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Manu Jain, India operations head at Xiaomi, says the company is tying up with Redington (India) for distribution across organized and unorganized channels in the country. Photo: Pradeep Gaur/Mint
Manu Jain, India operations head at Xiaomi, says the company is tying up with Redington (India) for distribution across organized and unorganized channels in the country. Photo: Pradeep Gaur/Mint

Xiaomi to start selling via offline stores in India

The company eyes a bigger share of the world's fastest growing smartphone market through offline sales

New Delhi: Chinese mobile-phone maker Xiaomi Technology India Pvt. Ltd, which has so far focused on online sales, will soon start selling through offline stores in India, as it eyes a bigger share of the world’s fastest growing smartphone market.

The company is tying up with Redington (India) Ltd, one of the largest distributors of cellphones in India, for distribution across organized and unorganized channels in the country, said Manu Jain, India operations head at Xiaomi.

The company will work on a commission-based model. It refused to share further details.

Xiaomi (pronounced Shiao-Me) is expected to work with multiple partners.

“We are experimenting with a new sales channel and getting into general trade to increase our reach and to make our products available more easily," Jain said.

The offline sales will initially be through 1,000-1,500 stores in 15 south Indian cities, including Chennai, Hyderabad, Bengaluru, Mysore and Visakhapatnam.

The rollout will happen in phases and the first phase is expected to go live in the next 45-60 days. It will eventually make its products available across India by early 2016.

Xiaomi is known for offering smartphones at competitive prices by selling directly to consumers via online marketplaces with minimal marketing spending. The company entered India in partnership with India’s largest e-commerce company Flipkart and eventually launched its own online portal Mi.com.

However, the move to sell through brick and mortar stores is expected to hurt the company’s already wafer-thin margins. “The cost of doing offline business is of course higher... the margins will be affected but not much," Jain said, without specifying the company’s current margins.

The company said the move would have no impact on Xiaomi’s pricing in India. “We will not pass on the cost to consumers. We determine our product’s prices by keeping the online sales channel in mind," Jain said.

“We will keep our supply chain lean and efficient to avoid higher costs. We are coming up with processes and technologies that will help us predict demand of smartphones on a weekly and monthly basis in offline stores that we will tie up with," he added.

According to him, Xiaomi has an offline presence in China too. It currently gets 30% of its business in the country from the offline space, he added.

Jain expects offline sales in India to eventually contribute 25-30% of the overall numbers.

Since its launch in July last year, Xiaomi has sold over a million units in India. Globally, it sold over 61 million phones in 2014. Founded by Lei Jun in 2010, the company is one of the world’s most valuable technology start-ups.

Xiaomi, which has been in talks with Taiwanese contract manufacturer Foxconn to make its smartphones in India, is also looking to introduce air purifiers and televisions in India, Mint reported in December.

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