Xiaomi does a U-turn, plans to open 1,000 stores

Xiaomi is now converting some of its 33 “experience center” outlets across mainland China into proper stores ahead of a major retail push. Photo credit: Xiaomi.

In a major U-turn to its way of doing business, Xiaomi is set to open hundreds of retail stores per year across China. CEO Lei Jun yesterday announced the struggling phone and gadget maker “will open 1,000 stores by 2020,” reports the Shanghai Daily today.

The move is in stark contrast to Xiaomi’s focus on online sales ever since its first phone was released in 2011.

No, that’s not an Apple store. Photo credit: Xiaomi.

It comes as Xiaomi, which was China’s top smartphone brand in 2014 and 2015, looks set to lose its crown as compatriot brands Huawei, Oppo, and Vivo grow in popularity with their more premium phones.

Arch-rival Huawei already has 11,000 stores across China.

Xiaomi initially experimented with brick-and-mortar service counters and “experience centers” called Mi Home outlets – which strongly resemble Apple stores. It now has 33 of those, of which 25 have been converted already to sell products. They feature not only phones but also the growing array of home appliances and other gadgets that Xiaomi makes, from drones to rice cookers, TVs to T-shirts.

“As Xiaomi matures as a company, and as the Xiaomi branding has grown to become a household name in China, we recognized a fantastic opportunity to start expanding our Mi Home outlets,” explains a Xiaomi spokesperson to Tech in Asia. “We are therefore converting these Mi Home outlets into retail stores, and we will be opening even more Mi Home stores – aiming for 60 by the end of this year.”

Taking the fight to Huawei

Five of the converted Mi Home stores are each pulling in over US$1.5 million worth of sales each month.

With 1,000 Xiaomi stores on the cards, smaller Chinese cities will also be covered.

XIaomi boss Lei Jun. Photo credit: Tech in Asia.

The retail shift, which will significantly raise Xiaomi’s operating expenses, emulates its main rival, Huawei, whose presence has always been very visible on China’s streets.