Xiaomi to set up fully-owned Mi Home stores in India
Following the relaxation in FDI norm, Xiaomi now wants to open its fully-owned Mi Home stores in India to increase its foothold in the offline business. Thanks to automatic approval from the Government Xiaomi will quickly set off in this direction without having to waste time in seeking unnecessary prior approvals.
Xiaomi has seen a phenomenal rise in the Indian smartphone market in 2017 and in the last quarter, it emerged India's top-selling smartphone brand dethroning the long-reigning Samsung.
The stupendous success, it achieved in India is no doubt because of its impressively spec'd devices with pocket-friendly prices, but most significantly a large part of its success is due to its effective online sales via Mi.com, Flipkart, and Amazon India and later on via various offline channel partners.
As Xiaomi already has a hold over 50 percent of online smartphone sales in India it now wants to deepen its presence in the offline market. To that end, Xiaomi aims to drastically increase the volume of its Mi Homes and Mi preferred stores in India.
Currently, Xiaomi has 23 Mi Home stores and over 1500 Mi preferred stores across various cities in India. But the company lacks the exclusivity in such places as Mi Homes are owned by franchises (managed by Xiaomi), and similarly, Mi preferred stores are multi-brand stores.
Since regulations in India called for only 49 percent foreign direct investment (FDI) in single-brand retail stores, it prevented Xiaomi to fully own its Mi Homes. But now the regulation has been relaxed by the Indian government in January allowing 100 percent FDI in the retail business. So now Xiaomi is all geared to set up its fully-owned Mi Home stores in the country.
According to Manu Jain, the Managing Director of Xiaomi India said, "The company is set to catch in on this latest development by establishing self-owned Mi Home retail stores across major cities and towns in India."
The move will kick off fast as "the year progresses" for the simple fact that company requires no more prior approvals from the government for setting up exclusive Mi Homes and Mi stores.
As per IDC report, Xiaomi last year sold over 2 million units through its offline channels only thanks to the expansion of its Mi Homes and Mi preferred stores. Change in FDI norm will now give Xiaomi more freedom to proliferate its offline presence in India. As the company is expanding its portfolio such as Mi TV in India, a better laid out offline channels in the country will certainly be of great advantage.