Xiaomi, a well-known Chinese electronics company- has become a sensational smartphone brand. It sold over 190 million smartphones in 2021 surpassing Apple to become the second-largest smartphone seller in the world. A huge credit for this success goes to the creation of sub-brands. Xiaomi started adopting the strategy of capturing a wider market through Sub-brands- Redmi and Poco.
This move is similar to its competitors including BBK Electronics which owns Oppo, Vivo, Realme, and OnePlus as well as Huawei which has Honor as a sub-brand. The Poco F1 came as the first phone from the POCO sub-brand in August 2018, the Poco F1 was a huge success and the market was desperately waiting for a successor.
However, Xiaomi decided to Shut down Poco 18 months after the launch and later on decided to spin it off as a sub-brand. This makes people wonder What is the purpose of POCO? What is POCO’s strategy? Let’s talk about POCO’s strategy and its role in the Xiaomi ecosystem.
POCO’s strategy and What is its role?
Xiaomi was founded in 2010 and since then it has been on a constant path of growth. Currently, Xiaomi has 85 sub-brands under it and caters to millions of people. Its smartphones alone hold more than 26% of the Indian market. In 2020 Xiaomi smartphones accounted for around 11.4 percent of the global smartphone market.
So if everything is going on as a fairytale then what is the purpose of creating sub-brands like Redmi and POCO? The answer to this is simple- to create a brand identity and reach a higher audience. For example, Xiaomi’s sub-brand Redmi is it’s top selling sub-brands, it comprises of most of Xiaomi’s market. Redmi is known for it’s affordability and value priced features, it’s good, but it’s like a blessing with a curse. People presume that Xiaomi manufactures cheap phones with decent features.
To change this perception, Xiaomi came up with POCO, a mid-range flagship. The first POCO phone- POCO F1, was a great success, users loved the phone. With POCO, Xiaomi targeted the Youth, Particularly of India, Most of the Indian youth is tech-savvy and desire a flagship phone but don’t want to spend a fortune on it.
POCO’s smaller portfolio and aggressive marketing campaign rapidly drew the attention of the country’s tech-savvy youth. POCO wisely chose Flipkart, India’s leading e-commerce platform as its online channel, while Amazon accounts for the majority of Xiaomi’s sales.
POCO competes directly with other brands by leveraging the Flipkart marketplace. POCO ranked second on Flipkart and fourth in total India online smartphone shipments in the first quarter of 2021. It took the top spot on Flipkart for the first time in January of this year.
POCO gives Xiaomi an opportunity to sell it’s less popular phones under a new name, for example the POCO X2, which is a rebranded Redmi K30, However, POCO X2 didn’t gained much success as compared to POCO F1, but it opened way for Xiaomi to launch a more expensive phone that is the POCO F2.
“Everything You Need, Nothing You Don’t”- the philosophy on which POCO works. POCO’s strategy is to focus on necessary features and to provide flagship level features for an affordable price. POCO’s primary goal is to compete with other low-cost 5G smartphones. As a result, POCO’s strategy for India will be led locally and will target tech aficionados and youthful people.
The brand has supplied 13 million units worldwide since its inception in August 2018 and will continue to do so until the end of February 2021. Four million of those 13 million are for the POCO X3 NFC. Then what? Expanding into new markets and better understanding user wants. It is evident that the POCO’s strategy is working and we’ll be witnessing further growth of the brand.