comscore Xiaomi targets 50% of its total sales in India to come from offline market: CEO Lei Jun

Xiaomi targets 50% of its total sales in India to come from offline market: CEO Lei Jun

Xiaomi CEO and founder hints at setting up a third manufacturing plant in India.


After an indisputable success in the online market in India, Xiaomi aims to take its offline presence much higher. According to analyst firm IDC, Xiaomi India has become the number one selling smartphone brand in the online market, with about 29.3 percent share. Xiaomi CEO Lei Jun, however, wants to not only bring up its online sales in the country, but also to increase offline market-share to 50 percent as well. Also Read - Xiaomi 12 could become first smartphone to launch with Snapdragon 8 Gen 1 chipset

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If we look at overall market, online is a small piece. Our business model is all about efficiency so it s rather depended [sic] on how many people adopt the internet. In China after we have achieved such scale, the challenge is how we can achieve the same in offline with efficiency. In India, after we achieve more than 50 percent market-share in online space, the question is how to do the same in offline, Jun told ET in an interview. Also Read - Would you buy a Xiaomi electric vehicle? Company plans to produce lakhs of cars every year

However, the cost of offline retail is much higher than what adds up in online sales. And so, Xiaomi plans to use own Mi Home stores that house its products, which it is trying to bring to India. Additionally, talking about the challenge faced in particular when expanding their offline presence in a country, Jun points out that the increasing offline market share is dependant on adopting the internet and retail based efficiency model, which are used online, and are similarly used for the offline market as well. ALSO READ: Xiaomi to ramp up offline presence in India: Manu Kumar Jain

Futher, Jun also recognizes the challenges that come in the way of putting the plan in action, and he highlights supply and manufacturing being the primary issues. Xiaomi India journey has been way beyond our wildest expectations and dreams. According to IDC we are number one in online. In last two quarters, out of three phones sold online, one is a Xiaomi phone, Jun said. However, bringing focus to the supply and manufacturing obstacle, he added, Our biggest challenge has been supply and manufacturing. In our latest Redmi 4A sale, we sold 250,000 phones in just 4 minutes This also means a lot of users who want to buy our products could not get our products and had a bad experience. ALSO READ: Xiaomi sets up second manufacturing unit in India

Very recently, Xiaomi announced its second manufacturing unit in partnership with Taiwanese electronics major Foxconn in Andhra Pradesh. With the new manufacturing plant also at Sri City, in Andhra Pradesh, it was estimated that more than 95 percent of Xiaomi s smartphones sold in India will be manufactured in the country. And with the second plant, Xiaomi now has a combined production capacity of one phone per second during operational hours.

Nevertheless, Xiaomi CEO says that even a capacity of one phone per second falls short of supply. It s a possibility, we re still running out of stock of India. First fulfil Indian consumer needs before looking at exporting, he further said. Naturally, Jun hinted at expanding manufacturing in India first, which may also be indicative of a third plant in the country. ALSO READ: Xiaomi India to spruce up retail network for rural gains

Further, along with its efforts to push its offline share of sales in India, Xiaomi also plans to spread the agenda to its other international markets as well. Xiaomi CEO and founder Lei Jun says that he wants to see a facsimile of India s success in markets like Indonesia, Russia, Ukraine and Vietnam, before making its way to the US.

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  • Published Date: March 27, 2017 4:38 PM IST
  • Updated Date: March 28, 2017 9:13 AM IST

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