Xiaomi in the MENA Region: A Potential Entry Strategy in Morocco

The digital age has dramatically impacted the marketing tools and forever transformed the branding strategies and brand-customers’ relationships. Marketers had to adapt themselves to an era characterized by a well-informed and highly discerning customer that is not anymore the passive recipient of communication means but rather the active influencer of a sizable portion of potential others. Engaging the customers with the brand and the larger organization is crucial to sustain the two-way conversation expected by customers and this, oftentimes, is achieved through social media and new digital networking platforms. In order to demonstrate the impact of the digital age on marketing and organizations’ business models, I have analyzed the business model of Xiaomi, a Chinese tech start-up that entirely built its brand on customers’ involvement and the larger Internet environment. In order to increase the consumers’ engagement, the company makes them an intrinsic part of its creation team by asking them for feedback, beta version testing and ideas suggestions. The company is mostly known as a smartphone provider. However, it positions itself more broadly as an Internet company aiming at creating a connected lifestyle through the creation of an Internet ecosystem where it would provide Internet services (e.g. banking, music, gaming) for all consumers to use. The ultimate objective of the company thereby lies in monetizing customers’ engagement with the brand through the purchase of a smartphone that serves as the main vehicle leading to its Internet platform of interconnected digital services. The Internet enabled the company to raise awareness among its targeted segment (i.e.: young emerging middle-class willing to purchase high quality devices but who does not own yet the purchase power to do so), to create the buzz around its products through scarcity marketing and enlarge its customer-base through positive e-WOM, all this without spending a single Yuan on advertising. In order to determine whether such a strategy would work on the markets of the MENA region, the region that will witness the fastest smartphone adoption growth in the next thee to five years, right after sub-Saharan Africa. For reasons pertaining to feasibility and length, it analyzing every single country of the Middle East and North Africa was impossible to study all countries of the region. I have thus narrowed down the scope of my research to one specific market. Considering the growing importance of Morocco as an African hub and its being one of the most advanced countries of the continent it terms of telecommunications, providing an entry strategy on this market made complete sense. In order to devise a sound strategy, I proceeded to the thorough analyses of the country’s political and economic contexts as well as the social and cultural norms that might impact Xiaomi. A market research was conducted in an attempt to better understand the shopping habits of young Moroccan consumers living in urban areas and determine how they would position themselves with regard to the main dimensions of the Chinese start-up’s business model. Drawing upon these analyses and the results of my market study, I will expose what dimensions should be adapted and what advantages the company should rely on to succeed in the country.