China’s Xiaomi bets more on Indian retail stores amid rivalry with Samsung

NEW DELHI, July 16 (Reuters) – China’s Xiaomi (1810.HK) will focus on boosting its sales in India from retail outlets after years of big bets on e-commerce, its India president said, as the company looks to revive smartphone sales after falling behind South Korea’s Samsung. South. (005930.KS).

Ecommerce sales in India through Amazon (AMZN.O) and those of Walmart (WMT.N) Flipkart has risen in recent years, helping Xiaomi and others expand into one of the world’s fastest growing markets, with 600 million smartphone users.

But while 44% of India’s smartphone sales are now online, the physical store segment remains the most important and Xiaomi expects it to grow further.

“Our offline market position is substantially lower than online,” Xiaomi’s head of India, Muralikrishnan B., said in an interview on Friday. “Offline is where you have other competitors that have been doing pretty well and have a bigger market share.”

Just 34% of Xiaomi’s unit sales in India this year came from retail stores, with the rest via websites that have long been its main sales generator, data from Counterpoint Research, based in India, shows. in Hongkong. Samsung, by 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 providers to offer other products, such as Xiaomi TVs or security cameras, where Muralikrishnan said competition is less intense.

It said Xiaomi found some partner stores that put its bright orange branding outside of stores and displayed rival brands more prominently inside, a marketing issue the company would address.

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

“Offline remains a key platform as India embraces the premiumization trend,” said Tarun Pathak, an analyst at Counterpoint. “Consumers who spend more would like to have the appearance of a premium product.”

Xiaomi plans to hire more store promoters: salespeople who attract, promote, and sell phones to potential buyers inside the outlets. His goal is to triple the count to 12,000 promoters by the end of next year from early 2023 levels, Muralikrishnan said.

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

“We will remain confident… that our position will eventually be heard and validated,” Muralikrishnan said.

Reporting by Aditya Kalra; Additional reporting by Munsif Vengattil; Edited by William Mallard

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