Xiaomi eyes offline market pie, steps away from Flipkart

Xiaomi goes offline in a bid to scale its own e-commerce operations in India

Written by Shruti Dhapola | Updated: March 4, 2016 4:06 pm
Xiaomi's Hugo Barra literally turned himself into demigod of Mi devices at the Redmi Note 3 launch (Source: Nandagopal Rajan) Xiaomi’s Hugo Barra literally turned himself into demigod of Mi devices at the Redmi Note 3 launch (Source: Nandagopal Rajan)

Xiaomi Redmi Note 3’s India launch on Thursday saw two, less reported, announcements. One was of course that the new, premium Mi 5 smartphone will be coming to India in April, just one month after going on sale in China. The other was that the company’s smartphones will also soon be available in offline retail as well.

This marks a new step in Xiaomi’s India strategy. When the company’s smartphones were first launched in India, they were Flipkart exclusive for the longest time and Xiaomi had specialised in creating a buzz around its flash sales model. Later on, Redmi phones like Redmi 2, Redmi 2 Prime, etc were made available on Amazon and Snapdeal as well and even rolled out to some Airtel stores.

Also Read: Xiaomi Redmi Note 3 First Impression: Meet the new budget smartphone king

With the new Redmi Note 3, Xiaomi has gone for an exclusive online partnership with Amazon in the initial weeks. But the phone will be available on other platforms soon after, including offline. For Xiaomi, which is looking to expand its growth in India, the move shouldn’t come as a surprise.

A recent IDC study showed that while the country’s top five cities saw 61 per cent of smartphone sales take place via online in the October-December quarter, tier 2 and tier 3 cities is where the real growth lies. IDC’s study shows that increasing data penetration and enhanced a reach of e-commerce is making smartphone consumers in tier 2 and 3 cities is becoming more aware and demanding of smartphones with latest specs and features. And Xiaomi, which is known for launching specs-heavy devices at rock-bottom prices wants to ensure that these users can easily buy its Redmi and Mi devices.

Must Read: Indian manufacturers face heat as Apple makes inroads into urban India: IDC

Xiaomi itself claims to have shipped to over 1,500 locations in India. While the company saw an initial demand from the big cities when it first launched in India in 2014, it says that by 2015, it had increasing demand in tier-2 and tier-3 cities. And the Chinese player is not the only one going offline. Micromax’s YU brand, which was initially launched as online-only, is now also available offline. Motorola, which came to India via the online only model has now made its premium Moto X Force smartphone available offline too.

Xiaomi Redmi Note 3 offline, Redmi Note 3 Amazon, Redmi Note 3 Mi.com, Redmi Note 3 Flipkart, Redmi Note 3 sale, Redmi Note 3 registrations, Xiaomi Redmi Note 3 offline sale, Redmi Note 3 launch, smartphones, MIUI 7, Android, tech news, technology Xiaomi launched its latest metal unibody design Redmi Note 3 smartphone at a budget price of Rs 9,999 (Source: Nandagopal Rajan)

One of the biggest online success stories, however, has been LeEco which now claims over 2,00,000 online sales in its first month in India. Even Lenovo, which is now placed No 3 in the smartphone market, thrives on the online model though it also moves these SKUs to offline sales in a few weeks.

What is also interesting is that the Redmi Note 3 will be exclusively available on Mi.com in the early phase of the launch. Xiaomi has already indicated that it plans to scale up its own e-commerce operations in India.

“We want to scale up our own e-commerce offerings in India, both on the front-end and back-end. In China, we’re not just a smartphone company, but also big on the e-commerce front and this is an area we want to improve in India as well,” Xiaomi India head Manu Jain had told Indianexpress.com in an earlier interaction.

“India is an important market for us,” Hugo Barra, Xiaomi’s International Vice-President said at the Redmi Note 3 launch, reassuring the fans in the crowd that the ‘Mi India’ magic was still alive. By making it smartphones available offline as well, Xiaomi is making sure that the Mi magic goes beyond the online world.

Watch: Xiaomi Redmi Note 3 First Look