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Xiaomi’s Hugo Barra: We apologize for frustrating consumers; underestimated demand in India

Xiaomi’s Mi 3 might be the best value for money Android smartphone in the Indian market but so far it has only frustrated hundreds of thousands of consumers who want to buy it. Available exclusi

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Xiaomi’s Mi 3 might be the best value for money Android smartphone in the Indian market but so far it has only frustrated hundreds of thousands of consumers who want to buy it. Available exclusively on Flipkart, the first batch of devices sold out in under 40 minutes, the second in 5 seconds and today’s batch of 15,000 units in mind blowing two seconds. So far, over 350,000 people had pre-registered hoping to buy approximately 35,000 units of the smartphone. In conversation with BGR India, Xiaomi’s vice president of international operations, Hugo Barra, today apologized for frustrating consumers in India and admitted that the company underestimated demand in the country.

“We apologize for frustrating consumers in India and I say that with a hand on my heart. We are doing everything possible to improve,” Barra said in a telephonic interview.

Xiaomi is known for organizing flash sales where its devices are picked up in minutes but India is the first market where the sale has lasted for mere two seconds. A part of the problem is limited inventory that has been available, with demand reaching over 10 times the available stocks.

“We completely underestimated the demand in India. We opened our Facebook page a month before the launch and we used the interaction there to judge the demand. We have used the same model in every market. At the launch date we had less than 10,000 followers. Even on our website we had thought getting 100,000 followers would be easy. But that didn’t happen. India is a different market where word of mouth spreads,” he said.

Unfortunately, the situation is unlikely to improve any time soon. “We can’t react that quickly. The product in India are made for India – packaging, labeling and software. Unlike other brands we cannot react so quickly since we are a start up. We do have a manufacturing constraint that many won’t understand. We don’t have idle manufacturing capacity. We have to wait for the next manufacturing cycle as they are based on our forecasts for individual markets,” Barra explained.

Xiaomi has received a lot of flak from consumers for its “flash sale” model with limited number of units available and one has to pre-register and still compete with thousands of others to buy the device. However, Barra continues to believe that is the best model for Xiaomi.

“We like the model, it is a simple model. Everyone knows if they want the phone where to buy it and when to buy it. It may not be something that Indian consumers are used to but we will continue to use it in India for the foreseeable future,” he said.

However, Barra admits that they continue to tweak the model to make it better. In today’s sale, Xiaomi had announced the number of units that will be available for sale and the number of pre-registrations. “We are trying to be as transparent as possible,” he added.

“We are still learning about the Indian market. I think no matter how you change this model and we have brainstormed about tweaks to the model, people would have been upset if in the end they don’t get what they want,” Barra said.

Xiaomi continues to ramp up the supply of devices. After selling 20,000 units in the first two sales, it made 15,000 units available today. Barra promises that next week there will be a larger number of units available.

The Chinese smartphone vendor still hasn’t finalized the launch date for the Redmi 1S and Redmi Note, both sub-Rs 10,000 smartphones that are expected to receive even higher demand. Even accessories for the Mi 3 have been delayed, though Barra says they should be available in the next couple of weeks, adding that the next product launch (Redmi 1S) will be available with accessories in tow.

On the day the Mi 3 first went on sale, Xiaomi also unveiled its successor, the Mi 4 in China. However, its India launch is still a little far off as Xiaomi will launch the LTE version in India. Barra did not provide any timeline for the Mi 4 launch in India.