E-commerce has played a pivotal role in Xiaomi’s success as an up and coming maker from China. Many GizChina readers reading this story on their Xiaomi phones wouldn’t have been able to procure their phones had it not been for e-commerce and Chinese entrepreneurs.
However, like every other thing, there are two sides to this coin as well. Almost every market that Xiaomi has set up shop in, the maker has received rave reviews for its attractively priced devices. The flash sale model, however, means that not everyone who’d want a Xiaomi phone is able to get one… which opens up a market for scalpers.
Now, it makes perfect business sense to stock and sell products that generate huge demand… if done legally. Unfortunately for Xiaomi, and thus its potential buyers, a lot of its phones are being sold through unofficial channels at surprisingly high prices. Not only does it mean that Xiaomi loses a section of its customers, but it can also be a potential threat to Xiaomi’s image. Chinese phones are already a sensitive enough subject.
India’s Manu Jain said that the company would be taking legal action against 3rd party resellers participating in such transactions. Jain also added that what hurt the company the most was the fact that the resellers made their sites and stores appear as though they were official Xiaomi stores, which as we all know, isn’t the case.