Xiaomi Planning To Invest In E-Commerce In India

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Xiaomi took its first tentative steps outside China last year when it entered India with three offerings – the company's then flagship Mi 3, mid-range phablets Redmi Note and Redmi Note 4G and the Redmi 1s. The overwhelming response the company got was beyond anything it could have imagined, and initially, the company was unable to meet demand for months on end. In China, the company sells its phones strictly from its own website, which helps them avoid the retail markup. However, it wasn't able to follow the same strategy in India, and had to enter into agreements with the three largest retailers in the country, Flipkart, Snapdeal and Amazon to sell its myriad phones and accessories, even though it still offers its products for sale through its own website.

Latest reports now claim the Chinese smartphone vendor is looking to set up its own online retail business in the country in earnest. Towards that end, the company is in talks with multiple tech-startups to aid the company's ambitious plans for the future. Mr. Manu Jain, the head of Xiaomi India, said as much to reporters in Hyderabad on Friday. "The investment will go into setting up our own e-commerce business (including the setting up of) warehouse and logistics. We also enable sales though Mi.com, which is our own e-commerce platform. We have not done any marketing for that", he said.

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Mr. Jain however refused to answer questions about the amount of money the company will be setting aside as investment to develop the e-commerce eco-system. He did reveal though, that Xiaomi was already getting "a few thousand" orders daily, and reiterated the company's plans of investing in an R&D facility in Bengaluru and add to its customer care centers. While Mr. Jain also stood by the company's previously stated intent to set up a factory in the country, he clarified that the manufacturing itself would be done by a contractual manufacturer. Rumors say Foxconn, the company's OEM in China and Brazil, will also do the honors in India once the bureaucratic formalities are taken care of by the end of the year.

Xiaomi is said to have sold its first million handsets in India within just four months of entering the country in July 2014. The company ended last year as the fifth largest smartphone vendor across the spectrum with 4 percent share of the Indian market, even without an offline presence. The company was only incorporated in late 2010 by Mr. Lin Bin and Mr. Lei Jun, and has seen exponential growth since its inception. Last year, the company sold over 61 million handsets on its way to becoming the number one smartphone vendor in China. While the company has lost that title to Apple earlier this year, it's still one of the top vendors in the country after reportedly selling over 34 million smartphones in the first half of this year.


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