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Xiaomi expands offline distribution


Xiaomi’s branded smartphones in India will now be distributed across 5000 offline outlets including Sangeetha, Big C, LOT Mobiles, Poorvika, among others. The Chinese company’s official store in India ‘Mi India’ has tied up with offline distributors including Just Buy Live and Foxconn owned Innocomm for the new offline expansion, Xiaomi said in a statement.

All Xiaomi branded smartphones including Redmi 2, Redmi 2 Prime, Redmi Note Prime, Redmi Note 3, Mi 5 will be available in major Tier 2 cities with the offline expansion. While its latest model Mi Max will be available in stores from 13 July onwards. The prices of all devices will be similar to the online pricing.

Just Buy Live is an online distributor that allows retailers, shopkeepers and corporates to purchase directly from its platform through an e-commerce model. On the other hand, Innocomm operates entirely on a direct-to-retail model for distribution. Both distributors claims to enable selling merchandise directly to retailers via a single distributor, cutting several layers of distributors in between.

Xiaomi has been increasingly focusing on selling its devices on its own, rather through other ecommerce websites. This likely helps the company’s profit margins, as it sells relatively high end phones for comparatively low prices. The company already sells its goods via mi.com and last year Xiaomi announced that it would invest in setting up own warehouse and logistics as well. It launched the branded online store ‘Mi India’ in March last year and initially listed accessories like mobile cases and headphones, while adding smartphones and other Mi branded products later. Following which the company debuted a beta version of its global Mi store app in India in July 2015.

Xiaomi’s plans of setting up branded stores in India: Last month, the Chinese smartphone maker, which had earlier applied for exemption of local sourcing rules withdrew its request. A company spokesperson told us that it is in “constant discussion with the department for small clarifications, and have not met any major obstacles to date.” However, this is set to change since the government had relaxed FDI rule of mandatory 30% local sourcing last month for opening single brand retail stores for up to three years.

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Market Share: Interestingly, an IDC report claimed that Apple overtook Xiaomi in terms of unit shipments during Q4 FY15. Apple had a market share of 4.6% during the quarter, while Xiaomi managed to capture a 3.5% share. But the scenario is changing: IDC pointed out that key Chinese vendors like Xiaomi, and others gained traction during Q1 FY16  with new product launches, aggressive marketing spends and expanding their channel presence in both offline and online.

Image Credits: Flickr user Jon Russell under CC BY-SA 2.0

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