Xiaomi wants to enter the high-end market? Configuration and novelty alone are not enough

On October 25, Xiaomi Note 2 was released as scheduled. Although its appearance had been exposed before and its configuration had been guessed, as Xiaomi's most expensive product, it still attracted attention from all parties as soon as it was released.

In the past two years, Xiaomi, which has been growing rapidly, has run into trouble. In 2015, the price of Xiaomi's cheapest mobile phone was only 399 yuan, but it still did not meet the expected sales. By 2016, according to statistics from various market research institutions, Xiaomi had dropped out of the top five and was relegated to Other.

Redmi cannot be sold at a higher price because of Xiaomi's price-performance ratio. On the other hand, seeing that OPPO and vivo sell machines with Redmi configuration at a price 1,000 yuan higher than Xiaomi, Lei Jun is certainly not willing to accept this.

Therefore, when Xiaomi Note failed to break through the 3,000 yuan mark, Xiaomi Note 2 integrated multiple technologies to try to break through again, and also invited Tony Leung Chiu-wai to endorse it. At the same time, it also released the concept phone Xiaomi MIX without a forehead.

Does Xiaomi have a chance to move up a level? Let’s take a look.

1. The configuration is almost impeccable, but who should we sell it to?

Xiaomi Note 2 has integrated the best accessories Xiaomi can buy, the fastest SOC, the largest possible memory and flash memory, a dual-curved screen, a high-pixel camera (the actual effect may not be very good), Apple's bright black color, fast charging, fingerprint (not ultrasonic)...

Everything Xiaomi could think of and buy was used in this flagship product. But the question is who are you going to sell it to?

Although Xiaomi is working hard to expand Mi Home, the gap between them and manufacturers like OPPO and vivo, which have strong offline channels, is orders of magnitude. Therefore, Xiaomi Note 2 will mainly target online e-commerce users.

As for e-commerce users, let's look at the numbers on Taobao. The Xiaomi Note 2 starts at 2,799 yuan, which roughly corresponds to the domestic mobile phones of the OPPO R series, vivo X series, Huawei P series and Mate series.

The market positioning is very clear. OPPO and vivo target female users, fashion users, and young users. Huawei is targeting government and business users and older male users. Although Huawei has also tried nova to target young users and female users, it cannot lose its basic market.

Xiaomi Note 2 will face competition from OPPO, vivo, and Huawei. In these markets, configuration is not a winning factor. Not many female users, government and business users know the strengths of Snapdragon 821. Their needs are realistic. Women want better selfies, better photos, more beautiful devices, and celebrity endorsements. Men want better workmanship, longer battery life, better signals, and preferably some confidentiality protection. Both markets prefer to buy devices offline.

Xiaomi Note 2 is not suitable for these two markets from product to channel. Xiaomi's traditional user groups are too willing to bear the price of Xiaomi Note 2. The configuration of Xiaomi Note 2 is almost impeccable, but who to sell it to is a problem.

Similarly, Xiaomi MIX is priced higher and faces the problem of user choice. Sharp has tried the foreheadless solution before, but the market response was not good. For this novel appearance, the experience has to pay a high price. Will users at this price pay this price for trying something new? Will users who like novelty pay for it?

It’s not like no one has tried something new before. Sharp’s forehead-less phone was just one of its attempts, and LG’s top and bottom curved screens didn’t sell well. I’m afraid Xiaomi MIX will repeat the same mistake.

2. Xiaomi’s brand burden

Xiaomi started with the 1999 RMB Xiaomi phone, and in 2013, to increase sales, it began to produce low-priced Redmi phones. The quality control of Redmi was not good, and the Xiaomi Note did not work well in the 3000 RMB price range, so Xiaomi's brand positioning was basically complete.

High cost performance, low price and high configuration, the so-called Diaosi mobile phone has become the label of Xiaomi. And then it has become the label of Xiaomi brand. Xiaomi's later products such as mobile power bank and Xiaomi TV have further strengthened this positioning.

High cost performance is a good thing and can meet the needs of many consumers, but when you want to go up the price level, high cost performance becomes a brand burden.

If a brand gives consumers the initial impression of being a low-end product, the choice of people without money, then your product will be associated with that consumer group.

Things that you don't show to others at home don't have much impact. It's not uncommon to see families living in villas worth hundreds of millions of yuan who don't care about toothpaste and soap. But the cars you drive and the clothes you wear, which are things that you show to others, should be more particular. Not many people drive Changan, BYD, or Zotye cars in villa areas.

Unfortunately, mobile phones are also products with certain display functions. If the brand positioning is too low, there will be problems. If the brand positioning is too high, people will not buy into the added value of the brand. The price of Xiaomi Note was not high at around 3,000 yuan, but it still failed. If Xiaomi Note 2 is priced at this level, it will also face the problem of brand burden.

This burden cannot be solved by finding a celebrity to endorse it. Reshaping a brand image is time-consuming and laborious, so most manufacturers will change to a new brand and repackage when they move from low-end to high-end, and separate themselves from low-end brands. Xiaomi has not done this yet.

There were rumors some time ago that Xiaomi was making chips. Judging from the specifications, it is still targeting the low-end market. As long as the Xiaomi brand continues to focus on the low-end market, Xiaomi will have to carry the brand burden.

3. Xiaomi Note 2 and Mi Mix have little chance of success, Xiaomi needs to start from scratch

The market positioning is unclear and the brand is burdened with heavy baggage. Although Note 2 has used all of Xiaomi's technologies and MIX has been innovative, the market prospects are still not optimistic.

It is right for Xiaomi to move into high-end products, but there are some problems with its approach.

If you want to enter the high-end market, hope to obtain higher profits and acquire high-end users, then you have to find the target users. Who are you going to sell to? The female market is too large, and Xiaomi can try the high-end market in the political, business and even technology industries.

First of all, the Xiaomi brand and the Xiaomi store brand have become low-end. Let’s change it. Huawei has a nova, Xiaomi has a more stylish brand, and a few Xiaomi stores with good locations have been renovated with more upscale decorations. It is not impossible to turn them into specialty stores.

Although there are not many Xiaomi stores, Xiaomi has entered many stores. Buying a new brand is nothing more than adding a counter, which is simpler than entering a purely new brand.

Secondly, the product cannot be based on Xiaomi's thinking and pile up configurations, but must consider what the target users need. For users who want high battery life and low performance, Snapdragon 821 may not be the best. High performance is not needed and the power consumption is high. We should learn from OPPO and vivo and focus on developing what the target users need. Is the concept phone Xiaomi MIX without a forehead that Xiaomi brought out at this conference really what users need? In what scenarios does it need it?

Third, marketing should keep up and brands should be isolated. Huawei's mobile phones have evolved from low-end PHS to mid-to-high-end ones. It is nothing more than giving up low-end products to Play and Honor. Marketing is willing to spend money. Xiaomi wants to become a new high-end brand, and this brand must not be low-end and make low-end products.

It takes several generations of products for a high-end brand to stand up. Xiaomi cannot be impatient and must continue to invest in channels and marketing. Only in this way can it establish a high-profit brand in a few years. And this brand must not be mixed with the Costco online version mentioned by Lei Jun.

Therefore, although Xiaomi Note 2 has good configuration and MIX is innovative, their chances are not very high. If Xiaomi wants to move up a price level, piling up configurations and pursuing novelty are far from enough.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.