SITUATION ANALYSIS REPORT XIAOMI – REDMI NOTE SERIES

 With the success of the Redmi Note series, Xiaomi has passed Samsung to become thetop smartphone company in India for the first time Singh 2017...  According to Xiaomi, Xiaomi entered

SITUATION ANALYSIS REPORT

XIAOMI – REDMI NOTE SERIES

 PHAM NGOC MINH (s3695318)

 NGUYEN THANH HUONG (s3808223)

 TRAN DUONG TRA MY (S3918858)

TABLE OF CONTENTS

I INTRODUCTION………

1 Company Description………

a) History………

b) Mission statement………

c) When did they enter Vietnam?

2 Product Description………

a) Redmi Note Series in Vietnam………

b) Market share………

c) Brand awareness………

II MARKETING ENVIRONMENT……….

1 Micro Environment……….

a) The company………

b) Marketing intermediaries………

c) Customers………

d) Competitors………

2 Macro Environment………

a) Economic………

b) Natural………

c) Technological………

d) Cultural………

III SWOT ANALYSIS………

IV CUSTOMER-DRIVEN MARKETING STRATEGIES (STDP)………

1 Segmentation………

2 Targeting………

3 Differentiation………

4 Positioning………

V CONCLUSION………

VI REFERENCES………

VII APPENDICES………

I INTRODUCTION

1 Company Description

 Xiaomi is a Chinese electronics company founded by CEO Lei Jun and eight other founders in April 2010 "Xiao" is a mountain-sized grain of rice, and "Mi" is "MobileInternet." "Xiaomi" is a play on the phrase "Mission Impossible," reflecting thecompany's impending challenges in becoming the world's leading electronic corporation(Presthitha & Goswami 2021)

co- Established in China with the headquarter located in Beijing, Xiaomi was regarded as agiant in the Chinese smartphone industry in 2014 Xiaomi has effectively establisheditself as one of the world's most powerful smartphone organizations due to itsunstoppable success in the global smartphone industry (Presthitha & Goswami 2021)

 Xiaomi has officially entered the European smartphone market after dominating in Asia(Russell 2018)

 With the success of the Redmi Note series, Xiaomi has passed Samsung to become thetop smartphone company in India for the first time (Singh 2017)

2018 – 2021

 Xiaomi successfully raised $10 billion in its IPO on the Hong Kong Stock Exchange,being the world's largest IPO raise since 2014 (Jethro & Shressie 2018)

 The company then started to launch its smartphones in the European market (Deahl2018), and expanded its reach to the US market through the Amazon platform (Russell2018).

b) Mission statement: " Innovation for everyone" & "Making Quality Technology accessible to everyone." & "Just for fan "

 Xiaomi plans to produce and develop a more advanced, user-friendly operating systemthat outperforms Google's original Android version (AHmad 2014)

 Xiaomi's major objective is to produce innovative electronic goods at an accessibleprice that prioritize user experience and operational efficiency, allowing everybody topossess a smartphone and improving people's quality of life across the world (Mi2021)

 Xiaomi considers their customers to be more than just regular customers, but alsopartners They are trying to perfect their product and are fearless about testing newinnovation ideas as a result of their strength and belief (Mi 2021)

c) When did they enter Vietnam?

 According to Xiaomi, Xiaomi entered the Vietnam smartphone market in 2017 and soldtheir products through official retailers and eCommerce channels such as Lazada,Thegioididong, and FPT (Mistoreadmin 2017) With the introduction of Xiaomi, theylaunched a communication campaign called "Mi IS HERE" to introduce their first threeproducts: Redmi 4A, Redmi Note 4, and Mi Mix (Viet 2017) Furthermore, Xiaomiwould officially distribute in Vietnam via Digital World, and Vietnamese people would beable to buy their products and enjoy company service in Ho Chi Minh City, Hanoi, andDanang (VH 2017)

