Xiaomi Plans to Open Hundreds of Retail Stores to Increase Sales
Xiaomi plans to open up 200 to 300 retail stores in order to increase sales.
The Chinese smartphone startup Xiaomi is now valued at $45 billion. However, the company’s revenues went down and became flat in 2015. Lei Jun, founder and CEO of Xiaomi Corp, stated that the company is no longer at the top of the pillar when it comes to valuation of tech startups, and their smartphone sales seem to have been slightly sluggish during the last quarter.
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American research firm International Data Corporation (IDC) said that the first quarter of 2015 for Xiaomi was a bad start, sliding down 26 percent in sales. IDC also said that its ecosystem companies will have a difficult time expanding outside their home country.
Xiaomi’s solution for dwindling down sales is to open retail stores by hundreds, with the goal of opening 50 to 60 stores by the end of this year.
“That is why we are expanding our portfolio of products from smartphones to drones, air purifiers, patch panels to rice cookers. We need about 40 electronic products to attract consumers to both our online shopping platform and offline retailing stores,” Lei said, adding that the company has invested in 55 smart-hardware manufacturers in recent years.
The company's new plan is targeted at smaller Chinese cities, where the shoppers still choose physical stores over online retailers. Xiaomi has already partnered with Chinese Best Buy equivalent Suning to distribute its smartphones.
In addition, Xiaomi operates 25 offline outlets across the country, which are fondly referred as Mi homes. These outlets showcase Xiaomi’s ecosystem of products. Lei said that the company aims to transform the outlets into full-fledged retail stores, broadening its appeal to older Chinese customers and families.