Business / Technology

Xiaomi attracts US brickbats

By GAO YUAN (China Daily) Updated: 2015-05-22 10:31

Is Xiaomi Corp pulling off the hunger marketing strategy in the United States?

It appears so, as the smartphone vendor's first online sales in the US and a number of other developed markets lasted for less than a day before its store ran out of stocks.

The brief history-making event for Xiaomi ignited widespread customer complaints, criticizing the Chinese company's low inventory and high transportation costs.

Online criticism entered the second day on Thursday after Beijing-based Xiaomi opened an online store on its homepage, selling an array of accessories to the US, the United Kingdom, France, and Germany. The first offerings include fitness bands, battery packs and a set of high-definition headphones selling at $79.99.

The products were sold out almost instantly, triggering complaints on Twitter and Facebook. Twitter user @benwood, apparently living in the UK, tweeted: "Woke up to find @xiaomi store all sold out today. Promised US&UK launch but 3 am opening time no good for Brits!"

Xiaomi did not say how many accessories were prepared for the international sales. Purchases were not available as of Thursday evening. The company's star product line, the smartphones, was not included in the offerings.

Another factor that has angered Xiaomi's overseas enthusiasts was its delivery policy. All the products will be shipped from China, adding $16 shipment fees for each order. Mi Band, the company's fitness wearable, costs just $14.99, while Xiaomi has set a minimum purchase price of $20.

"So the @xiaomi store is a complete dud. Everything sold out and exorbitant shipping costs for anything you do manage to buy #disappointing," tweeted another buyer nicknamed @ravmania.

Shoppers who were quick enough to make their purchase also expressed their discontent. They were asked to create a Xiaomi account and link it to their email address or a phone number.

Xiaomi, however, pledged to improve the service and upgrade the purchasing process. "The cross-border e-commerce platform is still a test version and we are trying hard to improve everything so everyone in the world will enjoy the fun of technology," the company said in a statement to China Daily.

In the early stages of Xiaomi, its smartphones repeatedly went out of stock in China. Some slapped Xiaomi founder Lei Jun of masterminding a hunger marketing stunt, releasing a small number of products to create man-made shortages. Lei, dubbed as the best salesman in China, never admitted he used the strategy to attract initial buyers.

Xiaomi is seeking opportunities to get customer attention from developed markets starting from this year, but it remains difficult to sell smartphones to them.

Bryan Wang, country manager for China at Forrester Research Inc, a US-based technology and market research firm, said the demand for high-quality budget phones is increasing in countries such as France and Germany. But to get access to these markets, Xiaomi needs to forge strong ties with local telecom carriers, retailers and distributors.

The partners can help Xiaomi, which lacks experience in developed markets, to figure out inventory, customer services and delivery problems.

It is not clear when Xiaomi will start shipping smartphones to countries such as the US and the United Kingdom. Wang said patent issue is one of the thorniest hurdles ahead.

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