Xiaomi’s flash sale model spawns black market for Mi 3 smartphones in India

By Sambit Satpathy on Aug 14, 2014 at 9:30 AM

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Buying a Xiaomi Mi 3 off Flipkart is a task easier said than done, and the chances of getting a device are almost equal to winning a lottery. In four sales that have happened so far, the company sold around 55,000 units, while more than 600,000 users registered across these four sales, many of them registering during multiple sales hoping to get their hands on the elusive smartphone. It is hardly surprising that this scarcity has spawned a black market of sorts, where several successful buyers are reselling the smartphone at a higher price on other e-commerce sites.

We found the Xiaomi Mi 3 on sale on e-commerce sites like eBay India, OLX and Quikr. The prices differed and seemed dependent upon the whims of the individual selling the device. On eBay India, we found the smartphone on sale from Rs 16,400 and going up to Rs 30,000 in some cases. There were also multiple auctions active on the site at the time of checking. It isn’t much different on Quikr or OLX either.
In addition to the higher price tag, there is also the case of warranty. While some listings specifically mention that the phone is bundled with a warranty and a bill from Flipkart, others don’t mention anything at all. We reached out to Xiaomi’s Hugo Barra, who confirmed that the company will honor warranties for smartphones that have a corresponding bill.
As for the classifieds on Quikr and OLX, Xiaomi’s India GM Manu Jain told BGR India that the company has reached out to these websites to take some listings down. He however admits that it is completely up to them if they want to take it down. In the meantime, the company and Flipkart have some steps in place to ensure buyers don’t get their hands on more than one unit per sale. These steps however don’t seem sufficient, and if the supply situation remains the same, it will only encourage this behavior of people actively buying the device during flash sales only to resell them at a higher price.