Impact of Online Flash Sales on Consumers: A Success Story of Xiaomi in the Indian Market

This research proposal investigates the impact of flash sales on consumer satisfaction with practical examples of performance of Xiaomi in the Indian market. It aims to assess the effectiveness of flash sales as a means of influencing customer purchase behaviour towards impulse buying.

Running Head: RESEARCH PROPOSAL 1
IMPACT OF ONLINE FLASH SALES ON CONSUMERS: A SUCCESS STORY OF XIAOMI
IN THE INDIAN MARKET
Author name
University

Research Proposal 2
Table of Contents
1.0 Introduction................................................................................................................................4
1.1 Problem Statement.................................................................................................................4
1.2 Aim and Objectives...............................................................................................................5
1.3 Research questions.................................................................................................................6
1.4 Justification and potential outcome of research.....................................................................6
2.0 Conceptual framework...............................................................................................................8
2.1 Flash sales..............................................................................................................................8
2.2 Impulse buying......................................................................................................................8
2.3 The hunger driven market and flash sales.............................................................................9
2.4 Growing e-commerce industry in India.................................................................................9
2.5 Flash sales applicability.......................................................................................................10
3.0 Research hypotheses development..........................................................................................12
4.0 Research methodology.............................................................................................................13
4.1 Survey Research..................................................................................................................13
4.2 Questionnaire method..........................................................................................................14
4.3 Longitudinal method............................................................................................................14
4.4 Secondary data method........................................................................................................15
5.0 Organisation of the study, budget, project activities and Gantt chart......................................17

Research Proposal 3
5.1 Organisation of the study.....................................................................................................17
5.2 Budget..................................................................................................................................17
5.3 Project activities and task schedule.....................................................................................18
5.4 Gantt chart..........................................................................................................................19
References......................................................................................................................................20

Research Proposal 4
Impact of online flash sales on consumers: A success story of XIAOMI in the Indian market
1.0 Introduction
India, currently, is the second largest smartphone market of the world where several
national and international companies compete to acquire consumer preference, endowing the
consumers with a large number of options to choose from. In such market environment, business
organisations need to spend considerable amount of their resources to attract sales. However,
performance of XIAOMI in its last four years of operations in Indian indicates towards the
success of its marketing efforts in acquiring and retaining the attention and preference of Indian
consumers (Singh, 2013). The flash sales played a major role in achieving this position.
However, in recent years, limitations of flash sales, has been observed that need to be addressed
for maintaining its applicability in the future promotional activities of XIAOMI (Mehta, 2016).
This assignment aims to provide a guideline for a research on the impact of flash sales on
consumer satisfaction.
For this, the assignment is segregated in five different parts. The first or the introductory
part avails an insight into the research problem, aim, objectives, research questions, justification
and potential outcome of the project. The second and third part of this assignment provides
conceptual framework and research hypotheses respectively, while the fourth part outlines the
research methodology. Finally, the fifth part includes outlining organisation of the research
study, project activities, budget and schedule.
1.1 Problem Statement
The flash sales activities are one of the key means of promotion and sales for XIAOMI in
India. The strategy cost less compared to other means of sales and marketing that the brand and

Research Proposal 5
its competitors used, yet delivered better result by developing a sense of urgency and need
among the customers, leveraging impulse buying (de Melo, Leone & Jose, 2015). Since its entry
in the Indian market in 2014, the organisation has been able to acquire 23.5% market share by
the end of 2017, while its competitors like Samsung, Oppo, Lenovo and Vivo either merely
retained their market share or lost their share (Sushma, 2017). Moreover, by 2016, XIAOMI
began to utilise additional sales measures along with flash sales. In a news report, Aulakh (2016)
suggested that the days of flash sales are over and the consumers in Indian e-commerce
environment have grown weary of the flash sales that companies arrange twice every week.
Therefore, this research study would investigate the impact of flash sales on the consumer
buying behaviour and its applicability in future marketing and sales practices, with practical
examples of performance of XIAOMI in Indian market. It is expected to compare the cost-
effectiveness and applicability of flash sales with the promotional activities, undertaken
XIAOMI and its other competitors in India. Result of this research is expected to reveal
applicability of flash sales for different promotional, sales and operational purposes.
1.2 Aim and Objectives
This research aims to investigate the effectiveness of flash sales as a means of influencing
customer purchase behaviour towards impulse buying. For this, the research issue would be
evaluated based on the practical examples of flash sale activities of XIAOMI in the Indian
market and their result.
The research objectives are as follows:
 To assess the impact of flash sales on the purchase behaviour of customers
 To examine the marketing strategies undertaken by Xiaomi Inc. in Indian market

