Can Xiaomi shake the global Smartphone industry with an innovative 'Services-based business model'?

Author(s) : Sonam Gupta, Ishneet Dhillon
ISSN : 0974-497
Year : August 2014 | Volume : 8 | Issue : 3/4

Abstract:The economic development in the third world countries is encouraging entrepreneurs to disrupt the existing and mature markets with an innovative model. This paper presents one such case of Xiaomi. Xiaomi is the brain child of a serial tech investor and entrepreneur Lei Jun, who is creating the next wave in the Smartphone industry with the launch of smartly designed Android phones at very moderate costs. The company after coming into existence in June 2010 has already shaken the Chinese market in a span of 4 years and is aiming to be the next buzz word in the international market. This paper analyzes the company�s innovative business model which doesn't rely on hardware to drive revenues but uses it merely as a platform to sell its services, it sells its products primarily through its website, doesn't maintain inventory and holds weekly sales, offers products at very reasonable prices, focuses on social media and hunger marketing and doesn't leverage traditional marketing and sales channels. The company has recently begun to expand internationally predominantly to Asian countries.


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