Chinese smartphone giant Xiaomi is undergoing a strategic shift in India, prioritizing offline sales through retail outlets to rejuvenate its smartphone business and better compete with its rival Samsung. Xiaomi India’s president revealed that this change in approach aims to tap into the dominant offline retail market and bolster sales, in addition to leveraging the less competitive landscape in other product categories.
While e-commerce platforms like Amazon and Flipkart have facilitated substantial growth in online smartphone sales in India, offline retail remains the primary channel for smartphone purchases in the country. With an estimated 600 million smartphone users, India presents one of the fastest-growing smartphone markets in the world. As of now, India happens to be the second-largest smartphone market in the world after China
Xiaomi which is ranked as the third-largest smartphone vendor globally in the first quarter by research firm IDC, has previously focused on building a strong online presence. However, the company now plans to expand its physical retail network, without specifying the number of stores or the timeline for the rollout. Xiaomi intends to collaborate with domestic vendors to sell its wide range of products, including televisions and security cameras, capitalizing on the relatively less intense competition in these areas.
Presently, Xiaomi operates 18,000 stores in India. The company aims to increase its offline footprint further to harness the untapped potential of the retail sector. Xiaomi’s India head, Muralikrishnan B., acknowledged the company’s relatively lower market position in the offline segment, recognizing competitors’ successful strategies and their larger market share. To address this, Xiaomi plans to enhance its marketing efforts and tackle the issue of rival brands being prominently displayed alongside Xiaomi products in stores.
According to recent data from Counterpoint Research, Xiaomi has slipped behind Samsung in terms of market share in India, with Samsung currently holding a 20 percent share compared to Xiaomi’s 16 percent. To bolster its offline presence, Xiaomi intends to hire more store promoters who can engage with customers and promote Xiaomi smartphones within retail outlets. The company aims to triple the number of promoters to 12,000 by the end of the following year, surpassing the early 2023 levels.
By shifting its focus towards offline sales and expanding its retail network, Xiaomi aims to revitalize its smartphone business in India and narrow the gap with Samsung. Recognizing the significance of physical stores in the Indian market, Xiaomi aims to capture consumer attention through brick-and-mortar channels, thereby strengthening its competitive position.