2 Product Description

 Since its debut in Vietnam in 2017, the Redmi Note series has established itself as one ofthe best-selling smartphones in the mid-range segment (MT 2017) The Redmi Noteseries, with its low price, high performance, and unique features from high-endsmartphones, has not only allowed low-budget consumers to have a premium experience,but has also completely transformed the global smartphone industry (Archyw 2021).Each year, Xiaomi releases different versions of the new model (Redmi Note) to meetdemand and adhere to the brand's mission, such as "Plus, S, Pro, Promax, 5G" (Hyunn.d.)

a) Redmi note series in VN

 2017 ( Redmi note 4): With SnapDragon 625 processor, 4100 mAh battery, and Full-HD

display, note four is considered one of the big hits in mid-range segments because of itshigh performance and unique features only found in high-end smartphones(Hernaski2021)

 2018 ( Redmi note 5 & 6 ): Continuing the previous version's achievement, the most

successful of these note series comes from its IPS LCD screen with FHD+ quality, 18W

fast charging capabilities and dual-rear/front camera, which are considered the best deal

in the mid-range segment(Hernaski 2021)

 2021 ( Redmi note 10): These series are considered a king of the mid-range segment of

smartphones because of their huge improvement and performance that surpasses someflagships The series contains some overwhelming features such as a 108MP camera, 6,67AMOLED 120hz screen display, and a 5,020mAh battery (Archyw 2021)

 Overall, The Redmi Note series is considered one of the famous smartphones in the range segment, with a cheap price point just from 4,460,000 dong in the Vietnamsmartphone market (Ly 2021)

mid-b) Market share

 As stated by Counterpoint 2021, Xiaomi accounts for 11% of the worldwide smartphonemarket share On the other hand, with 7.2% smartphone market share in Vietnam, Xiaomistill retains the top five brands, ranking at 4 , which has room to grow better in the futureth

(StatCounter 2021) Being much higher than one of their main competitors, which isVivo, Xiaomi is expected to take over the market share of the other same-segment brandsdue to the market saturation (TV 2019)

Figure 1: Vietnam’s 2021 smartphone market share (Source: StatCounter)

c) Brand awareness

 Xiaomi has now expanded its network to over 80 markets globally since its first foreignincursion into Singapore in 2014 Xiaomi first entered Vietnam in 2017 with the RedmiNote 4 and until now, it has gained a significant success in the market Since it does notfocus on developing physical stores, Xiaomi builds a very strong online network, for bothselling and communicating purposes since its entry into Vietnam in 2017, Xiaomi hasdeveloped a positive image among customers, ranking third among top smartphonevendors in the first quarter of 2021 (Anh 2021), ahead of other generic brands such asVSmart, Huawei, and Blackberry Therefore, “The Apple of China” is surprisinglypopular in providing technological products with a reasonable price, raising its brandawareness among related customers

II MARKETING ENVIRONMENT

1 Micro Environment

a) The Company

 Xiaomi's strategy of investing without control in a partner firm in order to form a ownership" relationship has yielded a win-win situation (Yang, Ma & Chattopadhyay2021) Xiaomi is led by creator Lei Jun, who has been president and CEO of the businesssince 2010 Mr Wang Xiang, who also serves as Xiaomi's chairman, joined the company

"co-in 2015 after serv"co-ing as senior vice president and president of Qualcomm Greater Ch"co-ina(Mi n.d.) Xiaomi also promotes collaboration with small businesses and entrepreneurs.These are usually small firms that specialize in a particular product and concentrate ontechnology (Yang, Ma & Chattopadhyay 2021) Many members of the staff have comefrom a MiFan background, with a passion for technology and the same desire to breakaway from the traditional practices and prove it with perfect and unique products.Xiaomi's headquarters are in Beijing, China, and the corporation owns brand agenciesaround Asia-Pacific, India, and Brazil (Mi n.d.)

