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Xiaomi to replicate Chinese offline retail model in India
Chinese smartphone maker Xiaomi, the world’s second most-valuable startup with an over $45-billion valuation, is looking at replicating the offline retail success that it found on its home turf, in India in hopes of boosting its smartphone sales.
Hyderabad: Chinese smartphone maker Xiaomi, the world’s second most-valuable startup with an over $45-billion valuation, is looking at replicating the offline retail success that it found on its home turf, in India in hopes of boosting its smartphone sales.
Known as the ‘Apple of China’, Xiaomi is one of the few global smartphone makers, including Apple, Oppo, Lenovo and LeEco, that applied for a single-brand retail licence. In June 2016, the Indian government has relaxed local sourcing norms up to three years, and a relaxed sourcing regime for another five years for firms undertaking single-brand retail.
“Like all other brands, we are waiting to hear back from the Indian government on this. In China, we already have around 20 ‘Mi Home’ large-format offline retail stores. Once we get the licence, we definitely want to open such Mi Home stores in India, while adhering to our philosophy of ‘starting small, experimenting and then expanding’. We will probably start with few stores in select Indian cities, and expand once we perfect the business model,” said Manu Jain, India Head, Xiaomi.
Xiaomi, which has been selling more than a million devices every single quarter for the last four quarters in India, currently sees 90 per cent of its sales coming in from online channels, including Flipkart, Snapdeal, Amazon, Paytm and mi.com, while it garners the remaining through offline partners Redington, Just Buy Live and InnoComm. In China, Xiaomi’s online-offline sales mix is 70-30 per cent.
“We don’t think offline will be the dominant channel for us in India. However, we are hoping that 25-30 per cent sales will start coming in from offline, beginning next year,” Jain said. Xiaomi on Friday launched two new smartphone models – Redmi 3S and 3S Prime – priced at Rs 6,999 and Rs 8,999, respectively, in the Hyderabad market.
The devices will be available for sale on Flipkart and mi.com from August 17, 2016. Redmi 3S and 3S Prime are manufactured at Xiaomi’s plant at Sri City in Andhra Pradesh, which is owned and operated by Taiwanese contract manufacturer Foxconn. Jain said the company would be adding more lines to increase capacity, besides setting up two more facilities in the country along with its partner Foxconn.
On Xiaomi’s plans to introduce new products in the Indian market, Jain said while the company was gearing up to launch its air purifiers anytime soon, it had cautiously not launched its smart TV as it was trying to finalise the content strategy. “Hopefully, it will be launched next year.”
To build its content ecosystem and add new technologies, Xiaomi has so far invested in 55 startups in China, including four unicorns and a few that are still in the stealth mode. In India, it made its first investment by leading a $25-million funding round in digital media firm Hungama Digital Media in April 2016. “We are definitely looking at many mobile tech startups in India, either to make investments or enter into strong strategic partnerships,” Jain added.
By K Rajani Kanth
