KOLKATA: Samsung and Xiaomi are stepping up their fight in the Indian market with both sides seeking to win over the retail trade. The South Korean company has even stopped supplying its handsets to 200 retailers that entered into an agreement with Xiaomi to become preferred sellers for the Chinese brand’s phones, said several people with knowledge of the matter. Xiaomi expects its smartphones to account for over half of the total handset sales at these retailers.
Xiaomi India managing director Manu Jain sent a message of support to a WhatsApp group for members of the trade. “I really appreciate that all of you are standing strong, despite the recent action taken by competition,” he said in the communication that ET has seen. “Please do not worry about any brand taking away stock or other support. We will support you with more stock if required. In addition, we are also planning a financing scheme which we should be able to announce shortly.”
A Samsung India spokesperson said it was India’s biggest and most trusted smartphone brand. “We have built the widest network of partners across the country, with whom we have been working for over two decades, winning the trust and love of consumers, together. It is our endeavour to provide the best retail experience to our customers, and we will continue to work with our partners for this.”
A Xiaomi India spokesperson declined to comment on the matter.
Samsung’s mid-level sales executives are said to have rushed to retailers across India asking them not to sign up for Xiaomi’s preferred retail partner programme and for the first time are ready to pay for store branding in stores that are next to such outlets, five senior industry executives said. Of the 200 preferred retail partners, half are in the National Capital Region with a total monthly revenue of around Rs 100 crore.
“This is the first time any brand has stopped supplies to retailers for giving preference to another brand,” said the owner of a large cell phone store in Delhi that’s been cut off by Samsung.
“Samsung executives have informed retailers that they do not want to give an inch of space to Xiaomi due to the increased Chinese aggression already from Oppo and Vivo and they don’t want to repeat the mistake they did in China.”
The stakes are high for Samsung considering it has been elbowed out of China, the world’s largest market, by local manufacturers. Online-focussed Xiaomi now wants to expand into the offline market in both India and China to boost sales. It’s expecting 35% of its $2 billion India revenue target to be generated by offline sales this fiscal year.
The conflict is likely to intensify with Xiaomi looking to sign up more than 1,000 top retail partners across India as part of which it has started direct distribution to large stores. Xiaomi’s preferred retail partner programme involves getting dominant signage outside the store and up to a third of it inside. It also plans to offer consumer finance as mentioned above.
Samsung has enjoyed a commanding brand presence in retail stores, even though Chinese rivals Oppo and Vivo have been trying to breach that by buying space from retailers.