Redmi: FOMO genius

Majority of Cellphones purchases worldwide are triggered by two basic events: First is the celebration/festival/bonus/windfall which is the occasion for an indulgence into a luxury item. Second, is the need based emergency purchase due to your old device going Kaput or stolen. Unfortunately both of the purchase decisions require instant gratification which cannot be solved by precarious flash sales. So who is buying them and why? How is that Xiaomi (北京小米科技有限责任公司) a company that does not have any brand recall, advertising, store/physical presence or offer any warranties able to do $10mn worth of business in 4 seconds ever week? (100,000 phones @INR 6,000/- sold in 4 seconds every 2pm on Tuesday on Flipkart)

Like any Chinese product, specs wise it is at a 20-30% discount to similarly priced models but what is the nudge that is prompting a million Indians to risk their money without touching/feeling/testing the product? Ryanair CEO Michael O’Leary had once said “passengers will crawl bullock-naked over broken glass to grab the cheapest tickets”, but is cost the only driving factor for this mad rush?

6,000/- is a considerable sum in India and the online reviews (at the only authorized seller website) is quite pessimistic. Almost everybody is complaining of the battery life issue and heating problem. Major problem in India where there are not many avenues to charge the cellphone and mobile is the exclusive means of employment and socializing for many Indian urban middle class. So a dead/discharged phone = loss of pay. A huge risk!

It is the classic case of FOMO (Fear of missing out), the entire purchase is converted into a game and 2pm every Tuesday people log on their screens in the hope/anticipation of getting lucky. It’s a strange buyer behavior I see where seemingly rational people are behaving impulsively. In such frenzy sales, the need for the purchase only arises AFTER the sale / event is announced.

I have known people who can spend the entire weekend indoors (watching youtube or wasting time). However the second you tell them that you have locked them in, they will have the urge of taking a stroll outdoors every 5-10 minutes. Similarly by denying people this phone for 6 days, 23 hours, 59 minutes and 56 seconds (and no guarantees even after that) the entire purchase decisions is converted into a binary groups of haves and have-nots.

Several people log on to the website just to get the thrill, some have bought multiple devices (for the entire family), some even call up friends and family to offer them the phones. Some even go to olx/quickr to resell and make some quick bucks. Essentially the flash sales has converted the consumers into not only adherent fans, but also (unpaid) sales agent, stockiest and retailers.

In the 80s the scooter were lopsided design (the engine/weight was not symmetrically distributed) as a result they were prone to accidents when braked hard. Even then my father loved his Bajaj Scooter…. Why he waited 5 years (and paid a bribe) to get one. Several Redmi fans simply yap endlessly about the difficult purchase process and several attempts they had to patiently make. The biggest call for fame for this phone is that it allows ordinary folks live the life of the trigger happy gun-slingers of the wild-west. They have a cute little trophy to prove that they are the fastest clicker amongst their peers.

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One thought on “Redmi: FOMO genius

  1. Interesting article and I agree with your analysis on the attractiveness of the online burst sale model. But you have picked wrong person on the physchological analysis. In the world it is the rarest items which are costlier and attractive. Diamond is the easiest example. It’s just a stone. How does it matter if it is the hardest or shiniest stone. A bulb can shine better than that. Why do we pay more for diamonds.. Xiomi has used the not easy to get ploy to a certain extent.

    But you are missing the whole point If you try to pain their success story only with that.. By going on the online only model, they control a huge amount of unwanted cost outflow which is helping them to keep the cost down and look the most attractive. You need to research on Xiomi in china before writing this article. Everybody knows quality comes at a price.. But in Xiomi Redmis 1s or Mi3 case good quality comes at an extremely low price.. Similar spec models which are at 30% higher or whatever you mentioned comes with a lower grade Mediatek processors (karbons, micromaxs, spice etc..) The killer attraction in redmi 1s is the qualcomm snapdragon S400 processor which gives excellent performance and the same chip is used in the 10000+ & 15000+ models all the way up to Samsung S4 mini or Sony Xperia Z which are at 28K.

    Second is I checked out the phone physically with one of the early birds before purchasing it for myself. I certainly felt the build is good with great screen feel and response. Coming to the heating problem….. I read about it and Xiomi had released a patch to solve it already. When I got my phone and used the phone for 30 mintues it heated up like hell.. Then I updated that patch and the problem went away totally. But keep in mind, I had one of the most successful and reputed Samsung model S2 not so long ago.. That 25K model went kaput in 1 ½ years and trust me, it heats up like hell as well when playing games.. Same case with previous phone Nuclea which I procured at 18K with all the best specs a mediatek octacore processor can ever give at that time. When costlier models go off in a year or heats up, I will certainly not complain on a qualcomm S400 based, 8 MP back camera, 1GB RAM, 8 GB internal, 4.7 Inch 3G REDMI model heating up when it cost just 6000. The nearest equivalent competitor Moto G is running at double this price. Similar story for Mi3 also.. but don’t want to write a long story on that..

    Bottom line…. Xiomi has put in products which are certainly high spec and extremely low price.. That is why Xiomi is currently the third largest smartphone maker in world and called the apple of china.. They will be kicking the samsungs and apples of the world pretty soon.

    Coming to my purchase logic.. My wife phone went bad( bad signals) and was looking for a good phone and I don’t want to shell out 20+Ks.. I was chasing the Mi3 with qualcomm 800 processor at 13k when equivalent models are 36Ks. Tried for 3 weeks but couldn’t get it.. Not for the thrill of buying it.. But it was so damn good. Mi3 was stopped because they are going to launch Mi4 soon.. But Redmi came after that which was even a better deal at 6K. Never had any second thoughts on buying it.. Got it in the second attempt. Waiting for 5 weeks to buy a value for money phone is not certainly related to thrill seeking as you have highlighted. Even if this model is sold in stores it will be a hell of a competition to any peer model in the shop.

    ilango

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