Xiaomi’s Success and Exploration of Marketing Strategy

Heterogeneity

Yue Chen

Faculty of Business, Economics and Law, The university of Queensland, Brisbane, 4072, Australia

Keywords: Xiaomi, Marketing Strategy, Fan Culture, Differentiation, Value Co-Creation.

Abstract: Xiaomi is a consumer electronics company with a very successful marketing strategy. This article will take

Xiaomi as the main case for analysis, and Xiaomi's core marketing strategy differentiation strategy includes

Xiaomi's own market positioning. Xiaomi's sense of mission has also cultivated its unique fan culture. This

fan culture establishes an emotional connection between the brand and customers, increases the user's sense

of interaction, and always puts user demand feedback in the forefront, turning customers into active co-

creators of the Xiaomi brand. So far, this article uses STP module, Value Co-Creation theory, and

differentiation theory to show that marketing strategy heterogeneity ensures Xiaomi's market advantage. In

summary, although Xiaomi has achieved a certain brand status and success in the fierce market with its unique

marketing strategy heterogeneity.

1 INTRODUCTION

From a theoretical perspective, consumption on the

Internet is borderless. As the number of suppliers

increases, market competition will become more

intense (Brown et al., 2017). This shows that Internet

consumption will no longer be restricted by region or

time. Consumers can buy products anytime and

anywhere, which will greatly expand the scope of

market competition. Moreover, as the number of

suppliers increases, consumers will have more

choices. At this time, how companies can gain

advantages and success will be particularly important.

Porter (1980) proposed that there are three main

strategies for companies to gain advantages in

competition, one of which is differentiation strategy,

which emphasizes gaining competitive advantages

through the uniqueness of products or services. This

emphasizes that products need to have a unique

positioning in the market, so as to help companies

stand out in a competitive environment. In this regard,

differentiation strategy not only helps companies to

shape a unique brand image, but also attracts specific

consumer groups. Through different innovations in

products, companies can meet the needs of specific

customers and form a loyal customer base. All of

these require companies to formulate targeted

marketing strategies based on unique differentiation

to attract target consumer groups, improve market

competitiveness, and thus gain more market share and

achieve success more effectively. This article takes

Xiaomi as a case study and analyzes the relationship

between Xiaomi's marketing strategy heterogeneity

and its success through the STP model, value co-

creation theory, and difference theory model. By

analyzing the heterogeneity of Xiaomi's marketing

strategy, it can not only provide other companies with

a successful example of coping with fierce market

competition, but also provide a new perspective on

the future development trends and potential

possibilities of the entire industry.

2 XIAOMI’S BACKGROUND

Xiaomi Group was founded in April 2010, focusing

on consumer electronics and smart manufacturing.

On July 9, 2018, Xiaomi was successfully listed on

the Main Board of the Hong Kong Stock Exchange

(Xiaomi, 2024). This marks Xiaomi's growth from a

startup to a world-leading consumer electronics

company, and also proves its success in the capital

market. As a world-leading smartphone brand,

Xiaomi's shipments have long been ranked among the

top three in the world, demonstrating its strong

competitiveness and huge market share in the

Chen, Y.

Xiaomi’s Success and Exploration of Marketing Strategy Heterogeneity.

DOI: 10.5220/0013997000004916

Paper published under CC license (CC BY-NC-ND 4.0)

In Proceedings of the 2nd International Conference on Public Relations and Media Communication (PRMC 2025), pages 607-612

ISBN: 978-989-758-778-8

607

smartphone industry (Xiaomi, 2024). In just ten

years, Xiaomi has grown from a startup to a Chinese

Internet giant with a market value of more than

HK$300 billion, and has become one of the youngest

Fortune 500 companies with its rapid growth (Zhao

& Yi, 2021). These achievements show that Xiaomi

has successfully established a brand with a high

global reputation.

The main reason for choosing Xiaomi as a case

for analysis is its rapid growth. In just ten years since

its establishment, Xiaomi has grown from a startup to

a leading global consumer electronics brand,

successfully listed in Hong Kong, and successfully

become one of the Fortune 500 companies with its

innovative technology products and unique business

model (marketing strategy of fan culture). Therefore,

as a company with a global vision, Xiaomi's

heterogeneous marketing strategy in a highly

competitive market can not only help analyze how

brands adjust according to market characteristics and

cultural differences, but also demonstrate its

innovative business model and product promotion

methods. Therefore, it is believed that Xiaomi's rapid

growth and successful transformation from a startup

to a global company is an ideal case for

heterogeneous analysis of marketing strategies.

