China’s Xiaomi will concentrate on boosting its India gross sales from stores after years of huge bets on e-commerce, its India president mentioned, as the corporate seeks to revive smartphone gross sales after falling behind South Korea’s Samsung.

E-commerce gross sales in India through Amazon and Walmart‘s Flipkart have surged in recent times, serving to Xiaomi and others develop in one of many world’s fastest-growing markets, with 600 million smartphone customers.

But whereas 44 % of India’s smartphones gross sales at the moment are on-line, the brick-and-mortar phase stays the larger play and Xiaomi expects it to develop additional.

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

Just 34 % of Xiaomi’s India unit gross sales this yr have come from retail shops, with the remaining via web sites which have lengthy been its dominant gross sales generator, information from Hong Kong-based Counterpoint Research exhibits. Samsung, in distinction, will get 57 % of its gross sales from shops.

Xiaomi plans to develop its retailer community past the present 18,000 and more and more accomplice with telephone distributors to supply different merchandise, reminiscent of Xiaomi TVs or safety cameras, the place Muralikrishnan mentioned competitors is much less intense.

He mentioned Xiaomi discovered some accomplice shops that put its vivid orange branding outdoors retailers have been displaying rival manufacturers extra prominently inside, a advertising and marketing problem the corporate would deal with.

Xiaomi’s offline push comes months after it misplaced its management place to Samsung, which had a a lot greater portfolio of premium telephones now in vogue. The South Korean large has a 20 % market share in India, whereas Xiaomi, which traditionally focussed on price range telephones, has 16 %.

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

Xiaomi plans to rent extra retailer promoters — salespeople who lure, pitch and promote telephones to potential consumers inside retailers. It targets tripling the depend to 12,000 promoters by the tip of subsequent yr from early 2023 ranges, Muralikrishnan mentioned.

Another important India problem for Xiaomi is a federal company’s $673 million (almost Rs. 5,500 crore) freeze on its financial institution property since final yr. The company alleges Xiaomi made unlawful remittances to international entities within the title of royalties. The firm denies wrongdoing.

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

© Thomson Reuters 2023