Xiaomi defends strategy of building offline retail network
Xiaomi founder Li Jun says he brushed aside critics who warned against setting up physical stores
Lei Jun, the founder of Beijing-based Smartphone maker Xiaomi, on Tuesday defended the company’s decision to expand its offline retail network, saying the strategy was paying dividends, even as the company suffered weaker growth in sales last year following supply chain problems.
Lei said that the company has an edge over other smartphone makers because Xiaomi designs, manufactures and sells its products on its own platforms, however he stopped short of offering up any specific solutions to fix its supply chain weakness.
“I was warned about setting up physical stores,” said Lei who was a speaker at the Alibaba Group Global Netrepreneur Conference in Hangzhou. “I was told that nobody would go to stores.”
Once hailed as China’s most valuable start-up, Xiaomi has run into troubles, which include delays in launching new models because of production problems.
Xiaomi’s 2016 shipments slumped 23 per cent and its share of the market fell to 8.9 per cent, lagging behind its three main rivals, according to research firm IDC.
Xiaomi now banks on its online-and-offline sales strategy and diversified product range, which includes air-purifiers and the Mi Box, a 4K Ultra HD streaming device and gaming box.