3 DEFINITION AND ANALYSIS

OF XIAOMI’S MARKETING

STRATEGY HETEROGENEITY

Heterogeneity is considered to be an important

concept in understanding internal complexity.

Researchers generally recommend first identifying

and classifying heterogeneity, and then further

exploring its description of variation and difference

(Daspit et al., 2021). Based on this, by analyzing the

heterogeneity of Xiaomi, people can not only

understand its unique classification and variation

characteristics in the fierce market competition more

comprehensively, but also provide a new perspective

for exploring the marketing strategy of technology

enterprises.

This paper will analyze the heterogeneity of

Xiaomi marketing strategy from two main

dimensions: classification dimension and variation

dimension.

First, in terms of classification dimension, this

paper will focus on Xiaomi's marketing strategy in

product and market segmentation, and combine STP

(segmentation, positioning, target market) model to

conduct in-depth discussion, and draw a conclusion

that millet relies on cost-effective and high-quality

scientific and technological innovation products to

build its core marketing strategy.

Secondly, in the dimension of variation, this paper

will focus on the analysis of the shaping of Xiao Mi

fan culture. Xiaomi breaks the boundaries of the

traditional "buy and sell" relationship, turns

consumers into brand fans, and builds a unique

marketing strategy heterogeneity of fan culture.

Combined with the value co-creation theory, it is

discussed that fans are the co-creators of Xiaomi

brand. This "fan culture" is not only one of the core

competencies of the Xiaomi brand, but also provides

new direction and inspiration for the marketing

strategies of technology companies.

4 THE FIRST MARKETING

STRATEGIES IN PRODUCT

AND MARKET: STP ANALYSIS

Xiaomi's marketing strategies in product and market

can be discussed from three aspects, namely

Segmentation, Targeting, and Positioning.

First, Xiaomi's market segmentation and target

customer groups can be answered from Xiaomi's

mission. Xiaomi's mission is to always insist on

making good products that are "touching and

reasonably priced" so that everyone in the world can

enjoy the wonderful life brought by technology

(Xiaomi, 2024). Therefore, Xiaomi's market segment

can be labeled as a customer group that pursues high

quality, focuses on practicality, and values cost

performance.

Second, Xiaomi's target market can be found in

Xiaomi's positioning. It can be seen from this, Xiaomi

positions itself as a "technology universalist" and is

committed to using technological innovation to

change life, so as to meet the needs of global users for

high-quality, low-priced technology products

(Xiaomi, 2024). Xiaomi's definition shows that

Xiaomi focuses on mass consumers around the world

and has high cost-effective needs for technology

products. At this time, the consumer group hopes to

buy high-quality technology products at a reasonable

price, and also loves to pay attention to the innovation

and progress of technology, but it is also difficult to

pay for high premiums and pays attention to cost-

effectiveness. From this, it can be found that Xiaomi's

target market can be labeled as economical

technology enthusiasts.

Third, Xiaomi's market positioning can be

concluded from Xiaomi's ideals and actions. In 2010,

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when Xiaomi was founded, it had a grand ideal: to

change the generally low operating efficiency in the

business world. It guarantees that every bit of energy

will be devoted to making good products, so that

every penny paid by users is worth it (Xiaomi, 2024).

In this regard, Xiaomi has developed a user-centered

brand culture through the presentation of its mission

and continues to provide the public with high-quality

technology products that are within reach. Xiaomi

promises that its comprehensive net profit margin for

hardware will never exceed 5%. If there is any excess,

it will return the excess to users in full (Tencent news,

2024). In summary, Xiaomi's market positioning has

successfully found unique competitiveness in the

highly competitive market through high cost-

effectiveness and innovative technology, thus

differentiating itself from other high-priced brands.

Through an efficient business model and

minimalist supply chain management, Xiaomi keeps

product prices within an acceptable range for users

while ensuring the high quality of its products.

Similarly, Xiaomi's commitment also directly

conveys the brand idea of "Xiaomi not only sells

products, but also pursues user value." From this, the

core positioning of the Xiaomi brand is a cost-

effective technology popularizer, committed to

providing a technological life that is within reach of

global consumers.

Overall, Xiaomi has occupied an important

position in the fiercely competitive market through

precise market segmentation, clear target positioning

and clear market positioning, and has formed a unique

product and market segmentation marketing strategy.

5 THE SECOND MARKETING

STRATEGIES IN FAN

CULTURE: VALUE

CO-CREATION THEORY

Xiaomi has successfully shaped a rare high-tech

company with a "fan culture" by adhering to the

vision of building friendships with users and

becoming the coolest company in the hearts of users

(Xiaomi, 2024). This unique fan culture has extended

the relationship between Xiaomi and users beyond the

traditional product-consumer relationship to a deep

emotional bond. Through multiple interactive

platforms such as the MIUI Forum and the Xiaomi

Community, Xiaomi maintains close contact with 78

million and 38.5 million registered users, promoting

two-way interaction between the brand and users.

