Xiaomi expands to US and European markets

Disruptive Chinese mobile player Xiaomi is taking its first tentative steps into western markets this week, but initially only selling accessories, not handsets.

Xiaomi operates a very minimalist, stripped down public presence, with a simple web store and preferring to interact with the world primary though its Facebook page. It relies primarily on viral marketing and word of mouth to attract new customers, all of which helps it keep hardware prices low.

“UK Mi fans, we are finally headed your way!” emoted the Facebook page for Mi – the Xiaomi consumer brand. For the 1st time ever, you’ll be able to shop on mi.com (beta test) and purchase star accessories like the 5000mAh and 10400mAh Mi power banks, Mi Band and Mi Headphones!”

While this is being downplayed as a ‘beta’ by Xiaomi, in order to commence shipping to the US, UK, France and Germany Xiaomi will have had to establish supply chain and logistics channels in those countries, so this indicates a significant commitment to global expansion.

Xiaomi’s model is to sell the phones at cost in order to create a captive market for accessories, apps and services. Its success stands in stark contrast to Amazon’s Fire Phone efforts, which also aimed to expand the market for Amazon.com, but with the fatal error of giving consumers no price incentive to make that Faustian Pact.