Xiaomi needs to reconsider its sales strategy.
Xiaomi makes enticing products that offer excellent value for money. Even though the brand does little to no marketing of its own (although that's changing in India), it is one of the most talked-about companies on social media on account of the hype generated around every product launch. By undercutting its competitors, Xiaomi attracts a significant amount of interest without advertising through traditional marketing channels.
That move has worked incredibly well for the brand over the years, but there is one area where Xiaomi woefully falls short when compared to its rivals: availability. Most of Xiaomi's latest products are available exclusively via flash sales, timed sales that are open for a short window once a week. This week, Xiaomi kicked off the first flash sale of the Mi Air Purifier 2, a $150 (₹9,999) smart air purifier that comes loaded with a slew of features that were previously limited to products that cost thrice as much.
I was very interested in buying Xiaomi's air purifier. Air quality in most parts of India has deteriorated over the last few years, and while the situation isn't as dire in Hyderabad as it is in Delhi, I wanted to get an air purifier to see if it made a tangible difference. I logged into the Mi Store app and waited for the sale to kick off at 12 p.m. IST. I hit refresh at 12 p.m. only to find that the air purifier was already out of stock.
Xiaomi's products are often sold out in under 10 seconds.
This isn't an isolated incident. I recommended the Redmi Note 3 to a relative earlier this year, and he tried — and failed — to buy the phone via weekly flash sales. He ended up getting a Lenovo K4 Note. Incidentally, the K4 Note was also limited to flash sales during the first month of its launch, but Lenovo was quick to make the phone available for everyone to purchase. Xiaomi did the same for the Redmi Note 3 in April, but availability issues lingered.
Xiaomi's latest entry-level handset, the excellent Redmi 3S is in the same boat. The phone made its debut on August 3 and went on sale starting August 9. As you can imagine, the phone's availability is still limited to flash sales.
Xiaomi's products are priced close to their manufacturing cost, and as such the brand limits production to tens of thousand of units initially, eventually ramping up production over time as costs come down. It makes sense for the company to follow this approach as it allows Xiaomi to eke out maximum revenue from its phones. However, it means that early adopters looking to get their hands on Xiaomi's latest products have to put up with frustrating availability issues.
Flash sales are bad for Xiaomi's core audience — early adopters.
On average, Xiaomi receives millions of registrations for a flash sale, but it only makes about 50,000 units of a particular device available. The move also works out to XIaomi's advantage, as the limited stock is usually sold out in under five seconds. But, by forcing users to jump through several hoops to get their hands on its latest devices, Xiaomi is creating a bad purchase experience for a majority of potential customers.
We're already starting to see brands move away from flash sales. Lenovo's Z2 Plus offers excellent hardware for its asking price of ₹17,999 ($270), and the phone is now available for purchase on Amazon India in general sale.
Xiaomi claims to be one of the largest manufacturers in the world. It's time it started acting like one. As for an air purifier, I'm going with Philips. They've been making air purifiers for far longer than Xiaomi, and if their lighting products are any indication, I can look forward to excellent customer service.