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How Could Xiaomi Success in Online Phone
Pu chase Pe suasion In luence o he Phone
Manu ac u e ?
Ong Khai Lun
1
Cen e o Sou he n New Hampshi e Uni e si y P og am, Help College o A
and Technology, Kuala Lumpu , Malaysia
Rashad Yazdani a d
Cen e o Sou he n New Hampshi e Uni e si y P og am, Help College o A
and Technology, Kuala Lumpu , Malaysia
Abs ac
As he wo ld e ol ed, people we e no only able o g ow and p oduce mo e
c ops bu hey ha e also ound he abili y o mass p oduce. Wi h he abili y o
mass p oduce, people s a o ade wi h ade s ha come om all o e he
wo ld. All hose exchange and ading ac i i ies a e done h ough physical
appea ance o wo o mo e people. In he 21s cen u y, mos businesses a e
beginning o be ansac ed online. Buye s no longe need o go ou om he
house and go h ough all he hassle jus o buy ce ain p oduc s. Xiaomi ook
ad an age o he changes o wo ld o in e ne and succeeded. As Xiaomi g ew
bigge , o he phone manu ac u e s saw he oppo uni y o be as success ul as
Xiaomi. This pape looks in o he cu en phone pu chase beha io o he
consume s and how he beha io is able o c ea e oppo uni y o he o he
phone manu ac u e s o copy Xiaomi’s success.
Keywo ds: Online Pu chase Beha io , Xiaomi, In e ne
Ci e his a icle: Lun, O. K., & Yazdani a d, R. (2015). How Could Xiaomi Success in
Online Phone Pu chase Pe suasion In luence o he Phone Manu ac u e ?, In e na ional Jou nal
o Managemen , Accoun ing and Economics, 2(5), 481-488.
In oduc ion
Shopping is a popula beha io o e e y indi idual in his wo ld and ha hey would
like o do i e e y day gi en he chance. The adi ional shopping beha io is whe e
1
Co esponding au ho ’s email: alex5313@ho mail.com
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482
consume s need o a el o he shop and buy hei i ems. T adi ional shopping allows
consume s o ouch, eel and expe ience he p oduc ha hey wish o buy
(Joonkyum&Bumsoo, 2014; Ande son, &Simes e , 2014). Fo online shopping i is
e y di e en compa ed o adi ional shopping. Online shopping does no allow
consume s o ouch, eel and expe ience he p oduc ha hey wish o buy. Consume s
a e only able o decide h ough he pho os o ideos ha online e aile s uploaded and
he desc ip ion w i en in he websi e. Consume s no longe need o a el o he shop
jus o buy an i em. Consume s jus need o click o con i m he pu chase and he online
e aile s will ship hei i em o he consume s’ doo s ep. Online shopping howe e can
be a disappoin men o he consume s because he p oduc hey ge may no mee hei
expec a ion. Ini ially consume s ound he desc ip ion w i en o ideos o pho os ha
we e uploaded by he online e aile s e y p omising. The disappoin men consume s
expe ienced educed u ge he online e-buy beha io . Consume s will all back o
adi ional shopping o a oid disappoin men . E en hough consume s a e willing o y
buying online again, he amoun o money and quan i y o p oduc s ha consume is
willing o pay o buy is con ined o cheap o small p oduc s (Yulin, Is a , Heshan,
McCole, Ramsey & Kai H., 2014).
Online Pu chase Beha io
Online Pu chase Beha io is a beha io whe e consume s a e willing o isk o buy
p oduc s online wi hou ouch, eel and expe ience he p oduc s ha hey wish o buy
(Joonkyum&Bumsoo, 2014; Ande son, &Simes e , 2014). Online pu chases a e s ill
isky compa ed o he adi ional buying beha io . T adi ional buying beha io allows
consume s o ouch, eel and expe ience he p oduc hey wish o buy. Besides ha ,
consume s can check he p oduc s ha hey wish o buy p ope ly on he spo .
