Xiaomi Going Back to Traditional Retail Route to Reclaim its Position

Published Date : Jul 05, 2017

With its online flash-sales model, Xiaomi had emerged as the most valuable startup in Asia over the last few years. Although the model has lifted the company to dizzying heights, it is falling on hard times as of now, owing to which, it is going back to the old-fashioned retail route in order to make a comeback. This, however, is proving to be a much severe challenge for the company.

The smartphone maker is undergoing a huge transformation after the missed targets impelled a bout of introspection and consideration by Lei Jun, its billionaire co-founder. From Harbin in the Northeast to Shanghai in the East, the company aims at building one thousand ‘Mi Homes’ by the end of 2019 – nearly double the global store count of Apple – with which, it expect to generate around 70 bn yuan (US$10 bn) in sales by the end of 2021.

Need to Set High-class Tone Impelling Xiaomi to Build Signature Outlets

Xiaomi has no experience of running physical stores. However, it wants to set up a high-class tone for its brand by constructing its own signature outlets. While rivals, such as Huawei, Oppo, and Vivo have attained prime locations by partnering with thousands of resellers, Xiaomi is taking on rise in rentals and the labor costs.

“The reason behind the Chinese brands constructing these experience stores is that they want to boost their brands so that they appeal to upmarket consumers,” stated Jin Di, Research Manager, IDC China. “It suits the long-term strategy of Xiaomi, although they have just crossed the preliminary line,” he added further.