Xiaomi is a name well-known in the smartphone industry of India. The Chinese giant has built up a reputation for producing best-seller smartphones, but it isn’t the easiest to get them for yourself per se. If you’re a genuine buyer from India, who’s planning to get the latest Xiaomi smartphone, then you’re acquainted with those bothersome flash sales.
But you must be thinking flash sales have existed from the launch of the very first Xiaomi phone – the Redmi 1S, then what’s the problem now? While initially, Xiaomi had every right to claim lack of units to justify flash sales, it’s just not the case any more with major production facilities right in the country. Secondly, the brand has become so well established that the number of people flocking to the flash sales has grown exponentially with each year – thanks to the resounding success of the Redmi Note 4 last year. However, Xiaomi has persisted with the strategy, despite claiming to be the No 1 smartphone brand in the country.
With its recent Redmi Note 5 and Note 5 Pro devices in India, flash sales were back, and the phones which are being seen as the best ever by the company are currently wildly popular.
But if you are a genuine buyer, who does not find any appeal in spending an excruciating ten minutes slamming your keyboard every week, your only option is to wait months or to buy it off re-sellers on other platforms at a premium. While Xiaomi has no qualms in drumming up excitement around the phone, the result does not please fans. If you think we’re just making this up, just see Xiaomi’s Twitter and Facebook profiles to see other comments similar to the ones attached below:
https://twitter.com/k4liwidGh0st/status/969114147970584577
Very nice.. But i can't understand what you are going to do (as observed last 2 flash sales)… Why disappointing Fans with this Flash sales… Whatever it going to launch just bring huge quantity….
— Chiru (@Chirutiger) March 1, 2018
And if you thought that people do complain, what’s the big deal? Well, check out this tweet from another genuine buyer who’s been attempting to order the Redmi note 5 Pro for past two weeks but failing, only to find out that other people have bought multiple devices and are now selling them at a premium online.
https://twitter.com/Somasundar96/status/968745766092230661
After seeing the outpouring of cries from the fans, we decided to investigate this re-selling practice (or are they scams?). While we didn’t go undercover, we uncovered a mini parallel economy which thrives on the scarcity of flash sales. You may or might not be surprised to hear what we came across when we tried to buy a Redmi Note 5 on online marketplaces such as OLX or Quikr.
On popular platforms such as Quikr, OLX, and eBay, there is a flood of listings and the reality of the situation struck me. I discovered that not only the price being quoted in these listings was considerably higher, i.e ₹500 – ₹2000 premium, but the re-sellers also had more than one device available for sale.
At least a few of these sellers are running scams and asking for advance payments.
Wecontacted one of these re-sellers, who as you can see in the screenshot attached below, had ordered more than 15 Redmi Note 5 devices. The re-seller, a Delhi college student, told us that he and his friends placed the orders during the flash sale and used cash-on-delivery (CoD) payment method. The phones are currently in transit and will be delivered this weekend.
We were informed that we can collect the phone at the time of delivery, directly from the Flipkart delivery person, and pay them the MRP. This facility comes with a charge of between Rs 200 and Rs 400.
Further into the conversation, the re-seller started negotiating the price (or more precisely, the premium) and it became clear that he was looking to offload all 15 Redmi Note 5 phones at the same time to make a quick buck. The re-seller asked for ₹200 a device as premium if I planned on buying all 15 devices and ₹400 for a single piece. This means I’d have to shell out ₹10,400 to get the base model of Redmi Note 5.
The re-seller then wanted me to collect the Redmi Note 5 directly from the Flipkart delivery person, at a designated time and location, presumably the delivery address. This is where we put the discussions to rest, but I hope the situation post the flash sales is apparent to you with this example. You can check out our conversation right here:
These re-selling practices are not just limited to the Redmi Note 5 or Redmi Note 5 Pro. We also discovered numerous listings for the recently launched Mi TV 4. Here, these re-sellers are asking for an even bigger ‘fee’ with premiums as high as ₹6,000 on the sale of the TV, which are also in transit.
Beebom also contacted a phone dealer in Faridabad, who disclosed that they’re able to snag 3-4 high-profile devices such as the Redmi Note 5 during the flash sales simply by gathering a big group of 20 odd people.
When the flash sale stock runs dry, they use their contacts in Mi Home stores to find out if devices, be it the Redmi Note 5, Redmi Note 5 Pro or the Redmi 5A, are in stock. These are also bought and sold at a premium of around ₹1000.
Of course, majority of the genuine buyers have to wait for weeks before the demand dies down and a flash sales turns less crowded. While dealers and re-sellers have the wherewithal and the financial incentive to go the extra mile to get the device, ordinary buyers will not even think beyond asking a colleague or friend to help out.
The re-seller, who may have ordered many devices, and can simply decline the CoD order, if their attempts at re-selling fail. However, these units could’ve been purchased by genuine buyers, and Xiaomi would have had one less angry fan or potential buyer.
The flash sales, in our opinion, create a frenzy (or hype, as many term it) among the user base but the outcome isn’t particularly pleasant for them. In fact, the practice of re-selling lends flash sales a bad name in general.
#RedmiNote5 & #RedmiNote5Pro: we sold 3L+ units in <3 mins. This means 1L+ phones/min! 😎
After the amazing success of Redmi Note 4, we had put in a lot of effort to increase supply of Redmi Note 5. This was the biggest ever sale in India!
