BUSN20016 Research Proposal: Flash Sales Impact - Xiaomi India

This research proposal investigates the impact of online flash sales on consumer behavior, using Xiaomi's success in the Indian market as a case study. The study aims to assess the effectiveness of flash sales in influencing customer purchase behavior, particularly impulse buying, and to analyze Xiaomi's marketing strategies in India. It examines the attitude of Indian consumers toward 'hunger driven' marketing, evaluates the cost-effectiveness of Xiaomi's strategies compared to competitors, and identifies potential issues associated with flash sales. The research employs a mixed-methods approach, including survey research, questionnaire methods, and secondary data analysis. The proposal outlines the organization of the study, budget, project activities, and a Gantt chart for timeline management. The research seeks to compare flash sales with other promotional activities, understand the creation of urgency in marketing, and identify aspects of flash sales that might negatively impact consumer perception. The study hypothesizes the impact of flash sales on consumer perception, impulse buying, and cost-effectiveness, and aims to contribute to the understanding of flash sales in the e-commerce context.

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

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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

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 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,

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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.

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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

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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