Consume s can demand he e aile s o change he p oduc and making su e he
exchanged p oduc is 100% wo king as he p oduc should. In con as o online
pu chase, consume s migh no know how he p oduc s unc ion excep wha is s a ed by
he e aile s h ough w i en desc ip ion, pic u es o ideos. Mos o he ime, consume s
a e su p ised by he unc ions ha we e no in oduced by he e aile s. Besides
consume s a e also unable o unde s and he ine poin s o he p oduc s, consume s a e
also exposed o he isk o being chea ed by dishones e aile s. Fo example, he e is
his B i ish gen leman bough and paid £300 o a lap op bu ins ead he go a piece o
pape wi h he lap op pic u e on i (Ha ley-Pa kinson, 2015).
Online Pu chase Beha io is also a beha io whe e consume s a e no willing o go
h ough he hassle jus o buy some p oduc s a he b ick and mo a shop. Fo example,
consume s who s ill p ac ice adi ional pu chase beha io will ha e o go h ough he
hassle o (1) a eling o he shop, (2) ind a pa king, (3) pa k he ca and walk o he
shop, (4) walk h ough di e en sec ion o g oce ies jus o ind a speci ic p oduc , (5)
line up o pay and (6) ca ying he hea y g oce ies o he ca and d i e back. Consume s
ha p ac ice adi ional pu chase beha io will need o a leas go h ough a minimum o
6 s eps jus o ha e hei g oce ies in hei ki chen. In con as wi h consume s who
p ac ice online pu chase beha io hey only need o click ew bu ons and hei
g oce ies will be sen o hei house (Kuma & Mukhe jee, 2013). Fo example, Amazon
in oduced hei Amazon F esh se ice o he public wi h he membe ship o $299 pe
In e na ional Jou nal o Managemen , Accoun ing and Economics
Vol. 2, No. 5, May, 2015
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© IJMAE, All Righ s Rese ed www.ijmae.com
483
yea and use s will jus need o choose he i ems hey wan and hose i ems will be
deli e ed o hei house wi hou going ou o he house (C ook, 2013).
Howe e Online Pu chase Beha io among consume s is gi ing popula i y due o he
us ha consume s ha e in he online e aile s (Malik &Gup ha, 2013; Singh & Singh,
2014; Tze-Hsien, &Ching-Jui, 2014). Fo example, Amazon.com is a us ed online
e aile b and. Ame ican us ed Amazon so much ha hey will p e e o sea ch he
i ems ha hey wish o buy using Amazon websi e o i s applica ion. Whene e he e
a e some p oblems abou he p oduc s, Amazon will handle i wi h sa is ac ion
gua an eed. Due o he good se ices ha Amazon is able o p o ide, cus ome s a e
con iden enough o spend mo e money on Amazon o e-buy om Amazon.
Wo d-o -Mou h
Wo d-o -Mou h is one o he impo an e ec s in ma ke ing. This is he idea o
s a egy ha is able o make people alk and sp ead news abou a company’s b and,
p oduc s o se ices (Kelle , 2007; Okazaki, 2009; No a an onio& Quigley, 2009).
Wo d-o -Mou h is a s a egy whe e consume s a e awa e o a speci ic company’s b and,
p oduc s o se ices and s a alking and sp eading he company’s b and, p oduc o
se ices o mo e people a ound hem. When a consume use a company’s p oduc o
se ice, he o she would sha e his o he expe ience wi h he p oduc o se ice no
ma e he o she has a good o bad expe ience wi h he company’s p oduc o se ice.
The expe ience sha ing o he consume s will inc ease he people awa eness o he
company’s b and and inc ease he sales e enue o he company. Thus, i is e y
impo an o a company o build a s ong b and loyal y wi h he consume s (Shimp,
Wood &Sma andescu, 2007; No a an onio& Quigley, 2009).
