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With Samsung Competing, China's Xiaomi Increases Its Wagers On Indian Retail Shops

With Samsung Competing, China's Xiaomi Increases Its Wagers On Indian Retail Shops
China's Xiaomi, which has lagged behind South Korea's Samsung in smartphone sales, will concentrate on growing its retail sales in India after years of significant investments on e-commerce, according to the country's president.
With 600 million smartphone users, India is one of the fastest-growing marketplaces in the world. In recent years, e-commerce sales through Amazon and Walmart's Flipkart have soared in India, assisting Xiaomi and other companies in growing there.
Although 44% of Indian smartphone sales now take place online, Xiaomi still sees brick-and-mortar sales as having a larger market share and anticipates additional growth in this area.
"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."
According to data from Hong Kong-based Counterpoint Research, only 34% of Xiaomi's India unit sales this year came from retail outlets, with the remainder coming from the websites that have traditionally been the company's main source of sales. In comparison, retailers account for 57% of Samsung's revenues.
Beyond the current 18,000 locations, Xiaomi intends to increase its retail network and partner more frequently with phone manufacturers to provide additional items, such Xiaomi TVs or security cameras, where Muralikrishnan claimed there is less fierce competition.
According to him, Xiaomi discovered that some of its partner retailers that prominently displayed its bright orange branding outside of stores were doing the same inside, which is a marketing issue the business will solve.
Xiaomi is making an offline effort now, months after losing the top spot to Samsung, which had a larger selection of the high-end smartphones that are currently in style. In India, the South Korean juggernaut holds a 20% market share, while Xiaomi, which has typically specialised in low-cost phones, holds a 16% share.
"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."
The salesmen that entice, pitch, and sell phones to potential customers inside stores are known as store promoters, and Xiaomi aims to hire more of them. According to Muralikrishnan, it aims to triple the number of promoters from early 2023 levels to 12,000 by the end of the following year.
The $673 million in bank assets that have been frozen by a federal body since last year represent another huge barrier for Xiaomi in India. According to the agency, Xiaomi sent unauthorised payments to foreign organisations under the pretence of royalties. The business disputes any wrongdoing.
"We'll continue to be confident ... that ultimately our position will be heard and validated," Muralikrishnan said.

Christopher J. Mitchell

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