Xiaomi in 150m yuan ‘giveaway’ after a U-turn in smartphone sales
2017 sales target reached two months ahead of schedule, with shipments of 70 million handsets worth 100 billion yuan achieved by the end of October
Chinese smartphone maker Xiaomi is giving away 150 million yuan (US$22.7 million) worth of rewards to customers in a shopping festival starting Tuesday after the company managed to turn around its smartphone sales, which are expected to top 90 million units for the year.
Between December 19 and 26, Xiaomi is distributing 1 million coupons worth 100 yuan each and the same number of 50 yuan coupons to consumers who can use them to purchase most products listed on Xiaomi’s official platform, without any restrictions.
Xiaomi will also provide gift coupons to redeem products like phone cables for those who could not secure cash coupons. Consumers placing orders during the week-long shopping festival can save up to 2,200 yuan, according to the company’s website.
Xiaomi wanted to find an “unpredictable” way to express gratitude to its supporters after the company reported a good performance this year, founder and CEO Lei Jun said on his official Sina Weibo account.
Xiaomi, which briefly held the title of world’s most valuable start-up in 2014, has become known for its flashy online marketing campaigns, but it stumbled last year due to fierce competition at home.
The company saw a U-turn in sales in the second quarter of this year when it shipped a record 23 million smartphones during the three-month period, a 70 per cent surge from the previous quarter.
Xiaomi reached its 2017 sales target two months ahead of schedule, with shipments of 70 million handsets worth 100 billion yuan achieve by the end of October.
Its overall smartphone sales are expected to reach 90 million by the end of the year, according to Lei.
“Xiaomi’s success is attributable to three issues including its solving of capacity issues, its successful penetration into overseas markets as well as heavy promotional activities seen from offline markets,” said Zhao Ziming, a senior analyst from Beijing-based consultancy Cyzone.
The retreat by some Chinese smartphone brands, including LeEco and Zuk, that used to invest heavily in promotions and compete directly with Xiaomi is another reason why the company’s is gaining advantage in China, Zhao added.
According to an IDC research report issued last month, Xiaomi is currently the fourth largest smartphone vendor in China, shipping 15.7 million units in the third quarter with a market share of 13.7 per cent, compared with 12.7 per cent and 8.6 per cent in the second quarter of 2017 and third quarter of 2016, respectively.
The Chinese company is now the largest smartphone brand in India, on equal footing with Samsung, capturing 23.5 per cent of the market in the last quarter by tripling its smartphone shipments year on year and doubling them quarter on quarter.