Xiaomi
Xiaomi is a so wa e company ha is ounded by 8 co- ounde s in 2010. Xiaomi’s
i s p oduc is MIUI which has o e 100 million use -bases o he da e o his a icle
w i en (En.miui.com, 2015). Xiaomi’s p io i y is o dis ibu e MIUI globally and hei
in ol emen in ha dwa e business in 2011 mainly is o help boos MIUI use -base. In
o de o ha e mo e consume s o own hei ha dwa e, Xiaomi decided o sell hei
p oduc s a nea - o-cos (Bhaga , 2014). To Xiaomi, se ing up a adi ional b ick and
mo a s o e migh inc ease he cos o he p oduc and in iew o his Xiaomi
concen a ed hei businesses online. Due o Xiaomi’s p oduc will no be a ailable on
he websi e a all imes; Xiaomi needed a way o communica e wi h i s consume s. So
he bes way o hem o communica e wi h consume s is h ough he social media.
Xiaomi’s s a egy o concen a ing hei business h ough he social media allows hei
b and o be known in no ime (Shih, Lin, &Lua n, 2014; S one, 2014).
Ma ke ing S a egy
Since MIUI was launched in 2010, Xiaomi had success ully buil a s ong use -base.
Xiaomi’s ha dwa e business helped consume s o Xiaomi o sp ead Xiaomi b and easie
as i has i s own ha dwa e o people o es ou (Sei e , 2013). MIUI equi es complex
p ocedu e jus o load i on MIUI suppo ed de ices. No mal sma phone use s will no
In e na ional Jou nal o Managemen , Accoun ing and Economics
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484
was e hei p ecious ime o lea n how o load MIUI o hei cu en sma phone. As
Xiaomi’s i s ha dwa e eleased, MIUI en husias ic use s manage o show MIUI o
hei iends and amily by handing Xiaomi’s phone o hem. Besides ha , Xiaomi can
be so success ul because hey ollowed gue illa ma ke ing guidelines. Xiaomi ocused
hei ma ke ing h ough social media (Facebook and Weibo) and u ilize he cu en ho
opic happening. Fo example, Xiaomi is able o u ilize he opic o pe ol p ice
inc eased o RM 0.20 in 2014. Xiaomi made un o he pe ol p ice inc ease by
p omising hei cus ome s ha hey will no inc ease hei p oduc s by RM 0.20 and also
announcing i on Facebook (Mi Malaysia, 2014). This became he popula discussion
opic among Xiaomi’s cus ome s. Xiaomi’s cus ome s el ha he pos we e hila ious
and sha ed he pos on hei p o iles. As hey we e sha ing he pos , mo e and mo e
iends o amily membe s who did no know abou Xiaomi will no ice he p ice o he
p oduc s o he b and (Mi , 2014; Naylo , Lambe on& Wes , 2012).
Ideology abou hei P oduc s
Xiaomi managed o sp ead i s ideology o “Always belie e ha some hing wonde ul
is abou o happen” wi h hei p oduc s. When a consume ecei es his o he package
om Xiaomi, i always has he “Wow” ac o o su p ise he consume s when hey
opened hei package. The “Wow” ac o s make Xiaomi’s consume s keep pu chasing
hei p oduc s and also sp ead Xiaomi’s b and in hei social ci cle. Xiaomi’s way o
ma ke ing is di e en as compa ed o compe i o s as hey will use hei sales olume o
ma ke hei p oduc s (Olson, 2014; Bhaga , 2014). Fo example, on 3 d o July, 2014,
Xiaomi has able o sell 7000 se s o Xiaomi Mi 3 in jus 35 seconds (Mi Malaysia,
2014) and Xiaomi pos ed i on Facebook. Some consume s a e us a ed and also some
consume s a e happy wi h he sales. Consume s who p e iously did no hea he Xiaomi
as a b and be o e migh ha e he chance o know he b and as consume s who managed
o ge one o he 7000 se s o consume s who did no manage o ge one will pos in
hei p o ile o complain o o show o . This ou s anding way o ma ke ing managed o
cap u e consume s’ a en ion.
Communica ion wi h he Consume s
Xiaomi do no blindly ad e ise hei success, hey also inco po a e consume s’ daily
li e ac i i ies. Xiaomi’s masco , MiTu o Mi Bunny became hei ma ke ing ools.
