of China xiaomi will focus on boosting its sales in India through retail outlets after years of big bets Ecommercesaid its Indian president as the company tries to boost smartphone sales after falling behind those of South Korea Samsung.
Ecommerce sales in India over Amazon And Walmart‘S flip card have grown rapidly in recent years, helping Xiaomi and others expand in one of the world’s fastest growing markets of 600 million people smart phone User.
But while 44 percent of smartphone sales in India are now online, the brick-and-mortar segment remains the larger market and Xiaomi expects it to grow further.
“Our market position in the offline area is much lower than in the online area,” said Xiaomi’s India boss Muralikrishnan B in an interview on Friday. “Offline is where there are other competitors that are doing pretty well and have a bigger market share.”
Just 34 percent of Xiaomi’s unit sales in India this year came through retail stores, with the rest coming through websites, which have long been the top revenue generators, data from Hong Kong-based Counterpoint Research shows. Samsung, on the other hand, generates 57 percent of its sales in stores.
Xiaomi plans to expand its network of stores beyond the current 18,000 and increasingly partner with phone carriers to offer other products like Xiaomi TV or security cameras, where Muralikrishnan said competition was less intense.
He said Xiaomi found that some partner stores, which displayed their bright orange branding outside stores, presented rival brands more prominently inside, a marketing issue the company would address.
Xiaomi’s offline push comes months after the company lost its leadership position to Samsung, which has a much larger portfolio of premium phones that are currently trending. The South Korean giant has a 20 percent market share in India, while Xiaomi, which has historically focused on budget phones, has 16 percent.
“Offline remains an important platform as India embraces the premiumization trend,” said Counterpoint analyst Tarun Pathak. “Consumers who are spending more want the look and feel of a premium product.”
Xiaomi plans to hire more store promoters – sellers who will lure, advertise and sell phones to potential buyers in the stores. According to Muralikrishnan, the number is set to triple from early 2023 to 12,000 organizers by the end of next year.
Another big challenge for Xiaomi in India is a federal agency’s $673 million (nearly Rs.5,500 crore) crore freeze on bank balances since last year. The agency accuses Xiaomi of making illegal transfers to foreign companies in the name of royalties. The company denies wrongdoing.
“We will remain confident that our position will ultimately be heard and validated,” Muralikrishnan said.
© Thomson Reuters 2023
