After years of betting on e-commerce, Xiaomi’s India president stated the company would focus on retail sales to catch up to Samsung.
Amazon and Walmart’s Flipkart have boosted e-commerce sales in India, one of the world’s fastest-growing economies with 600 million smartphone users, helping Xiaomi and others expand.
While 44% of India’s smartphone sales are online, Xiaomi expects the brick-and-mortar segment to rise.
“Our market position offline is substantially lower than what it is online,” Xiaomi India CEO Muralikrishnan B. said in an interview on Friday. “Offline, you have competitors doing well and having a larger market share.”
According to Hong Kong-based Counterpoint Research, only 34% of Xiaomi’s India unit sales have come from retail locations this year. Samsung sells 57% in shops.
Xiaomi intends to expand its retail network beyond 18,000 and partner with phone providers to sell other products like TVs and security cameras, where Muralikrishnan said competition is lower.
Xiaomi observed certain partner stores with bright orange logos outside were showing rival brands more prominently inside, a marketing issue the firm will solve.
Xiaomi’s offline push comes months after it lost its dominant position to Samsung, which had a larger portfolio of premium phones in vogue. Xiaomi, a bargain phone maker, has a 16% market share in India, while the South Korean giant has 20%.
Counterpoint analyst Tarun Pathak said offline is important as India embraces premiumization. “Consumers spending more want premium product looks and feel.”
Xiaomi aims to hire more shop promoters who pitch and sell phones in stores. Muralikrishnan said it aims to triple the number of promoters to 12,000 by 2023.
XiaXiaomi’s $673 million bank asset freeze by a federal agency since the previous year is another Indian challenge. Xiaomi allegedly remitted royalties to overseas organizations illegally. The company denies wrongdoing.
Muralikrishnan added, “We’ll continue to be confident… that ultimately our position will be heard and validated.