Xiaomi to open 300 retail stores to secure top spot
Smartphone maker Xiaomi Corp on Wednesday debuted its flagship handset and pledged to open 300 retail stores to fight against Huawei Technologies Co Ltd, which is threatening its leading position in China.
Lei Jun, CEO and co-founder of the Beijingbased Xiaomi, said the new device and offline sales plan will let the challengers know who is the boss on the market.
“We are sorry other vendors were left disappointed,” Lei said on Wednesday at the launch. He was obviously mocking Huawei’s 2015 plan to get on top of Xiaomi in Chinese market by the year-end. Xiaomi ended up shipping 2 million devices more than Huawei did last year, according to research firm International Data Corp.
“We are rolling out more top-tier products to secure the No 1 place,” said Lei.
The company will relay on the new Mi 5 handset to achieve the target. The 5-inchscreen handset comes with a 16-megapixel back camera, a fingerprint sensor, a ceramic back, a powerful processor and a 128-gigabyte storage.
The retail prices were set between 1,999 yuan ($306) to 2,699 yuan depending on the configurations. In comparison, Huawei’s slightly bigger flagshipMate 8 is selling from 3,199 yuan. The storage and processing power are similar toMi 5’s cheapest option.
TheMi 5 will be available on theChinese mainland starting from March 1, followed by India, according to Xiaomi. However, the product will not enter theUnited Statesmarket although the 5-year-old Xiaomi launched an online store in the US selling power banks and mobile accessories.
The delayed US release was largelydueto lack of necessary patents. Lei said at Wednesday’s event the company is growing its patent pool and has applied about 3,600 patents over the past years.
China, the world’s biggest smartphone market, will remain the top priority for Xiaomi in the coming years however. Lei said thecompany will open 200 to 300 retail stores in Chinese cities to boost sales.
Nicole Peng, director of consultancy Canalys China, said going offline was a huge strategic change for Xiaomi as the company aims to grow sales as the market goes weak.
Most of the Xiaomi devices were sold online currently. Internet-only sales model helped Xiaomi keep down its operational cost. The decision was made as demand for smartphones in the country stopped to grow because of high penetration rate.
A number of vendors are also mulling over more stores in smaller cities for bigger sales.
Apple Inc is heavily dependent on Chinese market and the company eyes to have around 40 bricks-andmortar stores in the country. The newoutlets mainly target buyers in smaller cities such as Qingdao in Shandong province.
Tay Xiaohan, an analyst from IDC, said the market has changed significantly as telecom carriers are reducing smartphone subsidy.
“Xiaomi entered the market at a time when the China smartphone market was still growing, and was able to capture a significant market share with its disruptive sales model,” Tay said.