Xiaomi Plans to Enhance Smartphone Sale in India as Samsung Struggles

China’s Xiaomi will give attention to boosting its India gross sales from stores after years of huge bets on e-commerce, its India president mentioned, as the corporate seeks to revive smartphone gross sales after falling behind South Korea’s Samsung.

E-commerce gross sales in India through Amazon and Walmart‘s Flipkart have surged in recent times, serving to Xiaomi and others broaden in one of many world’s fastest-growing markets, with 600 million smartphone customers.

But whereas 44 p.c of India’s smartphones gross sales at the moment are on-line, the brick-and-mortar section stays the larger play and Xiaomi expects it to develop additional.

“Our market position in offline is substantially lower than what it is online,” Xiaomi’s India head, Muralikrishnan B, mentioned in an interview on Friday. “Offline is where you have other competitors who have been executing fairly well and have a larger market share.”

Just 34 p.c of Xiaomi’s India unit gross sales this 12 months have come from retail shops, with the remaining by means of web sites which have lengthy been its dominant gross sales generator, knowledge from Hong Kong-based Counterpoint Research reveals. Samsung, in distinction, will get 57 p.c of its gross sales from shops.

Xiaomi plans to broaden its retailer community past the present 18,000 and more and more companion with telephone distributors to supply different merchandise, corresponding to Xiaomi TVs or safety cameras, the place Muralikrishnan mentioned competitors is much less intense.

He mentioned Xiaomi discovered some companion shops that put its vibrant orange branding outdoors retailers have been displaying rival manufacturers extra prominently inside, a advertising and marketing challenge the corporate would deal with.

Xiaomi’s offline push comes months after it misplaced its management place to Samsung, which had a a lot greater portfolio of premium telephones now in vogue. The South Korean large has a 20 p.c market share in India, whereas Xiaomi, which traditionally focussed on funds telephones, has 16 p.c.

“Offline remains a key platform as India embraces the premiumisation trend,” mentioned Counterpoint analyst Tarun Pathak. “Consumers spending more would like to have the look and feel of the premium product.”

Xiaomi plans to rent extra retailer promoters — salespeople who lure, pitch and promote telephones to potential consumers inside retailers. It targets tripling the rely to 12,000 promoters by the top of subsequent 12 months from early 2023 ranges, Muralikrishnan mentioned.

Another important India problem for Xiaomi is a federal company’s $673 million (practically Rs. 5,500 crore) freeze on its financial institution belongings since final 12 months. The company alleges Xiaomi made unlawful remittances to international entities within the title of royalties. The firm denies wrongdoing.

“We’ll continue to be confident… that ultimately our position will be heard and validated,” Muralikrishnan mentioned.

© Thomson Reuters 2023