China’s Xiaomi intends to enhance its sales in India by focusing on retail outlets instead of relying solely on e-commerce platforms, according to the company’s India president. Xiaomi aims to boost smartphone sales after falling behind South Korea’s Samsung. E-commerce sales via Amazon and Flipkart have thrived in India, contributing to the expansion of Xiaomi and other smartphone brands in this rapidly growing market with 600 million smartphone users.
Although online sales currently account for 44% of smartphone sales in India, Xiaomi recognizes that the brick-and-mortar segment remains significant and anticipates further growth. Muralikrishnan B, Xiaomi’s India head, emphasized the need to improve their market position offline and acknowledged the strong competition and larger market share of other players in this segment.
The data from Counterpoint Research reveals that only 34% of Xiaomi’s India unit sales this year originated from retail stores, whereas Samsung’s sales are predominantly derived from stores at 57%. To address this gap, Xiaomi plans to expand its store network beyond the existing 18,000 outlets. Additionally, the company intends to form partnerships with phone vendors to introduce other products like Xiaomi TVs and security cameras, where competition is less intense.
One challenge Xiaomi faces in India is its bank assets frozen by a federal agency since last year, amounting to $673 million (approximately Rs. 5,500 crore). The agency alleges that Xiaomi made illegal remittances to foreign entities under the guise of royalties, a claim Xiaomi firmly denies.
To enhance their offline presence, Xiaomi aims to increase the number of store promoters by threefold, adding 12,000 promoters by the end of next year. These promoters actively engage with customers, providing information and selling phones within retail outlets.
According to Counterpoint analyst Tarun Pathak, offline platforms are vital as India embraces the trend of premiumization. Consumers who invest more in premium products desire the tactile experience and physical appearance that offline stores offer.
In other news, Xiaomi recently launched the Nothing Phone 2, sparking discussions on whether it will serve as a successor to the Phone 1 or coexist alongside it. For more information on this topic and other tech news, tune in to the latest episode of Orbital, the Gadgets 360 podcast, available on Spotify, Gaana, JioSaavn, Google Podcasts, Apple Podcasts, Amazon Music, and other podcast platforms.
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