Xiaomi teams up with China Uni­com to push off­line phone sales

China Daily (Canada) - - LIFE - By MASI masi@chi­nadaily.com.cn

Chi­nese smart­phone ven­dor Xiaomi Corp has teamed up with the coun­try’s sec­ond­largest tele­com car­rier, China United Net­work Com­mu­ni­ca­tions Group Co, to ex­pand its off­line re­tail­ing chan­nels.

The move came as the coun­try’s on­line smart­phone sales has hit a ceil­ing and as Xiaomi grap­ples with de­clin­ing ship­ments and mount­ing com­pe­ti­tion from ri­vals such as Oppo Elec­tron­ics Corp.

Xiaomi launched a cus­tom­made smart­phone Redmi 3X on Wed­nes­day. Equipped with a large bat­tery and a 13-megapixel rear-cam­era, the new phone will go on sale for 899 yuan ($136) through China Uni­com’s 30,000 off­line stores and more than 230,000 bricks-and-mor­tar re­tail­ing part­ners.

Lei Jun, CEO and founder of Xiaomi, said so far more than two-thirds of the com­pany’s smart­phones have been sold through e-com­merce plat­forms and the com­pany’s of­fi­cial web­site.

“The pro­por­tion of on­line sales is too big,” Lei said. “To main­tain the rapid growth we have seen in the past four years, ex­pand­ing off­line re­tail­ing chan­nels be­comes the key.”

Xiaomi and China Uni­com will also ex­pand their co­op­er­a­tion be­yond hand­sets to a wide range of prod­ucts, such as Xiaomi TV, routers and air pu­ri­fiers.

“Allofthe­seXiaomi­elec­tronic prod­ucts will be avail­able at our na­tion­wide off­line re­tail stores,” said Xiong Yu, deputy gen­eral man­ager atChi­naUni­com.

The move fits into China Uni­com’s broad ef­forts to trans­form its abun­dant bricks-and-mor­tar as­sets into a big re­tail­ing plat­form of var­i­ous elec­tronic prod­ucts, Xiong added.

As China’s smart­phone mar­ket is reach­ing sat­u­ra­tion point, a num­ber of ven­dors are bank­ing on bricks-and-mor­tar re­tail­ers to spur their growth.

Xiaomi said ear­lier this year it will open 200 to 300 re­tail stores to bol­ster sales. Its ma­jor ri­val Len­ovo Group Ltd also pledged more ef­forts to ex­pand its off­line re­tail­ing pres­ence, which its se­nior Vice-Pres­i­dent Chen Xudong called the key to sur­viv­ing in­tense com­pe­ti­tion.

CK Lu, prin­ci­pal an­a­lyst at con­sult­ing firm Gart­ner Inc, saidChi­naUni­com’s sprawl­ing off­line re­sources gaveXiaomi a ticket to en­ter into low-tier cities, which are dom­i­nated by its ri­vals Oppo Elec­tron­ics Corp and vivo Mo­bile Com­mu­ni­ca­tion Tech­nol­ogy Co Ltd.

In the first quar­ter of this year, Op­poand­vivo­made­their way into the world’s top-five rank­ing of smart­phone ven­dors for the first time, push­ing out Xiaomi and Len­ovo.

“Xiaomi is an ex­pert in on­line mar­ket­ing, but lacks ex­pe­ri­ence and tal­ent to run off­line stores. So it makes tons of sense to part­ner with China Uni­com,” Lu said.

Ac­cord­ing to Coun­ter­point Tech­nol­ogy Mar­ket Re­search, tele­com op­er­a­tors’ re­tail chan­nels ac­count for 30 per­cent of China’s to­tal smart­phone sales, while e-com­merce sites con­trib­ute an­other 30 per­cent, with the rest man­aged by pro­fes­sional elec­tronic re­tail stores.

James Yan, a Bei­jing-based an­a­lyst at Coun­ter­point, said part­ner­ing with China Uni­com will help Xiaomi quickly boost smart­phone sales, but won’t nec­es­sar­ily de­liver good prof­its.

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