Xiaomi to open 300 retail stores to se­cure top spot

China Daily (Canada) - - LIFE - By GAO YUAN

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.


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