Gear up for the next sale on 28th Feb! pic.twitter.com/qbOWYxClFZ
— Manu Kumar Jain (@manukumarjain) February 22, 2018
We find this false scarcity created by Xiaomi to be against consumer interests. Xiaomi is pulling in a lot of interest, but only releasing a few at a time. It also hasn’t been prompt in addressing the Mi community that’s enraged over the lack of devices in comparison to the demand. And this is post the company’s commitment to “Make in India” and large production facilities operating within the country itself.
We contacted Xiaomi for some answers about this bleak situation, flash sales and whether they’ve thought of any alternatives for the future – for example delaying the launch till there is enough stock for a regular sale (yes, that’s a thing, Xiaomi). We also asked them what the company thought of the unsavory nature of the flash sales and this false scarcity which may be pushing people to pay a premium. We haven’t received a response from Xiaomi or its PR team as of now, despite highlighting the possibilities of scams related to flash sales.
We will update the article if and when Xiaomi replies.
What are your opinions on this situation? Should Xiaomi move past flash sales? Or take measures to provide ample stock or curb the re-selling of its devices online? Let us know your thoughts in the comments below.
The fate of Mi TV flash sale is worse. When the flash sale started, I was able to add the item to the cart in Flipkart but the problem is that when I enter the security code for the COD option, I get a message that the item is out of stock. I really don’t get the reality here. The same flash sale happening on Amazon, if you add the item to your cart, it is literally yours.Actually, I have had come across this situation 3-4 time in Flipkart. So I got fed up and turned up to MI online store. Things were much worse there, at the time of the sale the buy now button doesn’t work and goes grey. It is like you are restricted to buy and then when you refresh the page the sale is over and the page shows out of stock. What the heck is happening? Both Flipkart and Xiaomi are playing fools game on the customers.
They are targetting certain people and encouraging them as fans. Of course it is nice to have a good smartphone or a TV for a cheaper price. But this trend what we see MI is encouraging Black market and Negative PR among most people.
And when it comes to MI sale on Flipkart is like that and this thing didn’t happen for me when I tried to buy Honor 9 Lite on the same day, same time on Flipkart flash sale. Why is it only for MI phones and TV’s? Does anyone have an answer for this?
I know all about that production cost and saving up the cost in warehouse thing, which makes MI devices cheap but ‘come on @MI India’ Grow up and roll up your sleeves to face the market and Damn you guys start making those phones.
Hey Beebom, I am also a Journalist working with a different forte, however I too have been disappointed with this so called flash sale. I have been trying to purchase a xiaomi note 5 pro from past 2 weeks and whenever I tried to buy it, the flash sale would end in .01 seconds and I use a 15 mbps connection at my workplace. Because of that I had to travel to alot of retail stores where they are asking 16,500 for a note pro 5 i.e. 2,500 extra upon the retail price of the phone. I have filed a complaint regarding this on the consumer forum and I would really want everyone else who thinks that this is a hoax designed just to gain popularity or fool the end consumer then please file a complaint on the consumer forum and let xiaomi know that whatever they are doing is not at all justified.
Hey beebom. !! Thankx for this putting this very nice nd genuine article. Hope it opens eyes of every individual.
Well would like to get a reply from y’ll guys about those dealers. I want to grab that phone in premium. So please reply where do you found them.
Thankyou. Hope to get it soon.
Coming to market with ample stock is not feasible for xiaomi. Lets say suppose xiaomi had 3 lacs unit in stock and the demand is of around 20 lacs. Instead of waiting for couple of weeks and then starting sale leads to revenue loss in keeping stock at xiaomi premise. Another loss of interest on the amount that xiaomi can get by selling 3 lacs piece which comes at around 4200000000. yes it 420 crore. Another threat is in todays fast fast pace of IT innovation makes product obsolete very quickly and you never know when you get a better competition. So, whatever you can sell in this market sell at the earliest and xiaomi is doing exactly the same which is absolutely rite. Why not customer wait if they do not get the product in a week or 2 and stop encouraging black market. Why you want it to be done by xiaomi and not by the customer.
well said pls take the order from mi fans during the flash sale and deliver it when u have stock.
They really need to stop this crap and only launch products when they have the quantity to have sell as a normal product just like other products are sold online. The better way of creating the hype for their products could be through emphasizing more on online as well as television advertising. As it’s not hard for xiaomi to spend more on their advertising be it for a short period of time. Xiaomi needs to address the problem of reselling of phones at premium as it’s making a bad name for the brand be it indirectly. They need to start selling their products normally on e-commerce websites if they wish to stop ruining their reputation as the people who made it strong can at any moment make it weak by shifting their brand loyalty! Take notes “Xiaomi” cuz now’s the time.
Nice investigative post..
Me smells some big conspiracy in it and may be having some involvement of Xiaomi’s person.
Thanks Beebom !!! For the investigation.. I think Xiaomi themselve are ruining their brand value.. I wanted to buy MI Smart tv 4, same problem was faced by me.. in second’s the sale went to Out of stock. Unbelievable. And now this article gives me another shocking news of Re-selleing.. Xiaomi and Flipkart should look into it.. Hope MI team responds to your effort. Thanks
It is nice investigating regarding the MI sale, which some many don’t know regarding this, I too tried in sale to purchase but in just 2min the sold out, I didn’t understand how could be a item booking so fast ????