CEO Xiaomi Reveals Secret of How to Sell Cheap Smartphone

CEO Xiaomi Reveals Secret of How to Sell Cheap Smartphone 


CEO Xiaomi Lei Jun speaks in Jakarta, Wednesday (27/9/2017) (KOMPAS.com/Yoga Hastyadi) JAKARTA , CEO Xiaomi Lei Jun revealed the secret why Xiaomi can sell smartphones and other gadgets at low prices. This is expressed in Sharing with Xiaomi event held in Jakarta, Wednesday (27/09/2017). For example, Xiaomi Mi 6 which uses Snapdragon 835 chipset is offered with prices starting from 2,499 RMB or about Rp 4.8 million. Meanwhile, other smartphone brands that use similar chipsets are offered starting at a higher price. "Our prices can be cheap, why? The other manufacturers sell smartphones at prices up to 2.5 times the price of production, while we are different, we sell them less than 1.5 times the price of production, so it can be very cheap," said Lei Jun. More details, he explains that the final price of a product is determined by the price aspect of raw materials and the cost of production; research and development costs; marketing and promotion costs; cost of sales and distribution channels of goods; as well as profit margins. Read: CEO Xiaomi Lei Jun to Bekasi Inaugurate Mi Store Xiaomi reaches a cheap price and not up to 1.5 times the price of production by cutting a number of aspects. Two of them are in terms of marketing and profit taken for the company. "Xiaomi made a cheap product by cutting profits, we took a zero gain from hardware, but in the first five years we did not spend any money on marketing and promotion," he explained. Advertisment Furthermore, Xiaomi also produces gadgets in large volumes. The way that makes the company can buy production needs with a cheaper price, production budget can be reduced. Through this combination of strategies, Xiaomi can make handheld devices and other products with a selling price that is below the competitor's product. "For example, powerbank.Before we make it, the price of powerbank market in China is 200 RMB (equivalent to Rp 400,000) with bad design and low quality," he said. Read: Guyonan CEO Xiaomi in Bekasi, All Indonesians Millionaires "Then we introduce Power Bank Xiaomi at a price of 69 RMB (equivalent to Rp 140,000) .Our design and quality is much higher and the price is competitive So it is not until one year we have market share big and so the number one in China, "said Lei Jun.