Xiaomi MI Crowdfunding Platform in India: A quick view
By: Malini Bhattacharya
Published On: April 09, 2018
Here's all you need to know about the MI crowdfunding platform in India...
Chinese mobile manufacturing heavyweight Xiaomi has begun its own crowdfunding platform in India as an experiment to test their products in the market, before manufacturing them on a large-scale.
So, far it has put out two new and innovative products: the Mi Selfie Stick Tripod for Rs. 1099, and the Bluetooth Audio Receiver for Rs. 999.
Xiaomi has crowdfunded to roll out new products in China many times before, but this is their first experiment with crowdsourcing both customer feedback and product development funds in the Indian market, where it has a 27% market share in all cell phone sales.
The Mi crowdfunding China approach in India is designed thus
A prospective user of the selfie stick tripod or the audio receiver had to place an order for the product on the crowdfunding platform.The value of each order entered a fund pool that the company would use to manufacture and ship the product to users who have pre-ordered.
If enough fans or supporters did not place orders, Xiaomi would call the product launch off, and refund donations/order funds to every contributor, in keeping with the “all or none” fundraising policy they chose.
They met their targets days before the campaign was scheduled to close, though, so those who placed orders and contributed to the Mi crowdfunding project will receive the product(s) they pre-paid for, in a singular scenario where rewards-based crowdfunding is used effectively to make business vision powered with consumer satisfaction come symbiotically to fruition together.
Incidentally, Xiaomi’s valuation as of 2017 is of an estimated $46 billion, which means that it did not have to crowdfund in order to finance the launch of its two new products.
Why did they choose to do this, then?
First off, response rates to the crowdfunding campaign (which is also measurable by the number of people who pre-ordered and paid full price for a product) helps even a mobile giant like Xiaomi understand customer interest in the product.
If there wasn’t enough attention paid to the idea of a product (meaning, if funds raised fell short of the target), its launch could simply be cancelled or delayed. If the target is met, the project of manufacturing the products could get started in earnest, because there is a market waiting for it, a market who has invested in the idea behind the product already, and are keen on seeing a tangible reward.
This eschews a situation where a product is in high supply and demanded by few people, bringing its price and abstract value down in inverse proportion with this availability.
From the consumer’s point of view as well, the all or none crowdfunding model tends to work miracles in terms of building positive relationships with the brand, as well as with regard to minimizing investment risks for the donor (here the customer who is ready to pledge money, in good faith, for a product that has not yet been built).
Since no funds were deducted from backer accounts before the target was met, Xiaomi set an example for future crowdfunding campaigners by establishing an environment of comfort, safety, transparency and security around the campaign.
We can only wait (with immense excitement) for the next products on the platform and what this does to other tech giants who are constantly trying to test and shape their innovations to cater to the chaotic and diverse Indian market.
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