Xiaomi has expanded internationally using several key strategies: 1) The "triathlon model" integrates hardware, software, and internet services to generate profit from services rather than just hardware. 2) Aggressive pricing allows Xiaomi to undercut competitors by pricing products close to manufacturing costs. 3) Social media and "hunger marketing" create viral buzz among youth to fuel sales and gather customer feedback.

1. Xiaomi’s
Internationalization
Strategy
Presented by:
Ajit Kumar
Abhishek Hawal
Saurabh Kumar
Janhobi Dey
Dhara Madhvani

2. Introduction to Xiaomi
 Xiaomi Inc. headquartered in Beijing China, is a privately
owned electronics company that designs, develops, and sells
smart phones, mobile apps, and other technology products.
 Began its operation in August 2010 with Android based
firmware MIUI (pronounced as “Me You I”).
 Expanded into other consumer electronics including tablets,
wifi network routers, Smart TV, Set-top box, cloud storage and
cloud computing service, instant messenger, and power bank.

3. Continued..
 International headquarter in Singapore for its global
expansion activities.
 Six storage centers
 18 flagship stores
 436 after service outlets in China

4. What is
Internationalization?
 The designing of a product in such a way that it will meet
the needs of users in many countries or can be easily
adapted to do so.
 It is a process of increasing involvement of enterprises in
international markets.
 For example, an internationalized software program
would need to localized to display the date as Nov’14 for
use in USA and as 14 Nov for use in England.

5. Strategies Adopted by Xiaomi
 The Triathlon Model
 The Aggressive Pricing Policy
 Focus on Social Media and Hunger Marketing Tactics
 “Customer-obsessed” strategy
 The Limited inventory concept
 An eco-system of Smart products
 Joint Ventures

6. The Triathlon Model
 It is an integration of software, hardware and internet service.
 The three pillars to its strategy are:
 Hardware as a service strategy
 An e-commerce sales model
 Focus on software, services and content
 Xiaomi has a different business model than Apple or Samsung. Apple makes
its profit on the hardware, while Xiaomi makes their profit on services.

7. Aggressive Pricing Policy
 Differentiation by Cost Leadership
 “Offering products at prices as close to the cost, rather
‘Bill of Material’ as possible.”
 The Mi3 handset from Xiaomi sells for $327, whereas
products having similar specifications, from Apple or
Samsung are sold at around $870.

8. Focus on Social media and Hunger
marketing tactics
 Xiaomi relies basically on internet to market its products and
fuel sales.
 It leverages social media and word of mouth marketing to
create a viral effect among the internet acquainted youth.
 “Customer obsessed” strategy: Taking customer feedbacks to
keep improving.
 It runs frequent events such as ‘fan festival’ online shopping
event with discounts and coupons.

9. The limited Inventory concept
 Huge cost- Carrying cost inventory
 When Mi3 were launched initially, the first batch of 1
lack units sold out in less than 2mins and the company
took another 7 days to release 1 lakh more units, which
where then immediately sold out again
 Xiaomi undercuts inventory cost by maintaining a very
low inventory

10. An eco-system of Smart products
 Smartphone Industry is expected to saturate in coming
few years
 Smart Family: A service platform for better potential for
growth
 Xiaomi provides an integrated model of hardware and
software.

11. Joint Ventures
 Partnered with telecom carriers such as Hutchison
Whampoa Ltd and PCCW Ltd in Hong Kong.
 Flipkart in India
 Starhub in Singapore
 Online venture with Jabong.com

12. Arenas
Vehicles
Differentiators
Staging
Economic
Logic
 Republic of China, Philippines,
India, Indonesia, Thailand, Vietnam,
Russia, Turkey, Brazil, Mexico
 Smart phone, Smart TV, Wi-Fi
router, set-top box, cloud storage,
power bank, etc.
 Innovative MIUI interface
 Internal Development: MIUI
 Strategic Alliances: Hutchison
Whampoa Ltd, PCCW Ltd,
Flipkart, Starhub, Jabong.com,
Tmall.com
 Pricing Policy
 E-Business Capability
 Promotional activities
 Image: Apple of China
 Aggressive design and
marketing strategies
 Joint ventures and alliances
with several telecom
companies and e-commerce
websites
 Premium pricing over accessories.
 Volume selling
 Preferred company due to innovative
technology at low price