Xiaomi do no always ma ke hei sma phone ins ead Xiaomi uses MiTu as a medium
o communica e wi h consume s. MiTu plays a ole as a iend o i s cus ome s. MiTu
ad e isemen ‘discuss’ abou daily li e issues. Fo example, Xiaomi will pos a pho o in
Facebook and in he pic u e MiTu will ask how you day is. By jus doing ha ,
cus ome s will s a o commen o discuss in he pos which will also appea in
consume s’ iends’ news eed. Xiaomi s yle o ma ke ing is conside ed e ec i e and
ele an as he con en is di ec ly ela ed o hei p oduc s. To ha end, Xiaomi ha e
communica ed wi h hei ma ke ing eam as hei doub s ha e been elimina ed and
con idence eo e ed. Xiaomi’s way o ma ke ing is e y lexible and unique. Xiaomi
concen a ed hei communica ion wi h hei consume s solely h ough social media. I
allows hem o always send ou he la es in o ma ion o hei cus ome s.
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Discussion
By 2014, Xiaomi is able o ship 61.1 million handse s which exclude he sales o
powe banks and accesso ies which hey a e also selling (Agomuoh, 2015). By jus
selling hei p oduc s online a he Eas sho es, Xiaomi is able o c ea e success and in
2015 Xiaomi is planning o expand o Wes sho es s a ing wi h B azil and Russia
(Agomuoh, 2015). On Thu sday 12 Feb ua y 2015, Xiaomi held a p ess e en in San
F ancisco o announce hei expansion o Uni ed S a e o Ame ica bu wi h a ca ch
(Ing aham, 2015). Xiaomi’s US websi e will only sell Powe Banks and accesso ies;
his is due o he egula o y o he ha dwa e and so wa e in eg a ion speci ically o he
US cause some di icul ies o Xiaomi o launch hei phones in his yea . Xiaomi’s
success also mo ed Xiaomi’s global posi ion o he la es 3 d place and ha success
a ac ed o he phone manu ac u es o adap Xiaomi’s way o selling hei p oduc s.
Xiaomi only sell hei p oduc s h ough hei o icial websi e.
Xiaomi’s success does no happen o e nigh , Xiaomi’s success is mainly due o
Wo d-o -Mou h. Xiaomi’s p oduc will no be a ailable on b ick and mo a like o he
phone manu ac u e s, Apple and Samsung. So he only way o cus ome s ha wish o
buy Xiaomi’s p oduc is o y Xiaomi’s p oduc om hei iends. When hey con on
hei iends, hei iends will p aise Xiaomi’s p oduc i hey a e sa is ied wi h he
quali y ha Xiaomi is able o p o ide. This boos s he con idence o he consume s
because hei iends a e sa is ied wi h Xiaomi’s p oduc and i hey a e also sa is ied
wi h he p oduc hey will ecommend o hei iends ha ha e no own Xiaomi’s
p oduc . Xiaomi’s success a ac ed o he phone manu ac u e s o adap Xiaomi’s
business model. Xiaomi’s bigges compe i o in China which also sells And oid
handse s, Leno o and Huawei also adap ed he same business model which is selling
hei phones h ough hei websi es. Leno o and Huawei see signi ican inc ease in hei
sales.
Consume s a e g adually adap ing online pu chase beha io due o he amilia i y
wi h he usage o in e ne . Consume s a e slowly depending on he digi al de ices like
sma phone, able and lap op. They no longe wish o a el o ce ain place jus o buy
ce ain p oduc s. Consume s p e e jus o click a ew bu ons and he p oduc ha hey
pu chased will a i e a hei doo s eps (Kuma & Mukhe jee, 2013; Singh & Singh,
2014; Beldona, Nusai , &Demicco, 2009). Xiaomi ook ad an age on ha pe spec i e,
whe e consume s a e g adually depending on he in e ne o ge in o ma ion o e en
p oduc s. Consume s who bough Xiaomi’s p oduc be o e migh no longe wish o
a el o b ick and mo a jus o y o jus o buy phones. Xiaomi p o ided he
con enience o hei consume s no o go ou o he house and his a ac ed ce ain
g oup o consume s. Xiaomi also p o ided accessible se ice cen e s ha will ix
Xiaomi de ice e en hough i is shipped om China. This a ac ed mo e consume s o
buy Xiaomi’s p oduc . Xiaomi’s p oduc will no be a ailable a he same ime in China.