b) Marketing Intermediaries

Since Redmi Note Series is from a foreign brand, people who wish to try out the latest productsmust use online intermediary networks Popular e-commerce platforms include Shopee, Lazada,and Tiki in Vietnam; and eBay or Amazon globally These are trustworthy websites that allowbuyers to effortlessly purchase things and pay online without worry

In the marketplace, MI Store is known as being the most respectable and genuine distributor,distributing each smartphone version to the general public alongside stores such as FPT Shop,Dienmayxanh, Thegioididong, etc

After winning the heart of technology- savvy category, Xiaomi released a slogan "high value at a

reasonable price" and passed it on to another group of customers They are less tech

-acknowledged, live in more remote areas with lower incomes and are attracted by this significantslogan (Yang, Ma & Chattopadhyay 2021)

 International Markets

Xiaomi entered the Indian market in 2015 and was well received by the public for the capability

of 4G, which defeated the domestically produced brands (BBC News 2019) Since then, thecompany has widen its range in the Europe, the USA and Asia

By 2019, ShareSave is a brand new social e-commerce platform using befriending with users andletting them join the development process with Xiaomi as the core This appears as a community

of MiFan, where they can connect and share shopping experiences, reflecting Xiaomi's belief inthe power of community (Xiaomi Team 2019)

d) Competitors

 Direct Competitors

When Xiaomi phones first arrived in the Chinese domestic market, they faced competition fromsimilar-segmented companies such as Huawei and Lenovo Once established in the local marketand adjacent areas, Xiaomi approached the worldwide market, where it faced two giants, Appleand Samsung

According to the latest statistics on the phone market in Vietnam June 2021, Apple leads withmore than 36%, followed by Samsung and Oppo with 30% and 15% respectively Xiaomi iscurrently ranked 4th in the top 5 most prominent and used phone brands in the country(StatCounter 2021)

 Indirect competitors

The Redmi Note Series has been a success with advanced design and quality that have pleasedcustomers However, it cannot avoid competition other devices that offer several similarfunctions as a smartphone today For example, when it comes to photography features, manybuyers will choose a camera since they believe the phone cannot satisfy their technologicalrequirements Especially in recent years, the film photography trend has reappeared and isfavored by young adults considering the quality of retro photos that achieve outstanding quality

of hue, brightness, and resolution (Nguyen 2021)

Likewise, when it comes to other entertainment requirements, customers will prefer otherspecialized devices rather than the Redmi Note Series They will choose virtual reality handheldgaming devices since the experience is novel and distinct from mobile game apps on phones;they will prefer to watch Netflix with family on TV or laptop due to its higher resolution andwider configuration

2 Macro Environment

a) Economic

 Vietnam’s 2020 GDP per capita is 2,779$, which is approximately 63.8 millionVND (CEIC Data n.d.) Despite the significant COVID-19 impacts, this shows aslight growth of 2.3% compared to 62.3 million VND in 2019 According to theWorld Bank (2021), Vietnam has recently transitioned from one of the world’s

poorest countries to a lower-middle-income nation The household’s averageincome per capita over the past ten years has changed substantially, from roughly1.39 in 2010 to 4.19 million VND in 2020 (Statista 2020) Accordingly, this led to

a rise in improving better personal life quality, being fulfilled by modern productsand services

 Vietnam is a low-middle-income country with a middle class figure of only 13%(World Bank 2021), and a rural population of 62.3% (Kemp 2021), which givesRedmi Note Series the opportunity to target those who need a cheap-but-powerfulphone The worldwide number of smartphones is expected to increase in 2021.This trend is also true in Vietnam, where the rate of penetration for smartphones is9th worldwide with 63.1% (MIC 2021) However, not anyone can have access tohigh-end smartphones, namely Apple; therefore, Redmi Note Series has variouspriced products, making it easier to afford for every single market segment

b) Natural

 Smartphone manufacturers have a difficult task when plastic is the main materialused, including the Redmi Note The production of a smartphone is estimated toemit 16 kilograms of CO2 into the environment (Lovefone 2018) Xiaomi doesnot have a factory in Vietnam but expects to open one this year (Ho 2021), whichmeans the company will have to think about sustainable development, includingwater pollution, waste and CO2 emissions

