What does Xiaomi and Tesla Share in Common?
My
“groundless” assumption is that most people know what Tesla is, “best car ever made”, “zero emission electric
power” all sorts of buzz words that anyone can think of to describe the
next-generation of motor car, which sells infectious online. Established in
2003, the company’s market cap is well above 30 billion, more than half of the
General Motor’s.
What
is Xiaomi? It is a Chinese locally-designed & produced cellphone with all
the fancy gadgets that Apple 5s or Samsung Galaxy has, but somehow positioned
at almost half of the price of its competitors. Founded only in 2010, it sold 7
million in 2012 and 20 million in 2013. In the newest round of private
valuation, it is estimated to surpass 10 billion dollars, double that of
Blackberry and half of Sony.
It
will be rather challenging even to try making connections between these two
companies by any means. Tesla started in San Carlos, California, a hotbed for
innovation and entrepreneurship while Xiaomi launched its journey in the
capital city of China where the power grip of the Chinese government is the
most intact. Tesla is aiming at customers who are technology / environmentally
savvy with upper-middle income; the typical image of Xiaomi users is the
majority hardworking Chinese youth, fancying about high-quality of life but faced
with with harsh realities on a daily basis.
Behind
their overwhelming success stories lies their surprisingly similar marketing
strategy – almost no dealership; no huge budget marketing spending in
conventional channels; reliance on social media, celebrity influence (both of
its CEOs are considered iconic figures beyond their industry) and
mouth-to-mouth reputation; and most importantly, all sales done exclusively
online.
There
are two underlying principles that push two very dissimilar companies to adopt
almost the same marketing approach in dramatically different cultural contexts
with divergent spending habits. First, though aiming at two income levels, both
companies are serving the rising young generation who are more technologically
sophisticated and more ready to adopt new innovations. Second, the saving on
conventional marketing by the company is directed at greater customer-centered
service -- such as allowing individual choice in product design. Not
surprisingly, both companies, though very young they are, are ambitious enough
to prevail in both home countries’ fronts and beyond.
Therefore,
the statistically odd coincidence of Tesla and Xiaomi in their marketing
strategy only speaks aloud the imminent disruptive power of innovative
enterprises which are ready to challenge the old schools in the business.
Sources:
http://www.theatlantic.com/china/archive/2013/10/how-xiaomis-hip-inexpensive-smart-phones-conquered-china/280803/
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