Thei p oduc will only a ailable o he in e na ional ma ke a e ew mon hs Xiaomi
sold in China. No mally Xiaomi’s p oduc en husias s will ship Xiaomi’s p oduc
di ec ly om China and he p oduc s will no ha e wa an y. Wi h he new business
decision, consume s a e happy ha hey do no need o h ow he p oduc away i i
ha ing p oblems. This boos ed consume s’ con idence o buy Xiaomi’s p oduc because
hey know he p oduc hey bough will be handled by Xiaomi e en i he p oduc is
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Vol. 2, No. 5, May, 2015
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486
om China. Consume s us in Xiaomi’s p oduc quali y and se ices ein o ced mo e
e-buys om Xiaomi’s websi e.
Since las yea , 2014, mo e and mo e phone manu ac u e s adap ed Xiaomi’s
business model o sell phone online. Fo example, HTC, Meizu and Asus decided o sell
hei p oduc s online in o de o educe cos s and boos sales. Meizu in oduced hei
new sub-b and, Blue Cha m (魅蓝) in Janua y 2015, a mid- ange sma phone. This sub-
b and will sell on hei websi e wi h a e y a o dable p ice which is nea o cos like
Xiaomi. Blue Cha m will also be a ailable a he b ick and mo a bu wi h a highe
p ice. Meizu ga e ou an o icial s a emen o cla i y why he e a e p ice di e ences
be ween online s o e and b ick and mo a s o e (Sykes, 2015). Due o he p ice
di e ence, consume s’ only a ailable op ion o enjoy lowe p ice handse s is o buy
h ough Meizu’s websi e. Besides ha , Asus also ano he phone manu ac u e ha also
adap ed Xiaomi’s business model. Asus s a ed selling hei phone h ough websi e in
hei home own, Taiwan by o e ing a ac i e p omo ion o hei cus ome s. Asus
egis e ed a signi ican inc ease in hei e enue online and decided o use he same
business model in Malaysia. Asus s a ed o sell hei sma phones online and g adually
expanded o able and accesso ies. HTC also adap ed he same business model like
Xiaomi. HTC decided o open eS o e in hei home own, Taiwan and s a ed o ope a e
on he 4 h Feb ua y 2015 (Wu, 2015).
Conclusion
The e e g owing hec ic li es yle has o ced consume s change hei pu chase
beha io . Consume s a e g adually changing hei pu chase beha io ; consume s no
longe wish o a el and go h ough hassles jus o buy g oce ies. The bes hing ha
can happen o consume s is ha hose g oce ies can be shipped o hei home wi h jus a
ew clicks. This phenomenon is ge ing popula among consume s and is called online
pu chase beha io . Online pu chase beha io is a beha io whe e consume s buy hei
i em h ough online e aile s. As online pu chase beha io inc eases, companies like
Xiaomi buil hei success h ough online sales. Xiaomi is able o ship 61.1 million
handse s by he yea 2014 and Xiaomi success a ac ed hei compe i o s o adap his
online e ail business model. Phone manu ac u es like HTC, Asus and Meizu adap ed
online e ail business model in o de o inc ease hei e enue. Asus’s e enue did see
some signi ican inc ease and hey expanded hei ange o p oduc s in hei online
s o e. Asus s a ed selling sma phones on hei websi e and now hey expanded o
lap ops and accesso ies. As consumes a e ge ing used o online pu chases, he e will be
mo e and mo e phone manu ac u es p ac icing online e ail business model o inc ease
e enue and o accommoda e consume s need o s ay compe i i e.
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