 One important natural factor is the COVID-19 The pandemic has changedpeople's way of accessing electrical systems, as smartphones are being morecommonly used worldwide, especially because of the lockdown situation(Deloitte Vietnam 2021) Xiaomi ran third amongst Vietnam's top smartphonevendors in the first quarter of 2021 – 79% higher than annual growth (Anh 2021)

c) Technological

 Vietnam is one of the fastest mobile applications markets in the world with over70% of the population owning a smartphone (TL 2020) Factors for this includeinnovative features, improved design, Internet access, etc The Redmi Note Series

is considered to be technologically advanced, especially when they focus onphotography ability, making consumers impressed by those specifications beingpacked into such a wallet-friendly phone (Bush 2019a) One of the most recentRedmi generations is the Note 10 5G with brilliant features but priced at only 5million VND

 In addition, technology is being applied throughout the daily life of human beings

in this COVID-19 situation In 2020, Vietnam's ecommerce market reached $11.8billion, accounting for 5.5% of consumer goods and service retail sales, with morethan half of the population online shopping (VietnamCredit 2021) Besides, thegovernment announced that from 10th July onwards, Vietnamese people can sign

up for the vaccination program online through the “Electronic Health Book''application via smartphones (QA 2021)

 Professor Nguyen Thien Nhan, member of the Politburo, Head of the Delegation

of the City of Ho Chi Minh, said IT is being further developed and is expected toexplode in future (Tuoi Tre 2020)

 These factors help Redmi Note Series compete directly with large brands such asApple or Samsung for its customized price and approach more potential marketsegments Xiaomi also has an excellent chance to strongly invest in theVietnamese IT industry in the near future.

d) Cultural

 It is undeniable, in the 4.0 trend, that the Vietnamese change their lifestyle fromtraditional to modern, to more advanced than ever before Their behaviors alsochange accordingly All the minor things such as daily interactions, shopping,transactions, etc are available on digital platforms, particularly in this situation ofpandemic lockdown The culture is being more virtually transformed

 China is considered the world’s largest manufacturing economy (IMF 2020) Ittherefore attracts many international businesses, which also increases the "Made

in China" products (Andersson 2015) However, many people still believe that thelabel "Made in China" is of poor quality (Bush 2019b) Xiaomi is a ChineseCorporation, and therefore to some extent, it is affected by this consumerbehavior, creating a challenge for Xiaomi’s market penetration and competitionwith big competitors in Vietnam

III SWOT ANALYSIS

STRENGTHS  Xiaomi has been one of the most prominent smartphone

manufacturers The Note series is made in massive amounts in

China and is widely used all over the world According to theofficial website of the Xiaomi community, the Redmi Note 8 isregarded as the top 3 best-selling smartphones in the first half of

2020

 The Redmi Note series has been made available at a minimal price Consequently, it helps them to obtain wholehearted

support from middle and lower- class customers

 Xiaomi currently dominates the Asian market, particularly

China, which is one of the most massive and ideal marketplacesfor every brand As a consequence, they have establishedthemselves as a formidable competitor to other high-end brands

 Xiaomi, as one of the most popular smartphone manufacturers,

intends to extend its distribution by focusing on offline

retailers It might lead to a significant increase in income and

profit

 Xiaomi devices are exclusively available for purchase online.

 Many of the employees have been recruited from the MiFancommunity Therefore, Xiaomi's technical team is able to

develop smartphone technology based on the requirements and recommendations of long-term Xiaomi consumers.

