Environmental Analysis of Xiaomi Redmi

Environmental Analysis of Xiaomi Redmi

Xiaomi Inc. is the world’s 4th largest producer of smartphone in the world after Samsung, Apple and Huawei with over 5000 employees worldwide (IDC, 2015). Xiaomi Inc. was established in 2010 and has it’s headquarter based in Beijing, China. As of December 2014, Xiaomi has achieved the status of the most valuable technology start-up in the world after it successfully secured US$1.1 billion investment with a company valuation of US$ 45 billion (Shih, 2014). Xiaomi has provided the market with premium phones like Mi series and entry level devices like Redmi Note. The company is famous for providing devices with advance feature at an affordable cost. They have set very narrow profit margin and most of the revenues are from the softwares and services they provide after selling the hardware. They are more like internet and Service Company than a hardware company. To further reduce its cost they have a very simple way of packaging the product and they don’t even own a single physical store. The entire sales are done from the online stores.

In 2014, when Redmi Note was launched in India through Flipkart online store, 50,000 units in stock were sold in mere 6 seconds (tech2 News Staff, 2014). That shows the craze among the people when the new Redmi Note was launched. Redmi Note comes in 3 variants – one with 4G, another with 3G and the other with LTE. Redmi Note 4G costs around 800 Yuan in China market, that’s around $135 and comes with some of the best features which include 2GB RAM, 16 GB Internal Storage expandable upto 64GB, 1.2 GHz Quadcore Processor, 13 MP Rear Camera and 5MP Front Camera. With the combination of best features and affordable prices Xiaomi is able to have significant presence in the countries like China, Malaysia, Singapore, India, Indonesia and Phillipines.

Marketing Environment analysis of Xiaomi Redmi:

PESTEL analysis is used as a framework tool to study the marketing environment by examining the macro-environment variables of political, environmental, social, technological, ecological and legal. Although all the factors are crucial, analysis of two factors is considered most relevant for Xiaomi: the Social Factor and Technological Factor (Hein, 2015).

Social Factor

Most of the people of China and across Asia have level of income far less than the level of income of people of developed countries. Thus, people cannot afford the advanced latest phone from international brands like Samsung and Apple. Xiaomi emerged in China as their home grown brand and providing latest phones at affordable rates. Selling price of Apple’s iphone and other android brands are comparatively higher than the Xiaomi’s Redmi having the similar features. China itself has a large market for cheap phones with better features and outside China in other Asian countries people are in demand of cheap smartphones which show that The social factors are incredibly positive of Xiaomi Redmi.