On these platforms, fans are not only consumers

of products, but also important participants in brand

innovation. By sharing ideas, giving feedback, and

participating in product design and optimization, fans

have become the core driving force of Xiaomi's

success (Cui et al., 2021). This deep interaction

enhances the emotional connection between the brand

and users, making users no longer just buyers, but

loyal supporters and communicators of the brand.

To thank fans for their support, Xiaomi regularly

holds a series of emotionally resonant events every

year. For example, April 6th of each year is

designated as the "Mi Fan Festival", and a "Xiaomi

Family Dinner" is held at the end of the year to invite

Mi Fans to celebrate reunion with company

employees. In addition, employees will

spontaneously handwrite 100,000 postcards for fans

to express their gratitude (Xiaomi, 2024). These

measures make Mi fans not only consumers, but also

an important part of the brand culture, showing the

deep emotional connection and resonance between

Xiaomi and users.

The construction of this brand culture is consistent

with the value co-creation theory, which emphasizes

that the interaction between brands and users goes

beyond the traditional buyer-seller relationship and

becomes a process of co-creating value between the

two parties (Lombardo & Cabiddu, 2017). In this

interaction, users become co-creators of brand value

by participating in brand innovation, design and

optimization.

In summary, Xiaomi's fan culture reflects the

heterogeneity of its marketing strategy. Different

from the traditional marketing model, Xiaomi

successfully transforms consumers into active

participants and co-creators of the brand through the

strategy of low price, high efficiency and emotional

connection. This difference is not only reflected in the

success of market competition, but also in the

establishment of brand culture and value creation,

which further highlights the heterogeneity of

Xiaomi's marketing strategy.

6 THE RELATIONSHIP

BETWEEN HETEROGENEITY

AND COMPETITIVE SUCCESS

With its brand positioning of "technological

universalism" and "high cost-effectiveness" strategy,

Xiaomi has demonstrated efficient use of resources,

created unique brand heterogeneity in the global

market, and met the needs of global users for high-

Xiaomi’s Success and Exploration of Marketing Strategy Heterogeneity

609

quality, low-priced technology products. This

strategy has enabled Xiaomi to stand out in the

fiercely competitive market environment, not only

forming differentiated advantages in price and

technology, but also ensuring the uniqueness and

attractiveness of its brand through innovative

business models and marketing methods. At the same

time, Xiaomi has broken through the traditional

product-consumer relationship by establishing a deep

fan culture and emotional connection, and

successfully transformed users into co-creators of the

brand. This deep interaction between the brand and

the user reflects the differentiated advantages of low

price, high efficiency and emotional resonance,

which enables Xiaomi to form a competitive

advantage that is completely different from

traditional high-end brands. Moreover, the success of

startups should be evaluated based on their degree of

differentiation, rather than being compared based on

size, growth, growth intentions, or basic

entrepreneurial direction (Lortie et al., 2021). In the

case of Xiaomi, both market segmentation and fan

culture are marketing strategies aimed at

demonstrating its own differentiation, and

differentiation is now considered the most critical

factor in evaluating success.

The relationship between heterogeneity and

competitive success can be deeply understood

through the differentiation theory. The differentiation

theory emphasizes that enterprises or brands establish

unique market positioning relative to competitors

through advantages in certain specific functions or

characteristics. These advantages can not only help

enterprises concentrate resources more effectively

and provide products or services with core

competitiveness, but also improve overall efficiency

by saving costs. As competitive pressures ease,

consumers' choices will be more focused on the

unique value provided by the brand, rather than just

based on price or other superficial features. As a

result, companies can gain a larger market share and

higher exchange value, thereby improving overall

competitiveness (Sharp & Dawes, 2001).

Specifically, the success of the differentiation

strategy lies in its ability to effectively reduce the

directness of market competition and improve the

company's focus and operational efficiency in

specific areas. In this way, companies can dominate a

specific market, enhance brand loyalty, and establish

a unique brand image in the minds of users. In this

case, Xiaomi successfully differentiated itself from its

competitors through the heterogeneity and emotional

connection of its brand culture. Through low-price

and efficient technological innovation, Xiaomi's fan

culture and user interaction, the company not only

gained a large market share, but also established its

unique position and competitive advantage in the

global market. These factors have jointly promoted

the success of the Xiaomi brand and highlighted the

key role of brand heterogeneity in competition.