Research Proposal 6
 To analyse the attitude of Indian customers towards the hunger driven marketing
 To critically evaluate the cost-effectiveness of marketing strategies of XIAOMI
compared to its competitors
 To determined potential issues associated with flash sales
1.3 Research questions
The primary research question for this study is,
How do Flash sales of XIAOMI influence the Indian consumers?
The subordinate research questions are,
 What are the different aspects of consumer behaviour that flash sales influence?
 What strategies does Xiaomi Inc. use to influence Indian consumer market?
 What is the reaction of Indian consumers towards hunger driven marketing?
 How cost-effective is the marketing strategy of XIAOMI in comparison with its
consumers?
 What issues flash sales activities of XIAOMI might entail?
1.4 Justification and potential outcome of research
The project is expected to compare flash sales with other promotional, marketing and
sales activities of XIAOMI and its competitors to understand its relevance in contemporary
market. It is also expected to explain the manner in which the creation of urgency through
marketing activities adds to the perceived value of a particular product hence, impulse buying,
paving the path for future studies in this field (Amos, Holmes & Keneson, 2014). The literature
linking social media presence of a company with success of their flash sales activities might be
relevant here as it explains the vast accessibility of the organisation in the target market (Chen,

Research Proposal 7
Su & Widjaja, 2016). The available literature linking the variables is few and very rarely
establishes a direct link between the flash sales and any aspect of consumer behaviour, other than
impulse buying. This study, however, is expected to investigate the impact of such sales
activities on consumer perception and identify different aspects of flash sales that might risk
negative consumer perception.

Research Proposal 8
2.0 Conceptual framework
2.1 Flash sales
Sahavashishta & Chadichal (2012) define flash sales as a channel for electronic
distribution used for heavily discounted, time-limited purchase in advance. Though it might be
true in some cases, this measure is used for both boosting sales and new product launch. While
many identify flash sales as a mere means of promotion or a way for inventory clearance it is
argued as an effective measure for increasing profitability of a product or service, acquiring new
customers, faster and higher market growth, meeting the need for filling the occupancy and
increasing exposure (Tu, Wu, Jean & Huang, 2017). Such sales activities also helps to reach new
market segments as the flash sales often serve as the means of first customer trial (Shi & Chen,
2015). As such sales processes increase the market presence of the brand it also encourages the
potential customers to acquire better knowledge regarding the brand leveraging better traffic to
organisational website. However, Brown (2018) pointed out that the failure in achieving the
product, due to the vast number of customers applying, often generates dissatisfaction. This
might not be in favour of the organisational image.
2.2 Impulse buying
Impulse buying is a complex purchase behaviour where the hasty, hedonic decision of
purchase leaves little scope for measuring options or assessing the consequence of such purchase
behaviour in part of the consumer. Amos, Holmes and Keneson (2014) identified that around
60% of the retail purchases belong to this category. The stimulus-organism-response model
explains that in case of online impulse buying the atmospheric cues of the e-commerce site such
as the design, system of navigation and the content of the product and its description influence

Research Proposal 9
the behaviour variables like willingness to spend and the act of buying itself (Floh &
Madlberger, 2013 and Chang & Tseng, 2014).
Social commerce, another branch of e-commerce, has also been at the forefront when it
comes to encouraging consumers to impulse buy a product allowing companies like XIAOMI,
with significant social media presence, succeed to attract impulsive buyers towards their flash
sales events (Xiang, Zheng, Lee & Zhao, 2016 and Soo, 2018). Hence, it can be deduced that
personal experience of social commerce like invitation to flash sales, positively influence the
purchase decision.
2.3 The hunger driven market and flash sales
Identifying the need of the consumers and catering to those needs just enough to keep
them wanting for more, instead of having surplus resources in the inventory that need otherwise
allocation is considered the key to the success of XIAOMI. Rawal, Awasthi and Upadhayay
(2017) identified that instead of manufacturing goods in bulk, at a time, XIAOMI kept its
customers craving for its products by manufacturing goods in small amount and in regular
intervals allowing it to incorporate innovative features in its models in frequent intervals.
However, excessive use of this strategy in the Indian smartphone market has also reduced its
appeal to consumers (Mehta, 2016).
2.4 Growing e-commerce industry in India
The e-commerce industry of India has exhibited rapid growth, which is expected to grow
even larger in the following years. Gangeshwer (2013) marked that the market for e-commerce
in India has been growing at an average rate of 70% per year. It has jumped from 3% in 2010 to
34% in 2014 (Mehta, 2017). Sujata, Menachem, Akshay and Viraj (2018) further suggested that

