Chinese handset maker Xiaomi is preparing for a bigger offline push by opening over 5,000 small format exclusive stores - Mi Stores - all over the country by the end of 2019, having already opened around 500 stores across 14 states, especially in tier 3 and rural areas.
The move is aimed at driving sales for its products across categories by reaching a new customer base even in rural areas, including remote villages.
With this expansion, the company now expects its offline sales to contribute 50% towards overall sales by the end of 2019, up from around 35-40% in the third quarter, Manu Jain, Vice President, Xiaomi and Managing Director, Xiaomi India said.
"We are now doing 40 times the volume of sales that we were doing at the beginning of this year through the offline channel. Our market share in the offline channel is increased tremendously over the past few quarters," Jain said, adding that the latest round of offline expansion will generate 15,000 new jobs across the country.
Jain said that the new stores will have the leanest distribution possible in the country to cut down on costs and provide the same price as the rest of the stores. "We had been working very hard for the last two months on this project, called offline 2.0."
Xiaomi already has 50 bigger Mi Home stores till now that includes 5 experience stores and will open 50 more stores.
It also has more than 4,000 Mi Preferred stores across 50 cities and is now planning to expand its reach to 100 cites. "We will add another 50 cities going forward by the end of next year. In the 12 cities out of the 50, our market share in the offline market share has gone up to more than 30 percent," he said.
In the 12 cities out of the 50, Xiaomi's offline market share has gone up to more than 30 percent.
The handset maker isn't targetting traditional mobile retailers for the expansion. Jain said any person without having any prior experience in retail business can be a part of Xiaomi's offline business. "We are not against mobile retailers, but are selective in approach and want to go deeper into the market. We are a pull brand," he added.
Xiaomi continued its solid performance in India by selling a total of 8.5 million devices, including 6 million smartphones in India during the 30-day festive period, generating $1 billion in GMV (gross merchandise value). Analysts said that the performance will help the company to further consolidate its market lead in the October-December quarter
The Chinese company regained smartphone market leadership in the July-September quarter after losing the pole position to Samsung in the second quarter of 2018, according to Counterpoint Research.
It had recorded its highest ever shipments in India in a single quarter driven by the new Redmi 6 series, the launch of sub-brand Poco, and expansion in offline channels, leading to 27% market share in Q3, up from 22% in a year earlier period.