Xiaomi now has two factories in India but is still focused on expansion. The Chinese phone maker recorded a revenue of $1 billion in India last year and has set a $15 billion target for overall global revenue for 2017. To achieve that, Xiaomi will have to restructure its sales mechanisms, one of which is focusing on offline sales.
Xiaomi’s founder, Lei Jun has said that the growth response in India, its second largest market, has been overwhelming. But despite the fact that there are two factories already, demand still outweighs supply greatly. To solve that, a third plant is in the picture.
Speaking in an interview with the Economic Times, Lei Jun said an IDC report puts them at number one in online sales. A clearer picture of that statement is that out of every three phones sold online, one is a Xiaomi phone. That number can be higher if supply increases. The company sold 250,000 Redmi 4A phones in four minutes during its last flash sale. That figure pales in comparison to the 1 million recorded pre-booked orders.
Mr. Jun says the plan is to replicate the success in online sales to offline sales. The company’s short term goal is to grab 50% of the online market share (29.3% as at 2016, and over 30% now) then grab 50% of the offline market share.
Xiaomi says it will adopt its efficiency model to keep their phones priced the same as they are online even though offline retail cost is higher. For a country like India with a massive population, there are still a lot of folks who do not use the internet. Meeting the demands of that group will require more investment in the building of more local warehouses and an expansion of service stores.
Xiaomi India MD, Manu Jain says Xiaomi is setting up a third warehouse in Delhi already and has plans to double its service centers from 250 to 500 by the middle of the year. There are also plans to bring
Lei Jun also said that there are plans to bring more products in its ecosystem to India. He is also considering investing in start-ups in India through Shunwei Capital and Xiaomi India.
He also cleared the air on the challenges it faced last year. “In the past few years after hitting some of these obstacles we have intentionally slowed down and we want to build upon a stronger foundation… Even in the toughest years, like last year, we were actually able to achieve some growth”.
At the moment, 95% of Xiaomi phones sold in India are manufactured in the country. The Mi 5 is the only one currently imported. Once demand is met, then plans for exportation will be looked into. On when it will launch in the US, Lei Jun said the plan is to replicate the success in India in countries like Indonesia, Russia, Ukraine, and Vietnam first before going to the States.
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