Research Proposal 10
this industry would grow larger and reach the worth around $20 billion by the year 2020. This
escalated growth of the industry has been attributed to the changed attitude of the Indian
consumers towards online shopping and increasing dependency of such customers upon e-
commerce sites. With over 314 million internet users, Indian market the mobile commerce avails
great prospect for flash sales and promotional activities in India (Agarwal & Dixit, 2017). This is
one of the major reasons for vast acceptance of XIAOMI in the Indian market, despite it being
from a different country.
2.5 Flash sales applicability
Flash sales, though primarily introduced by XIAOMI in the Indian market, by the end of
2014, had achieved the preference of its competitors in the Indian market such as Motorola, Asus
and OnePlus. While not exactly through the flash sales, OnePlus succeeded to grab the fancies of
Indian consumers through its innovative, innovative “invite only” model (Singh, 2013). Though
both the models are regretted to trigger the fancies of customers, the limited availability of the
products often limit the accessibility aspects of the product. In such circumstances, the in-store or
regular online sales of the bigger brands like Samsung and Apple receive the upper hand, in
terms of sales.
Yet, by the end of 2015, even these bigger brands to ensure rapid inventory clearance and
faster market penetration of newly launched product, adopted similar sales and promotional
strategies. However, by the second half of 2015 popularity of the flash sales declined
considerably due to the overuse of the model in the e-commerce platforms (Mehta, 2016). Even
the brands like XIAOMI that leveraged flash sales while entering Indian market began to
establish and strengthen an offline presence to improve the aspect of availability of products.

Research Proposal 11
Yet, the organisation uses this model at regular intervals to retain the interest of its customers
and maintain exhaustive sales of its new launches.
Figure 1: Conceptual framework
(Source: created by student)
Attractiveness of Flash sales offer
Impulsiveness
Intent to purchaseHedonistic influence
Risk perception
Atmospheric cues
Stimulus Organism Response

Research Proposal 12
3.0 Research hypotheses development
Based on the review of literature the following hypotheses have been identified that
validity of which would be investigated in due course of this research:
Hypothesis 1
 H0: Online flash sales are incapable of developing positive consumer perception
 H1: Online flash sales are capable of developing positive consumer perception
Hypothesis 2
 H0: Online flash sales do not inspire impulse buying
 H1: Online flash sales do inspire impulse buying
Hypothesis 3
 H0: Online flash sales are not cost-effective
 H1: Online flash sales are cost-effective
Hypothesis 4
 H0: Online flash sales are not suitable as a long-term sales strategy
 H1: Online flash sales are suitable as a long-term sales strategy

Research Proposal 13
4.0 Research methodology
4.1 Survey Research
The primary data would be collected from 200 customers of XIAOMI in India, through
an online survey. Respondents would be contacted by e-mail. Therefore, consumers of XIAOMI
in India would be the source of primary quantitative data. Ten close-ended questions would be
asked to the same customers of XIAOMI, India in two different periods, one before a flash sales
event of XIAOMI in India and the other after it. Population of this survey could include
consumers and marketing staffs of XIAOMI, India, and all the available secondary data on the
sales marketing, promotional activities and consumer behaviour. However, due to the lack of
time and resources the sample of this study has been limited to 200 customers of XIAOMI, India.
The convenience sampling technique of the non-probability sampling has been selected
for the sample. While unlike the simple random sampling technique of probability sampling
would allow the opportunity to careful selection of the respondents based on their association
with the research issue it would also allow the selection of the respondents based on their
convenient accessibility (Sekaran & Bougie, 2016). The total sample size for this survey would
be 200 customers of XIAOMI in India.
Inclusion criteria:
 Customer of XIAOMI in India
Exclusion criteria:
 Customers of companies other than XIAOMI

Research Proposal 14
 Customers of XIAOMI from countries other than India
Any other stakeholder of XIAOMI than customers
4.2 Questionnaire method
The survey questionnaire would contain 10 close-ended multiple-choice questions. The
questions would be developed based on Likert scale, semantic differential scale and nominal
scale. These questions would be sent to 200 customers of XIAOMI in India via e-mail in two
different periods (Hill & Alexander, 2017). The followers of the official pages of XIAOMI India
in social media sites would be contacted for participation in the survey and after acquisition of
their approval would be sent the survey form through either message or e-mail. The
questionnaire would contain questions exploring the aspects of sales of XIAOMI that attracted
them to purchase their products and their opinion on its flash sales.
4.3 Longitudinal method
Longitudinal research design would be applied for investigating the change in the flash
sales activities and their impacts on the Indian market (Bryman, 2016). The news and industry
reports would be studies for successful achievement of this target along with the survey results.
The longitudinal method has been undertaken as it would avail the opportunity to study the same
subject in different periods. For this, the primary data collection would be conducted in two
different stages. That is, the same survey questions would be asked to the customers of XIAOMI,
India over two different stages, first time, before a flash sale the second, after it. This would help
in recording the customer reaction to the flash sales over two different times, availing an insight
to the change in customer behaviour or perception towards the flash sales activities of XIAOMI
in India.

