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Xiaomi to open largest Mi Home store in Gurgaon, reveals big plans for offline expansion

Xiaomi, the second largest smartphone brand in India this quarter, is looking seriously at online and will launch its fourth and largest Mi Home store in Gurgaon on August 19. Xiaomi India managing director Manu Jain said the store, the first outside Bengaluru, will open at Ambience Mall.

Written by Swapnil Mathur |
Updated: August 18, 2017 9:01:57 am
Xiaomi, Xiaomi India, Mi Home, Mi Home gurgaon, Manu Jain, xiaomi news, redmi, technology news, indian express news Currently, Xiaomi has the highest number of sales at 8 of the 12 large format stores it has partnered up with. (Representational image)

Xiaomi, the second largest smartphone brand in India this quarter, is looking seriously at online and will launch its fourth and largest Mi Home store in Gurgaon on August 19. Xiaomi India managing director Manu Jain said the store, the first outside Bengaluru, will open at Ambience Mall.

For the first three years in India, Xiaomi operaed exclusively in the online space. Now, however, the Chinese smartphone maker has to expand aggressively in the offline retail space, though the strategy is very different from other companies in the smartphone space. Typically, the smartphone distribution channel has so many middlemen involved that by the time the phone travels the length of the channel, the retail price goes up significantly. Given that people have come to expect Xiaomi to provide phones at a budget, there was no way the company could follow the traditional model.

The first retail channel is in partnership with Large Format Retailers like Croma, Vijay Sales, and who sell Xiaomi smartphones at a marginal mark-up. This works well for Xiaomi as the company gets exposure to a large number of potential customer piggybacking on the popularity of the retail chain. The second retail channel for Xiaomi is its network of Preferred Partners, retailers who have a smaller number of stores across a city. These stores provide Xiaomi a space for dedicated branding and in return, the company provides the sales people training on not just Xiaomi smartphones, but also on the technology in general. Xiaomi’s strategy with the Preferred Partner store is what has allowed the company to grow the contribution of offline sales from 4.5 percent (to overall sales) in January 2017 to 20 per cent in July 2017. By partnering up with only a small number of stores in various dense areas, Xiaomi has ensured not just higher footfall, but also higher revenue for these partners. Jain shared that revenue for Preferred Partner stores has gone up by a minimum of 2x to as much as 5x.

While Large Format Retailers and Preferred Partners have greatly contributed to Xiaomi’s growth in the offline space, Xiaomi has also started establishing Mi Home stores across the country where potential buyers will be able to experience the entire Xiaomi ecosystem of devices before they purchase them. The stores are designed to emulate a homely environment with large open spaces where customers can just go and experience Xiaomi devices for as long as they like before making a purchase decision.

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Xiaomi, Xiaomi India, Mi Home, Mi Home gurgaon, Manu Jain, xiaomi news, redmi, technology news, indian express news Xiaomi has developed a massive fan following in the country, which is substantiated by the fact that the Xiaomi Redmi Note 4 was the highest selling smartphone in India, ever. (Representational image)

Currently, Xiaomi has the highest number of sales at 8 of the 12 large format stores it has partnered up with. The company also has a network of about 600 Preferred Partner stores across 11 cities and on August 19, the company will have its fourth Mi Home store in the country. Manu Jain says the company hopes to have at least 100 Mi Home stores and a network of 1500+ Mi Preferred Partners across 30+ cities. The next set of Mi Home stores are set to open in Mumbai, Hyderabad, Chennai and Pune with other cities to follow.

Xiaomi is at a point where it can safely project this kind of growth in the offline space. Xiaomi has developed a massive fan following in the country, which is substantiated by the fact that the Xiaomi Redmi Note 4 was the highest selling smartphone in India, ever. Jain shared that the company had sold roughly 3 million units of the Redmi Note 3 in one year, based on which the company decided to import 5 million units of the Redmi Note 4 over a period of 6 months, but despite the larger inventory, the smartphones keep selling out. He goes on to share that the company has seen a 10x growth in offline sales in the last 6 months.

According to the latest IDC report, Xiaomi controls 46.9 percent of the online market share of smartphone sales, a number larger than the market share of the next four companies combined. Couple that up with the fact that the rate of growth of offline revenue has been faster than that of the online revenue for the company, only means that Xiaomi is in the right position to take over a huge chunk of the offline smartphone retail, just like they did with online.

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