How Do They Do It : Chinese Phone Pricing Explained

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How Do They Do It : Chinese Phone Pricing Explained

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Many of you have inquired as to how the Chinese smartphone manufacturers are capable of bringing high speced devices that are priced so low. Here we attempt to explain how the likes of Xiaomi and others go about their business of creating havoc in the mobile markets everywhere.

Both Motorola and Xiaomi have kept prices low by using the e-tailing route

Both Motorola and Xiaomi have kept prices low by using the e-tailing route

It is estimated that companies like Xiaomi are selling their phones at a loss of Rs. 1000 so that they can create a market buzz around their products. Xiaomi is bringing in just about a 1,00,000 units of their phones to India and have been selling them out in periodic flash sales. By bringing in a limited number of device the company start a stampede and this causes other competitors to reduce their prices, something we saw Motorola do when they slashed Moto G’s price by Rs. 2000. By using this strategy, Xiaomi, with its limited marketing budget has made its name shine out in the market.

However there is a downside to this marketing technique. The flash sales are now confusing and sometimes irritating the potential consumers who want the phone but cannot buy them. It has started to create a negative perception amongst such consumers. They are now seeking alternatives to the phone.

chinese calNow here is where the internet marketing convenience adds in. Basically, by just using an online sales channel, a strategy devised by companies like Motorola, the companies get to save massive amounts in distribution, marketing, dealership and other costs. And hence these high speced products reach the consumers in what can be called shockingly low prices, well its shocking for big brands at least.

It is also speculated that another Chinese smartphone manufacturer, One Plus, intends to try its luck in the Indian market. Their phone, the One Plus One is a high speced powerhouse which comes at mid segment prices. They too have limited stocks and might take the Xiaomi approach. But if these companies plan to stay in the Indian market for the long run, they need to come with stocks in accordance with the demand in the market. Or else they will just act as an inspiration to companies with already big reach to bring similar products and in turn, take away these companies potential customers.

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About The Author
Happy Nagashetti
Happy Nagashetti
iGyaan Network's newbie Happy is a Technological Hedonist, Traveller, Photographer, Curious Humanoid and a giant foodie who is always pumped up for new adventures.
  • Lucky Dhiman

    Shijil YES

  • Taio Cruz

    but still iphone is much better

  • Shijil

    after 100000 , they will not sell any more Mi3 in India ?

  • Akshay Maini

    gionne elife e7 is sold through retail shops and almost all ecommerce sites and cost is 24k so I guess xiaomi cost could be less than 24k bec its selling through only one e commerce site

  • Akshay Maini

    Who stupid made that calculation without adding flipkart cost? So u saying I can go to China make my phone model and sell it through flipkart for free? And no transportation cost for xiaomi? 100000 units arrived India thru email u saying?

  • Punit Pushkar

    which math genius crunched those numbers

  • Bronze Medal

    Samsumg store keepers getting angry about online pricing lol XD LMAO

  • JigarNagda

    Bharat Nagpal i am a big fan of your and igyaan. But i am little disappointed

    I personally feel that you should also consider asus zenfone 5 and xolo 8x-1000.

    I think that you are trying to ignore them. As there is no review of asus phone. You also didn’t cover the xolo hive & 8x-1000 launch.

    Hope to see both this phones hands on & review soon.

    I also want to know is there any news of a similar big launch of a micromax phone.

    Hope you will consider my request and reply.

  • Siddharth Rao

    very informative video

  • Siddharth Rao

    Dude there’s no doubt..abt chipset… Qualcomm is their backhand

  • Suraj Gupta

    Why iGyaan is Ignoring Asus Zenfone Series???

  • TanishBabu

    you should talk about asus zenphones as they are in the same price bracket of moto g and has a intel processor which makes it different from the other phones in this price bracket

  • Thomas Sumanth

    nice explanation :)

  • SunilKodur

    YES! Marketing made much more easier though! Good one Bharat Nagpal! Sharing it on my blog as well!!

  • Vikas Maurya

    Nothing new

  • Mohd Nazir

    Well explained…

  • Zaakir Hussain

    Yes in mi3 atleast

  • Zaakir Hussain

    But most important part is still untouched, i.e the quality and the chipsets used. Like i heard u once saying “comparing snapdragon and mediatek chipsets is like comparing audi and maruti..”

  • Avneesh Sethi

    really informative

  • Swagat Mishra

    install adblock