Xiaomi Goes All-In On Retail to Revive Sales

After pioneering online flash sales in China to reach the top of the smartphone market, Xiaomi is turning to old-fashioned retail to arrest its slide, according to Bloomberg. The phonemaker will roll out a chain of about 1,000 brick-and-mortar stores under the Mi Home banner over the next three years. The new target accelerates plans outlined just last month to open 200 stores in 2017.

Xiaomi, which was valued at about $45 billion in 2014, is resorting to traditional selling techniques to make inroads into the next generation of smartphone buyers who eschew buying online. While Oppo and Vivo use a network of resellers to reach consumers in rural areas and smaller Chinese cities, Lei’s strategy would be more akin to Apple’s, with plans to own and operate its own signature outlets.

“This is Xiaomi’s biggest problem: how we can overcome the obstacles of our business model,“ Lei said in a video clip from a business forum posted by national broadcaster CCTV. “Our model can no longer be online, it has to be new retail.“ “We have a chance to do 60 to 70 billion yuan in business“ from those stores, Lei said without specifying a timeframe.

Having its own network could also help Xiaomi push a wider variety of products. While the company is best known for phones, it’s invested in dozens of startups and now offers air purifiers, drones, speakers, TV set-top boxes and robot vacuum cleaners. Its Mi Home outlets resemble Apple stores with their white walls and spare space, but on display is the wider range of appliances that Xiaomi’s invested in over the years. It operates about 50 locations across China currently.

Xiaomi’s not just relying on offline retail to jazz up its phone sales. The company is close to using its own “Pinecone“ processors and could introduce the chipset within a month, the Wall Street Journal has reported. In so doing, it would join Apple, Samsung and Huawei in employing their own processors, which can heighten the user experience by making hardware and software work together more efficiently.