7 FUTURE QUESTIONS AND

DEVELOPMENT DIRECTIONS

In the future, Xiaomi may face many challenges.

First, the intensification of market competition will be

an issue that cannot be ignored. With the increasingly

fierce competition in the global technology market,

especially in the fields of smartphones and consumer

electronics, the competitive pressure from traditional

high-end brands and emerging companies continues

to increase. Although Xiaomi occupies a unique

position in the market with its "high cost-

effectiveness" strategy, other brands may also imitate

this strategy and make breakthroughs in product

quality or technological innovation to narrow the gap

with Xiaomi. At the same time, more and more brands

will seek to seize market share through differentiated

positioning and innovative products, which will

undoubtedly bring challenges to Xiaomi's market

leadership.

Second, the sustainability of technological

innovation will be the key to Xiaomi's future

development. Xiaomi's "technological universalism"

strategy is deeply rooted in the core value of the

brand, but with the rapid development of technology

and the improvement of consumer expectations, how

to maintain the sustainability of technological

innovation will become a major test. In the fierce

market competition, innovation is no longer just a

single product improvement, but requires

breakthroughs from multiple levels such as the

overall technology ecosystem construction and cross-

product technology integration. If Xiaomi fails to

continue to launch competitive innovative products,

it may lose its advantage in the existing market and

face the risk of being overtaken by its peers.

Finally, the maintenance and expansion of fan

culture is another challenge facing Xiaomi. Xiaomi

has successfully built an emotional connection with

its users by establishing a deep fan culture, but as the

brand expands globally, how to maintain this culture

in different markets will become more complicated.

Xiaomi needs to maintain the loyalty of its existing

fan base while attracting new users and ensure that

the fan culture is not over-commercialized or

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homogenized. In addition, how to shape and spread

this unique brand culture in different cultural contexts

around the world will be one of the key factors for the

success of Xiaomi's future brand strategy.

These challenges highlight the complexity of

Xiaomi in future competition. Although its current

marketing strategy and brand heterogeneity have won

it market share, in order to consolidate and enhance

this advantage in the process of continuous

innovation and global expansion, Xiaomi must

constantly adjust its strategy to ensure that its brand

culture and technological innovation always remain

at the forefront.

8 CONCLUSION

Xiaomi's success can be attributed to its unique

marketing strategy heterogeneity, which is not only

reflected in the differentiation of prices and products,

but also in the establishment of a deep emotional

connection with users through the innovation of brand

culture. Through the brand positioning of

"technological universalism" and the "high cost-

effectiveness" strategy, Xiaomi has achieved efficient

use of resources and met the needs of global users for

high-quality, cost-effective technology products. This

strategy has enabled Xiaomi to stand out in the

fiercely competitive market and created a competitive

advantage that is completely different from

traditional high-end brands.

At the same time, Xiaomi has surpassed the

traditional product-consumer relationship by

establishing a deep fan culture. Xiaomi not only

maintains close contact with users through platforms

such as the MIUI Forum and Xiaomi Community, but

also successfully transforms users into co-creators of

the brand by allowing fans to participate in product

innovation and design. This combination of low price,

high efficiency and emotional resonance has become

the differentiated advantage of the Xiaomi brand,

helping it to form a unique competitiveness in the

global market.

From the perspective of marketing strategy

heterogeneity, Xiaomi has not only reduced the

pressure of market competition through the

differentiation of brand culture, but also improved the

brand's focus and efficiency. According to the

differentiation theory, Xiaomi has successfully

differentiated itself from its competitors and

established its unique position in the market by

increasing its market share and user loyalty through

its unique value proposition. Xiaomi's success

demonstrates the key role of marketing strategy

heterogeneity in building competitive advantages,

attracting consumers, and improving market position.

The results of this study are helpful for new

entrepreneurs to provide new marketing strategic

directions, and further demonstrate the relationship

between marketing strategy heterogeneity and brand

success. However, this paper still has certain

objective limitations. For example, only studying the

single company case of Xiaomi may not represent the

entire industry or other enterprises. Due to differences

in business strategies, market positioning, and

innovation capabilities, different companies may

have different conclusions, so Xiaomi's success may

not be generalizable. Similarly, Xiaomi has only a

history of more than ten years, and Xiaomi's business

model, market positioning, and product strategy may

change greatly over time. Therefore, the data and

cases used in the study may not fully reflect its future

trends or current operating conditions. In view of the

limitations of existing research, in the future, longer-

term research on Xiaomi's strategy, technology,

marketing, globalization can be conducted to provide

richer and more forward-looking theoretical support

for future corporate innovation and business model

development.

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