Subtitles section Play video
-
I have always been a fan of apple products.
-
Since I got my first macbook, I fell in love with apple products and since then I have
-
only used a MacBook and an iphone.
-
Lets be honest, they look great, they feel great and they are so compact that you can't
-
simply ignore them..
-
But then in 2015 I really wanted to try something new.
-
I was locked in this eco system for so many years already and I though its time to try
-
something completely new, something that I am not familiar with at all.
-
While I was hanging out with some friends, I realised that one of them had a new phone.
-
The phone looked quite unfamiliar, in fact I couldn't even recognise the brand and
-
when I asked him about it, he replied its Xiami.
-
To be honest that was the first time I have heard about this brand, I had a difficult
-
time pronouncing that name.
-
I still can't pronoun properly, how do you call it, Ciami, Shyawmi.
-
Anyways, After playing with the phone for few minutes and then finding out its price,
-
I was amazed because i didn't think that you could get such a great phone for such
-
a price.
-
The next day I ordered the exact same phone which was redmi note 2 and to be honest it
-
was too good for a hundred fifty bucks.
-
After playing with it for a sometime, the question that crossed my mind was, how on
-
earth does this company makes money when they are selling such a great phone at such a low
-
price?!
-
After digging into the company, I was shocked because the company was launched in 2010 and
-
they have achieved an incredible success in such a short period of time.
-
By 2014, they were the leading smartphone manufacture by number of sales in china, beating
-
everyone else.
-
I mean, with the release of iPhone some of the great players in the industry almost went
-
bankrupt because they simply couldn't stay competitive.
-
Remember Nokia, they literally went from Hero to Zero and then a chinese company comes up
-
and within 5 years surpasses even apple in the Chine and becomes one of the major players
-
in the global market.
-
So lets take a look at xiamis business model and figure out how did they achieve such an
-
incredible success in such a short period of time.
-
We usually complain about how phone prices are going up but we don't usually understand
-
the hidden costs that phones require before they reach our hands.
-
Companies spend billions just to let you know that they exist or keep you aware of their
-
latest product.
-
But at the end of the day, we the consumers have to pay for that.
-
However, xiami has found ways to sell its products at unbelievable low prices.
-
Instead of having a multi billion dollar marketing budget, the company does very little advertising
-
and relies on social media.
-
To reduce the cost further, they Don't spend a fortune opening up stores around the world
-
and hiring thousands of people and only sell their products online directly to customers.
-
By cutting out the middleman, the company could further lower their prices.
-
and by implementing just in time manufacturing strategy, the company doesn't need to maintain
-
a huge inventory.
-
The logic was simple, build great phones for extremely affordable prices that would simply
-
attract eveyone.
-
And guess what, It worked and made Xiami one of the major players in smartphone industry
-
within few years.
-
But that's just part of the story because the other part is, Xiami sells their smartphones
-
nearly at their cost of production and often doesn't make any profit.
-
It doesn't mean xiami is such a noble company that doesn't cares about profit but rather
-
they have a completely different business model.
-
Instead of making a profit when they sell you the product, they would rather make a
-
profit when you use the product by selling services, ads and so on.
-
So smartphones are like a trap to get you into the Xiami's eco-system.
-
Because besides just selling you services, xiami sell like everything.
-
in fact, If you are not familiar with companies strategy, it seems like they are selling whatever
-
comes into their min from electrical scooters to rice cookers.
-
I wouldn't be surprised if one day they start selling a xiami car or jets.
-
It might seem like a completely new business model, but its not because companies like
-
google have had the exact business model since their inception.
-
google doesn't charge you when you use gmail, google maps, google drive, but they constantly
-
sell you ads and other services like storage on google drive.
-
Of course, their sales figures have been in decline in recent years but they are not the
-
only one because the entire smartphone market is deteriorating.
-
But their rapid growth has given them a global awareness.
-
To build such a brand isn't easy, imagine the number of skills that you need master,
-
but every business starts with an idea, Most importantly you should be able to present
-
that idea in such a way that it would inspire others to take action.
-
And one of the most qualified people to teach that is Simon Sinek, you probably have seen
-
his ted talk or came across his book - start with Why, and goes what! he has a brilliant
-
course on skillshare that you should watch if you ever want to turn that idea into a
-
reality.
-
You can get the course for free if you are one of the first 78 people to use the link
-
in the description.
-
Thanks for watching and I will see you in the next one.