China's Xiaomi will concentrate on growing its retail sales in India after years of significant bets on e-commerce, according to its India president, as the company attempts to catch up to South Korea’s Samsung in the smartphone market. With 600 million smartphone users, India is one of the fastest-growing markets in the world, and e-commerce …
China’s Xiaomi will concentrate on growing its retail sales in India after years of significant bets on e-commerce, according to its India president, as the company attempts to catch up to South Korea’s Samsung in the smartphone market. With 600 million smartphone users, India is one of the fastest-growing markets in the world, and e-commerce sales via Amazon and Walmart’s Flipkart have increased significantly in recent years. Although 44% of Indian smartphone sales are now made online, Xiaomi still sees the brick-and-mortar market as having a larger potential for growth.
Xiaomi’s India CEO, Muralikrishnan B., stated in an interview on Friday that “our market position in offline is significantly lower than what it is online.” “Offline is where you have other competitors who have been operating fairly well and have a larger market share.” According to data from Hong Kong-based Counterpoint Research, only 34% of Xiaomi’s India unit sales this year came from retail outlets, with the remainder coming from the company’s long-dominant website. Samsung, in comparison, receives 57% of its revenues through stores. Beyond the current 18,000 locations, Xiaomi aims to increase its retail network and partner more frequently with phone manufacturers to provide more products, such Xiaomi TVs or security cameras, where Muralikrishnan claimed there is less fierce competition. He said Xiaomi discovered several partner stores that prominently displayed rival brands inside while putting its bright orange branding outside of shops, a marketing issue the company would address. Xiaomi is making an offline effort after losing the top spot to Samsung many months ago because Samsung had a larger selection of the high-end smartphones that are currently in vogue. Xiaomi, which has typically concentrated on low-cost phones, has a 16% market share in India compared to the South Korean giant’s 20%. “Offline remains a key platform as India embraces the premiumization trend,” said Counterpoint analyst Tarun Pathak. “Consumers spending more would like to have the look and feel of the premium product.”
Xiaomi plans to increase the number of shop promoters – salespeople that entice, pitch, and sell phones to potential customers within outlets. According to Muralikrishnan, the goal is to triple the number of promoters from early 2023 levels to 12,000 by the end of the following year. The $673 million bank assets that have been frozen by a federal agency since last year represent another substantial barrier for Xiaomi in India. According to the agency, Xiaomi sent unauthorized payments to foreign organizations under the presence of royalties. The company denies wrongdoing. “We’ll continue to be confident … that ultimately our position will be heard and validated,” Muralikrishnan said.
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