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Xiaomi’s adopting a unique way to approach offline retail in India
Xiaomi entered the Indian market in July 2014 and since then the company has received phenomenal response from Indian consumers. Rather Xiaomi has now become a household name in the country within a span of just a year and that too by their prowess in the online market.
Now the company is betting big on offline retails, and guess what they tied up with large scale offline distributor, which is in fact the offline partner of Apple!
This isn't the first attempt by the company to enter the offline retail though. They started off the offline retail drive with a tie up with Airtel stores where the company showcased their 4G enabled devices namely the Redmi Note 4G and the Mi4.
The world third largest mobile OEM followed it up with a tie up with the Mobile Store and the deal with Redington is the latest addition to the list. But that's old news!
How is the Xiaomi approaching their offline retail drive in collaboration with Redington?
However Xiaomi India Head, Manu Jain gave a few info on how the Chinese tech company plans to enter the retail market. Unlike what Apple does with Redington, where the devices are available for sale only via authorized Redington stores, Xiaomi aims to do something different.
In the offline retail market, Redington will basically play the role of a middle man, where the inventories will lie with Xiaomi itself and Redington will source products from the company time to time. Thereafter they will supply the products to all those brick and mortar stores across India. Yes, Xiaomi will be holding all the cards close to themselves in the offline retail too.
According to Manu Jain, the main problem in offline retail is piling of stocks, where the tertiary retailers suffer from the pressure of clearing the inventory from regional distributor who again is under a close watch of the main distributor. All these piled up stocks eventually mark up the device price. But as we already know Xiaomi sells their products at wafer thin profit margins. Then how does Xiaomi plan to cover this offline retail issue?
Are they up to something unique?
Manu Jain was prompt to reason out that Xiaomi being a tech company is bound to have software solution for this problem. The company is working on some sort of software where the company officials, Redington and local brick and mortar shop owners can check out the inventory flow.
For example, if there is demand for 12 Mi4, 3 Redmi 2 device at a shop in Kolkata, the show owners can place an order for the device on the server and receive it next day. Xiaomi will be launching a pilot offline project soon, via this innovative method which will help the company assess demand in specific brick and mortar stores across in India. Eventually the company aims to disburse a limited no of device to specific brick and mortar stores (thanks to the data collected by the pilot project) via Redington.
Further at the Mi Press Event in Kolkata today, Xiaomi announced their plan of opening there first exclusive service centre (ESC) in the city this weekend. The company presently has 10 ESC in the country with 70 partner run partner run Service Centre. Additionally Xiaomi will be start selling their Mi devices through a total of 35 retail stores in the City of Joy, in the first round of the offline pilot project.
Manu Jain, further laid impetus to the company's PickMi, home pickup and drop service for Mi devices. Presently the PickMi facility is available only in Kolkata, Delhi and Mumbai, but Xiaomi aims to expand this facility Pan India very soon - probably by the end of this year!