Xiaomi has mastered the art of flash sales for selling its newly launched smartphones. The strategy helps the company build hype around the product as well as sell devices even when it has lower stocks. Earlier, it was understandable but seeing the company’s growth, it’s not acceptable that the company still relies on the flash sale model.
When the company was young, it was understandable that it could have issues with production and supply chain and the company had no choice but to go with the flash sale route because of supply vs demand problem. But now the company has means to solve that issue, then why is it still relying on the flash sale model? The company’s recently launched flagship device — Xiaomi Mi 9 is available through the flash sale and it’s very difficult for the users to purchase the device.
Well, we now know the answer. Xiaomi’s product director Wang Teng accidentally revealed in a group that the flash sale model is a strategic decision. If there is a lot of stock of a particular product, there’s no “premium” for that device in the offline market to sell and people will rely only on the online sales. Thus, the company would have to bear a huge loss.
While there are other reasons for the flash sale model, including production capacity and supply chain. However, the company also seems to be employing tacting like flash sale to create demand for the smartphone, which can then be available for purchase through offline channels with a premium on top of its price.
If the company decides to stock up as every other company does, the offline premium market will not exist. The phones are also available on premium through third-party online resellers. While users can’t get their hands on the newly launched Xiaomi smartphone easily, the phone can be found on major Chinese reselling websites at a premium cost.
Read More: Xiaomi is looking to set the trend for 18 months of warranty in the mobile phone industry
People are now frustrated with the flash sale model as it robs the genuine buyers the chance of owning the device. However, with the competition increasing against Xiaomi and with many other similar options to choose from, users will shift to another brand if Xiaomi’s products are not easily available. So, what do you think about the flash sale model?
