Telecom

Xiaomi to Switch India Strategy in Bid to Rival Samsung

 

Phone-maker Xiaomi is planning to switch from its years-long strategy of betting on e-commerce in India and focus boosting sales from offline stores, its India president said.

The move comes as the Chinese telecom giant has fallen behind South Korea’s Samsung in the country, where brick-and-mortar remain the bigger players in smartphone sales.

“Our market position in offline is substantially lower than what it is online,” Xiaomi’s India head, Muralikrishnan B, said in an interview on Friday. “Offline is where you have other competitors who have been executing fairly well and have a larger market share.”

 

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E-commerce sales in India via Amazon and Walmart’s Flipkart have surged in recent years, helping Xiaomi and others expand in one of the world’s fastest-growing markets, with 600 million smartphone users.

Just 34% of Xiaomi’s India unit sales this year have come from retail stores, with the rest through websites that have long been its dominant sales generator, data from Hong Kong-based Counterpoint Research shows.

Samsung, in contrast, gets 57% of its sales from stores.

Xiaomi plans to expand its store network beyond the current 18,000 and increasingly partner with phone vendors to offer other products, such as Xiaomi TVs or security cameras, where Muralikrishnan said competition is less intense.

He said Xiaomi found some partner stores that put its bright orange branding outside shops were displaying rival brands more prominently inside, a marketing issue the company would address.

 

India goes premium

Xiaomi’s offline push comes months after it lost its leadership position to Samsung, which had a much bigger portfolio of premium phones now in vogue. The South Korean giant has a 20% market share in India, while Xiaomi, which historically focussed on budget phones, has 16%.

“Offline remains a key platform as India embraces the premiumisation trend,” said Counterpoint analyst Tarun Pathak. “Consumers spending more would like to have the look and feel of the premium product.”

Xiaomi plans to hire more store promoters – salespeople who lure, pitch and sell phones to prospective buyers inside outlets. It targets tripling the count to 12,000 promoters by the end of next year from early 2023 levels, Muralikrishnan said.

Another significant India challenge for Xiaomi is a federal agency’s $673 million freeze on its bank assets since last year. The agency alleges Xiaomi made illegal remittances to foreign entities in the name of royalties. The company denies wrongdoing.

“We’ll continue to be confident … that ultimately our position will be heard and validated,” Muralikrishnan said.

 

  • Reuters, with additional editing by Vishakha Saxena

 

Also read:

China’s Xiaomi to Protect Interests After Assets Freeze in India

India Probes China’s Xiaomi Over Foreign Exchange Laws

Indian Investigators Deny Threatening to Hurt Xiaomi Executives

Chinese Smartphone Maker Vivo’s India Office Raided

Chinese Telecom Vivo Hid Evidence, Not Cooperating, Says India

India Turns up Heat on Huawei Over Tax Evasion – ET

 

Vishakha Saxena

Vishakha Saxena is the Multimedia and Social Media Editor at Asia Financial. She has worked as a digital journalist since 2013, and is an experienced writer and multimedia producer. As a trader and investor, she is keenly interested in new economy, emerging markets and the intersections of finance and society. You can write to her at vishakha.saxena@asiafinancial.com

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