Xiaomi’s Marketing Plan? Counter Apple, Samsung's Million-Dollar Ad Buys With Viral Events, Fanatical Fans

How does a growing smartphone manufacturer gain customers? Well, some might say -- spend millions of dollars on marketing. Then there’s Xiaomi, which is letting its fans do the heavy lifting. Hugo Barra, Xiaomi’s senior vice president, reiterated this strategy in an interview Tuesday at World Mobile Congress. “We don't spend pretty much any money buying media, maybe [just] a little money boosting a Facebook post,” he said.

The Chinese company, which launched in 2010, has rocketed to fame in the last year. Xiaomi sold about 61 million smartphones in 2014, going head-to-head with heavyweights like Samsung and Apple, which spend millions on marketing. In 2013, Samsung spent $363 million on advertising in the U.S. alone, while Apple spent $351 million, according to consulting firm Kantar Media.

Xiaomi is leaving it to its fans to spread the word, and its products to attract new customers. Barra said the freshness and geeky aspect of Xiaomi has attracted early adopters who don’t want products that are plastered with advertisements. Brand loyalty for Xiaomi is so intense that customers eagerly promote the company through word-of-mouth and send holiday gifts to CEO Lei Jun.

Enthusiasts have coined the term “Mi-fans,” and even celebrate “Mi-fan Day” on April 6. Xiaomi uses this opportunity to host events and announce products. This attentiveness to fans has translated into Xiaomi’s devices selling out within minutes. The Xiaomi Mi Note was gone within three minutes on its Jan. 27 launch day, for example. “Brand is very important. But what is more important is freshness of brand,” Barra said.