biggest markets. (The company is called Xiaomi; the brand is called Mi.)
A spokesman for Xiaomi (pronounced "shee-ow-mee") declined to comment, saying he wasn't informed about advertising strategy. It wasn't clear whether the ad signaled an experiment or a change in direction.
Despite its reputation, Xiaomi has actually made big ad buys before – including one absolutely massive one. In China in 2014, it bought airtime ahead of the annual lunar New Year gala on Chinese state TV, CCTV, which has more viewers than the Super Bowl. GroupM has said the price would have been $3.7 million per 30 seconds. The company is said to have scrimped on the money it might have spent hiring an agency on that project. The industry wasn't impressed by the end result.
Questions to be solved:
Question 1. Identify Xiaomi’s main competitors in China, India and the United States. And
Describe how big each company is in each of those markets in terms of sales, market share, units sold and any other metrics you feel help describe the competitive landscape.
Question 2. Outline what you think Xiaomi’s main strategy is in China, India and the United States.
Question 3. Explain why Xiaomi has decided to advertise. Do you think that this shift in strategy will be successful? If it’s successful then Why or if its not successful then why not?
Question 4. What will be the key measures of success for Xiaomi’s strategy?