Research Proposal 15
This research would be developed as a longitudinal study examining the effect of flash
sales of XIAOMI in Indian market over period of its operation, in India until the present time and
the organisation has been operating in the Indian market since 2014. Therefore, the secondary
company-specific data would be acquired of that period to evaluate the changed approach of the
customers towards the flash sales activities of XIAOMI.
As this research is targeted towards investigation of the usefulness of flash sales in
enhancing performance of XIAOMI in the Indian market, its findings are expected to be context-
specific. Therefore, deductive approach would be useful in this study to ensure the success of the
longitudinal research design (Dolnicar & Ring, 2014).
4.4 Secondary data method
For academic understanding of the research, issue and its variables like flash sales and
customer behaviour theories and concepts on these topics would be studied from books, journals,
news reports and websites. Information on the growth of Indian e-commerce and changing
approach and preference of consumers regarding marketing strategies reflected through sales
performance of companies operating in smartphone market of India would be gathered from
news published online and industry and market analysis reports purchased from online or offline
secondary sources. Moreover, news, company reports, industry data and market analysis reports
would serve as the source of secondary market-specific data.
To evaluate the acquired quantitative data from the primary data collection process
descriptive statistics would be merged with simple graphics analysis (Sekaran & Bougie, 2016).
The acquired primary quantitative data would be transformed into tables and charts for
systematic representation and understanding. Then through statistical analysis tools such as

Research Proposal 16
mean, median, mode and standard deviation such data would be evaluated. Along with the
descriptive statistics analysis, hypothesis testing would be used for assessing the research
hypotheses, listed in the earlier section (Sekaran & Bougie, 2016).
The primary statistical data would be compared with the secondary data acquired on the
market and performance of XIAOMI in India compared to its competitors. It would also be
evaluated based on the theoretical understanding developed through the study of academic
theories, concepts and models of consumer behaviour and flash sales activities.

Research Proposal 17
5.0 Organisation of the study, budget, project activities and Gantt chart
5.1 Organisation of the study
The project report would contain five chapters each of which would address the research
issue and its variables in different ways.
 Chapter 1 would propose the research aim, objectives, explain its significance and direct
study towards detailed understanding of the research issue as outlined in this proposal.
 Chapter 2 would provide a detailed understanding of the impact of flash sales on the
buying behaviour of XIAOMI in India.
 Chapter 3 would avail an understanding of the methodology used for literature review,
data collection, sampling and data analysis along with an insight to the ethical aspects of
the research.
 Chapter 4 would present findings and analysis of the acquired data on flash sales of
XIAOMI in India, based on different analytical tools and methods.
 Chapter 5 would summarise the main findings from the previous chapter and link them
with the research objectives to examine success of the research. It would also enlist
recommendations for strategic improvement in XIAOMI’s Indian marketing and sales
activities.
5.2 Budget
The budget for the research is expected to be around $4500. Details of the budget
allocation are available in the following table:
Area of expenses Probable amount required / to be spent

Research Proposal 18
Literature review $1000
Data acquisition $2000
Data analysis $500
Presentation and submission $500
Additional expenses (transportation,
communication, stationary)
$500
Total $4500
Table 2: Estimated budget for the project
(Source: created by student)
5.3 Project activities and task schedule
Task Start End Duration
Initial Literature review 17/09/2018 21/09/2018 5
Research problem and methods identification 21/09/2018 22/09/2018 2
Research proposal 23/09/2018 27/09/2018 5
Further literature review 28/09/2018 02/10/2018 5
Market-specific secondary data collection 03/10/2018 12/10/2018 10
Primary data collection 06/10/2018 14/11/2018 40
Data analysis 14/11/2018 02/12/2018 20
Report (1st draft) 02/12/2018 09/12/2018 8
Review and improvement 10/12/2018 12/12/2018 3
Report (final draft) 10/12/2018 14/12/2018 5
Final submission 15/12/2018 15/12/2018 1

Research Proposal 19
Total days = 90
Table 3: Activities and schedule
(Source: Created by student)
5.4 Gantt chart
Literature review
Problem and methods
Research proposal
Further literature review
Industry data collection
Primary data collection
Data analysis
Report (1st draft)
Review and
improvement
Report (final draft)
Final submission
17-Sep 27-Sep 7-Oct 17-Oct 27-Oct 6-Nov 16-Nov 26-Nov 6-Dec 16-Dec
Gantt chart
(Source: Created by student)

Research Proposal 20
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Research Proposal 21
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Research Proposal 22
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Research Proposal 23
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