Xiaomi

Xiaomi, one of the leading smartphone company which is based in China, has now started targeting the offline market to get lucrative market share. As per the reports, the company has applied for license to set-up and operate brand retail stores in India.

During the launch of the company’s latest smartphone in the Indian market — Redmi Note 4, Xiaomi’s country manager and India head Manu Kumar Jain had said that they have applied for the license in March or April last year. The company has then applied for the single brand retail license under the category of Cutting Edge Technology.

He has confirmed that the application has been approved by the Department Of Industrial Policy & Promotion (DIPP). While it has been approved by DIPP, it is yet to get the final nod from the Finance Ministry and other offices involved in the approval process. He said,

Our application is pending with the government. What we understand is that it has been approved by Department of Industrial Policy and Promotion, but finance ministry and others still have to clear it.

We are supplying all necessary documents to the government. We are hopeful that we will get it some time soon, not 100% sure of the timeframe, but hope to get it soon. We have told the government that majority of phones being sold in Indian market are being manufactured here, it is meeting the 30 per cent local sourcing norm for the licence.

The single-brand store will be part of the company’s marketing strategy to increase offline foothold, even as it enjoys close to 30% market share online. The company is selling over 90% of its mobile phones in the country.

Manu Jain said that to retain its cost effectiveness in offline sales, Xiaomi will be adopting the Direct to Retail model to cut down on layers of wholesalers. The company will start with 4-5 cities in the next few months, and plans to reach Ahmedabad in next 5-6 months. He added that the “aim will be to get 25-30% share offline by the end of this year.”

The company is selling around 2.5 to 3 million units of mobile phones every quarter, 75% of which is being made in India. India had in January 2012 relaxed its FDI norm for single branded retails and allowed 100% FDI in single-brand retail, with condition that 30% of value of goods are sourced from India.

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