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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Useless e-commerce comparisions

Backdrop: My wife was nagging me to iron the pile of clothes for the past few days and finally I gave in. Well to be honest… nobody was surprised if the iron broke in 2 pieces halfway during the excruciating manual labor process.

Anyways here I am 10pm on a friday evening surfing the net to find a replacement.

“I was looking for: Steam iron which is compatible to a 5A plug point and has a 2+m cord. Heavier the weight, more I would prefer it.”

I am surfing all the top online stores (flipkart, ebay, pepperfry & cromaretail). I must say that each and every one had published a 1 page long description of each of the 100+ different irons they were carrying, yet none of these store had the information I was looking for. Instead they would bombard me with more products than I could compare, various discounts, coupons, cashback schemes that would confuse me.

I bought my phone (Nokia Lumnia) in flipkart a month ago. Since this was a high value purchase of a fashion accessory: I went to a store, selected the best match (product, feature, price range, color, look, feel, size etc.) then compared online for the best price. I was OK to wait for 2 days for delivery because the discount was worth it. for a 1,000/- steam iron, I am unlikely going to do that.

Essentially I see steam irons as a commodity. As long as it is from a good brand, there is not much value add in spending hours doing the research about it. I wanted to shop online because of the promise of convenience that it offers and also to save me the time and energy to go to a physical store for this undifferentiated product.

Maybe you feel it is a rant…. but its a voice of a customer who is willing to pay a premium if a store could save him a trip to the store.

 

flipkart ad: “Aapko bhi to photo dekhkar pasand kiya tha”

I was watching the latest series of Flipkart tv ads and I could see a remarkable difference in the product positioning by this market leader and pioneer in India’s E-Commerce space.
1. Unless the rest of the folks, the ads don’t talk about discounts. Everybody (esp. Indians) love discounts, buts its never good for business and till 2011 had created a situation where almost all the online retailers were booking losses and burning cash (rather than generating it)
2. Returns/reverse logistics: Flipkart has one of the best infrastructure and policy for the dissatisfied customer to return the products. However still the current series of ads don’t talk about it. Maybe its like one of those features (like credit card payment, Cash on delivery) that almost all the online shoppers expect the website to offer. Hence they have realized that its no point wasting precious media time talking about it.
3. “Aapko bhi to photo dekhkar pasand kiya tha”
I loved this line as it will strike a familiar chord amongst the entire country where arranged marriages are prevalent. Here the wife effectively convinces her husband that there is nothing new is selecting goods (or even your spouse) by just a photograph.
4. Use of kids: I am not sure why they use it, but kids create a natural curiosity and grabs our attention. Also it helps to communicate that the website is so easy to use that even toddlers can shop.

The shift from discounts, cash on delivery, return policies to the fact that its not too risky to shop online is a wonderful change. It addresses the core issue which keeps most shoppers away from websites, while ensuring that e-commerce not mere discount stores.