Xiaomi to Team Up with Telecom Carrier to Expand Offline Retailing Channel
Xiaomi Corp. one of China’s smartphone vendors is teaming up with the second largest telecom carrier China United Network Communications Group in hopes to expand their offline retailing channels. The move came as the country’s online smartphone sales hit a ceiling and Xiaomi is struggling with a decline in shipments and mounting competition for rivals such as Oppo Electronics. According to Lei Jun Xiaomi’s CEO and founder that two thirds of the company’s smartphones are sold through e-commerce platforms and Xiaomi’s official website.
Last Wednesday, Xiaomi released a customs made smartphone Redmi 3X that is equipped with a large battery and a 13-megapixel rear camera. The new phone will be on sale for 899 yuan and available through China Unicom’s 30,000 offline stores and at 230,000 brick and mortar retailing partners. Proportions of online sales is too large and to maintain the rapid growth, expanding offline retailing channels seems to be the key. Cooperation with Xiaomi and China Unicom will not only be on smartphones but will be expanded to a wide range of products such as routers, air purifiers and Xiaomi TV.
All Xiaomi electronic products are available in all nationwide offline retail stores, and according to Xiong Yu the deputy general manager at China Unicom that the move fits to China Unicom broad efforts in transforming their abundant brick and mortar assets into a retailing platform of various electronic products. China’s smartphone market is about to reach its saturation point and a number of sellers are banking on brick and mortar retailers to boost their growth.
Xiaomi stated that earlier this year the company will be opening 200 to 300 retail stores to help boost sales. Its closest rival Lenovo Group, has already pledged to expand its offline retailing presence which is the key to survive an intense competition. China Unicom’s offline resources will give Xiaomi a ticket in entering into low tier cities that are dominated by Oppo Electronics and Vivo Mobile Communication Technology. For the first quarter of 2016, Oppo and vivo made their way in the world’s top five ranking of smartphone vendors for the first time replacing Xiaomi and Lenovo. Although Xiaomi is an expert in online marketing, the company lacks in the talent and experience area in running offline retail stores, so by partnering with China Unicom makes a lot of sense.