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Read more about Xiaomi seeks to expand beyond smartphones in India: Manu Kumar Jain on Business Standard. Xiaomi launched flagship experience store in India, Chennai making products which are sold in China and available in India for customers. Xiaomi India detailed about companies retail strategy in India.
in India: Manu Kuman Jain
Xiaomi India has launched its first flagship experience store in India, offering
products sold in China but hitherto not available in India. The products this store
in Chennai will offer include an electric cycle, a self-balancing scooter and an
electric folding bike. The company plans to use feedback from customers on these
products to understand the level of customisation required before launching
some of them in India. In an interaction with Gireesh Babu, Xiaomi India's MD
Manu Kumar Jain dwells on the company's retail strategy in India. Edited Excerpts:
What is the idea behind displaying products that you haven't yet launched in
India? When Xiaomi started almost eight years ago, the aim was to build an
internet company. We have several internet products -- what we call ecosystem
products. There are 40-50 such categories in China, such as smart shoes, smart
cycles, smart scooters, smart air purifiers, smart water purifiers, and smart
routers. Our aim is to make everything smart, internet-enabled and eventually
run by a smartphone.
We started in India with smartphones, and have around eight to ten categories
today. In smartphones, fitness band and power banks we are number one in
India. In air purifiers and routers we are number one in online alone. Now we
want to launch many more categories in India. We decided to display 15-20
categories in our flagship stores here. These are not for sale, but for experiencing
and giving us feedback, for customisation in India. This will help us launch many
more such categories here over the next two or three years. This is our way of
collecting live feedback from people.
In India, Mi is seen as a smartphone company. How are you planning to expand
We certaily want to be known more than just a smartphone brand. We have been
here for only three-and-a-half years, having started in July 2014. Within this
period we have already launched 8-10 different categories. Let us build specific
product teams, logistics teams, warehouse teams, aftersales service teams in
India. We will eventually launch many of these products in India. Give us a few
years. Let us stabilise our TV business and continue to grow our existing
businesses. Eventually, we would want to enter more categories.
How would your retail system evolve to include other products? What is the
offline sales strategy?
We are an online company and will continue to focus on online. But we also want
to build offline. Our market share in offline used to be less than 0.5 per cent, but
in nine months -- from March-April 2017, to the fourth quarter ending December -
- this had grown to 11 per cent. We grew almost 20-30 times in offline. We
already have 2,500-Mi preffered partners in 25 big cities in India. Mi preferred
partners now are smartphone specific sellers, who might not have the capacity to
store or sell the bigger products like Mi TV or the smart scooter or smart cycle. Do
we want to develop offline market for all these categories we launch in next few
years? Yes, Of course.
Would we use the same channel? We don't know. We need to evaluate this. If
some of these shops are big enough and want to sell the entire portfolio, may be
yes. But if the shops are small and can only cater products like smartphone, we
may need to build a separate channel. It depends upon the product category. We
will have to take a very informed choice for the channel selection.
What about aftersales services?
We have been working on launching the TV for three years, and our service
network for TV is already there in close to 200 cities. We have around 750 service
centres for phones across the country. In January 2017, we had 250 centres.
When we launch many more product categories, we will have to accordingly build
service networks for each of them.
Do think the experience stores will bring down the time to launch?
Of course. We are talking about the importance of the Indian market. We would
want to compress the period taken for launch, and may be few years down the
line we will have simultaneous launches between China and India. There might
also come a day when we launch products first in India and also design and
develop products exclusively for India. Eventually we want to manufacture
everything in India. But we need certain volumes to start manufacturing and you
have to do a return-on-Investment analysis. If that is favourable, we would want
to set up local factories for everything here. We would love to consider TV
manufacturing in India, but it is a complicated process requiring heavy
investments and we need to understand what the volumes would look like before
taking a decision.
Would you bring the television to the retail stores?
Eventually, yes. We are still evaluating what is the best way to do it, since many of
our current channels are not the best way to do it. We are selling through the Mi
Homes. We have to re-evaluate our offline strategy for TV, but the aim is
definitely to sell offline.
How much have you invested in India? What would you invest in the future?
The short answer is: a lot. By 2015-end we were selling, as per IDC numbers,
almost a million a quarter and by 2016-end we were doing three million in a
quarter and in 2017 we were doing nine million a quarter. In two years we have
grown nine to 10 times, which means we have set up more capacity requiring
investment. As far as Mi Home is concerned, we started with one in the middle of
last year and now we are opening the 25th Mi Home in 11 top cities in India. We
may open flagship experience centres in Mumbai, Delhi and other metro cities.
Tripling the number of service centres in a year would have required a lot of
investments. Instead of two warehouses, we have expanded to five big
warehouses and 26 smaller ones. We used to have one call centre, now we have
three. The total headcount is around 400 people in India now, one year back it
was 150. Everything is growing exponentially for us. All of these things require
investment. I don't know and can't share the number.
Article By - Business Standard