Chinese smartphone maker Xiaomi and Bengaluru-based retailer Sangeetha Mobiles are looking to acquire the stores of Essar Group’s cellphone retail venture The Mobile Store.
Xiaomi, which competes with the likes of Samsung, Lenovo, Vivo and Oppo in India, would use a local partner to acquire the business and convert the stores into its exclusive ‘Mi Home’ outlets and may eventually take up stake if its application for single-brand retail foreign direct investment (FDI) is approved, reported ET.
Due to working capital challenges, The Mobile Store is winding up its 300 stores. For Sangeetha, this acquisition will provide a national presence and quicken its expansion outside South.
“Essar is exiting the cell phone retailing business after trying out various models like delivery of handsets in two hours, and due to its failure to get a strategic investor,” one of the executives said. “If there is no settlement overvaluation, Essar would try to offer the retail locations since those are mainly in demand. The potential acquirer will mostly be interested in the locations, not the brand or resources.”
The Mobile Store was once the country’s largest cellphone retailer with over 1,000 stores, but it lost out after the entry of Reliance Retail, which is the largest retailer of consumer electronics and mobile phones with over 2,000 stores, followed by Sangeetha Mobiles, which has over 400 stores.
To boost its offline sales during festivals, Chinese smartphone maker Xiaomi partnered with Big Bazaar, a supermarket chain from Future Group with over 240 stores in India to sell Redmi Note 4 and Redmi 4.
In May, the Chines handset maker also set up Mi Homes in Bengaluru to allow consumers to experience the products before buying them.
Last year, Xiaomi registered a total revenue of $1 billion, and it is going to redefine the Indian market with a steep revenue of $2 billion it plans to generate this year. The Chinese smartphone maker, with a 22% share in the Indian smartphone market, has closed the gap with market leader Samsung, which has a 23% share, as per Counterpoint Research data for the July-September quarter.
The company is pushing hard to achieve the expected revenue this year. It is expanding its retail presence as well as after-sales service. Compared to the beginning of the year, within a period of six months, Xiaomi India has increased its service centres from 225 to 500.
The company is planning to replicate its China model in India, as it aims to emerge as an internet company by monetising services such as finance and entertainment.