WEAKNESSES  Xiaomi is not focused on physical stores There is no doubt

that online platforms are occasionally untrustworthy when itcomes to buying a smartphone since it was impossible forconsumers to get their hands on the goods, inspect the features,and check for technical faults

 There are fewer opportunities for Xiaomi to receive revenue from high-income and upper-class clients because Xiaomi

devices are exclusively designed for middle and lower-classbuyers

 Xiaomi's marketing campaigns are not as prominent as those of other major firms They developed several advertising

strategies that included newspaper, broadcast, social media, andYoutuber-reviewed items Nonetheless, the contents areuninspiring and fail to convey the product's uniqueness

 Xiaomi has a cost-cutting marketing approach They put a lot

of emphasis on supporting MiFans rather than employingalternative marketing strategies such as hiring celebrities andKOLs to promote the product

 The smartphone and electronics sectors are acknowledged for the fierce competition Apple and Samsung are among the

contenders Every year, Apple and Samsung releasesmartphones with distinctive looks and features that impress

buyers, posing a significant competitive environment for

Xiaomi

OPPORTUNITIES  In recent years, both Vietnamese income and smartphone

demand have increased sharply It has an impact on

consumers’ behavior A greater number of customers are willing

to pay for a smartphone As a result, Xiaomi will benefit from

approaching and expanding in the Vietnamese market.

 The Xiaomi Note series is mostly focused on photographing functions with sophisticated cameras, which attracts many

young people

 Direct competition from high-end companies such as Apple

and Samsung encourages Xiaomi to improve the technology of

the Redmi Note series and attempt alternative methods.

 Because Vietnam's IT sector is flourishing, Xiaomi may

engage in technological development in addition to sellingsmartphones, as it already undertakes

THREATS  The restriction on public gatherings will make it impossible for

offline shops to function during social distancing times As it

is operating a physical store at Crescent Mall, this will have animpact on a portion of Xiaomi's income

 Since Xiaomi is a Chinese company, they have to contend with

the stereotype that low-cost Chinese products equate to inferior quality.

 The phone manufacturing process can emit a significant

quantity of CO2 into the atmosphere Xiaomi devices have a

shorter lifespan than iPhones or Samsung Galaxy phones, thusconsumers will be compelled to replace their phones morefrequently than usual Nevertheless, they will unintentionally

leak plastic into the environment Consequently, it leads to a decrease in environmental sustainability.

 During the pandemic, Xiaomi is not the only corporation

profiting from students' online learning and health monitoring for the elderly Other smartphone manufacturers

may also be able to benefit from this factor

IV CUSTOMER-DRIVEN MARKETING STRATEGY (STDP)

1 Segmentation

Xiaomi is popular among young people below 23 years old with low income and middle income for its reasonable price (Q&Me 2020) The secondary segmentation is people with upper income need an innovative smartphone with high quality for working and entertainment purposes

Segment Demographic

Characteristics

Psychographic Characteristics

Behavioural Characteristics

Geographic Characteristic s Young  Age: below 23  Social class:  Occasion: Urban,

(Gen Z)

years old

 Gender: male and female

 Income level:

low to middle income (<10 million;

dependent Vietnam Dong)

 Occupation:

students, employees or freelancers, part-time workers

 Education:

Undergraduate level and below

lower to middle class

 Personality:

socially conscious, self-confident, achievement-oriented

 Lifestyle:

modern, fear

of missing out (FOMO)

new product launch, special occasion

 User status:

potential user,first time user,use regularly

 Usage rate:

medium - high

 Readiness stage:

medium, want

to experience new product

 Benefit sought: cheapphones for basic needs

 Purchase base

on peer review

suburban and remote areas

Employee  Age: 24 - 34

years old

 Gender: both male and female

 Personality:

tech savvy, career-oriented

 Lifestyle:

vivid, enjoy taking photos and using social media (especially Facebook) (NapoleonCat 2021), high concerned about health and

environment

 Occasion:

promotion, need new advance

 User status:

potential, regular user

 Usage rate:

medium

 Readiness stage: high

 Benefit sought:

working and entertainment purposes within a wallet-friendly phone

Big cities and suburban areas

 Age: 35 - 65  Social class:  Occasion: Big cities and