Xiaomi black market: Flash sale is worse than OnePlus' invite system ever was

Xiaomi’s push to the Indian market has been received with positive reviews, with devices like the Redmi Note 4 topping charts in terms of sales volume on 2017, and the newly launched Redmi Note 5 and Note 5 Pro setting even more records.

But all the best trying to buy one. Although Xiaomi is imposing region-based limitations on Note 5 sale, that isn’t helping either. Becuase of huge demand and relatively short supply — even though they are selling 300,000 units per sale — users are still left scratching their head what more they have to do buy the Redmi Note 5 Pro, whose demand-supply deficit seems to be bigger than any smartphone, ever.

But that isn’t the worst part. Yes, there’s more organized frustration to this: If you look up for Redmi Note 5 Pro in a local market, you would find people selling the device and — you guessed it – -for a hefty premium.

A black market exists for Xiaomi phones

Available for INR 13,999 from Xiaomi, people are selling the device for a minimum of INR 14,990 to about INR 15,500 (this figure keeps changing, but I have found this more often than not in my city, Bhilwara).

Knowingly or not, Xiaomi has created a black market for its own devices. It seems some people are actually buying the device to only sell it for a premium of about 5-10%. This, in essence, is the result of actual buyers not being able to buy the device from Xiaomi right away, because people with advanced knowledge and tricks up their sleeves are booking the device.

It gets tricky!

We said tricks and advanced knowledge because if you look up on the Internet for ‘how to buy Redmi Note 5 Pro quickly’ you will find a variety of results — mostly hacks — to help you with that.

In fact, a regular user may simply not be able to become scarce at the time of sale — when the clock hits 12PM, time of Xiaomi’s recent sales — and if he’s late by even a few minutes, the devices are already out of stock. The wait continues for 7 more days, now.

This is what is happening to many users who intend to buy Redmi Note 5 Pro, and failed to do so on February 14, February 21, February 28, and March 07, 2018.

The scenario we’re talking here doesn’t apply only to Redmi Note 5 and Redmi Note 5 Pro. In fact, more than a few months old now, the Redmi 5A is also still not easy to buy thanks to the flash sale system.

Xiaomi is milking it, too!

Beginning March 6, 2018, though, the Redmi Note 5 and Note 5 Pro also started selling through offline stores, but for INR 500 premium over online price. Oh, why? Because Xiaomi can do this. Although this means grabbing a Redmi Note 5/Pro will be a tad easier, but because Xiaomi doesn’t have many offline stores, it doesn’t help a lot.

But who is to blame for this?

The flash sale system is bad!

Doesn’t it suck, that Xiaomi’s flash sale system is creating a black market for genuine buyers — and even worse, Xiaomi is also charging a premium for making it available offline?

Well, we know there’s nothing wrong with the company selling products online at an unbeatable price, and charging a premium to cover up its costs of stocking the product on brick-and-mortar stores, but hey, there has to be a solution to this, right?

Also, it makes many casual, non-techie buyers depend on the tech guy in the house to buy the device for them. Because, it’s flash sale, you need to set up alarm for this, be ready for this, be able to operate your mobile a bit faster than usual, make sure Internet is working alright, and such. Not a rosy scenario for casual buyers, then.

Why Flash sale? To disguise ‘Out of stock’ scenario?

If a company has 2 million units of a device with it, how should it sell it to its consumers when it knows the demand exists for as many as 4 million units, especially when it knows it can have another 2 million units in about a month?

Well, if they sell 2 million in the first week, its product will go ‘out of stuck’ for about a month until next batch of 2 million units comes by. However, if it divides the sale of 2 million units into 3-4 flash sales, the product becomes available every week, until next month’s batch becomes available, and it can continue to do so for even a year. That was what happened with the Redmi Note 4, mind.

This way, consumers remain ‘hopeful’ to buy the device in next sale. On the contrary, if the company comes out and says that the given device is ‘out of stock’ for 3-4 weeks (until next batch arrives), users would know they have to wait for 3-4 weeks, compared to the false-wait of a single week under flash sale system. It’s obvious few users won’t like the idea of waiting 3-4 weeks, and may buy a competitor’s device. Even if people wait, their patience will break off easily after the 2nd flash sale when there is another clear wait period of another month. ‘Flash sale’ helps companies avoid this.