Xiaomi to open co-owned stores in India as rules ease

Chinese electronics major Xiaomi will open company-owned stores in India after the government relaxed single-brand retail norms for foreign companies at the beginning of this year.

The company, which is expected to close 2017 with sales of $2 billion on the back of huge traction for its mobile phones, says that it will open the self-owned ‘Mi Home’ stores across major towns and cities to deepen its engagement with the market. “Yes, the relaxation of norms means that we can open our own stores in India. This will happen soon, as the year progresses,” Manu Jain, MD of Xiaomi India, told TOI here.

Speaking further, he said, “It is something that we are evaluating and studying, and it now makes sense as automatic approval has come in. We do not need to go through government approvals before doing so.”

Currently, the company has 23 Mi-Home stores across seven cities, but these are owned by franchisees (and managed by the company). Also, it is present through more than 1,500 Mi-preferred stores in over 16 cities, though these are multi-brand stores.

The company is now expanding its portfolio in the country, and on Wednesday launched its televisions which will initially be retailed online. A 55-inch LED TV of the company will cost Rs 39,999, and Jain said that the company may assemble/source the TVs locally as the business grows.

In the second week of January this year, the government had relaxed single brand retail norms, allowing foreign players to set up own shops without government approval for investments. The decision had allowed 100% FDI in single-brand retail under automatic route (against 49% earlier), while also easing local sourcing norms.
Xiaomi had earlier made an application for opening self-owned stores in the country, but this had faced hurdles after the government had sought clarifications from the company.

Company officials said that with plans to be present across multiple-product categories, having self-owned stores will be critical. “The current franchisee-owned Mi-Home stores have a size of around 1100-1800 sq ft. The self-owned stores will be bigger,” an official said.

Jain did not identify the investments towards the initiative. “The stores will be bigger, as we will accommodate future products as well.”

The company has been riding high on the back of strong sales of phones where it has equaled Korean giant Samsung’s market share in the last quarter (some of the estimates even put the company ahead of Samsung).