Top retailers in India caught in Samsung-Xiaomi war

Samsung is said to be unhappy with two leading retail chains for promoting rival Xiaomi’s smartphones with store-front signage and in-store branding as its battle with the Chinese company for control of the retail channel intensifies.
The two companies have been trying to dominate the retail space since July when Xiaomi, till then focussed only on e-commerce, stepped up efforts to rope in leading offline stores as preferred retail partners.
Officials of the two retail chains refused to comment due to the sensitivity of the matter.
An email sent to Xiaomi India did not elicit any response. Samsung India, too, did not respond to an email.
“Samsung is trying to sort out the issue with the two retailers ahead of the festive season,” an industry executive said without wanting to be named.
This comes at a time when several neighbourhood cell phone stores are teaming up to take Samsung to the Competition Commission of India (CCI) for not supplying handsets for almost two months after they tied up with Xiaomi, three industry executives said. They will approach the CCI arguing that Samsung and its distributors are not allowing them to do business with other brands, impacting their business, the executives said. About 300 retailers in Delhi, Hyderabad, Jaipur, Haryana, Indore, Lucknow, Kanpur, Gujarat and Kolkata have been affected after they signed up with Xiaomi as its preferred retail partner, they said.
The owner of a cellphone store in Delhi said the retailers took legal opinion and decided to approach CCI after Samsung and its distributors categorically told them there will be no supplies till they stopped selling Xiaomi smartphones, which already account for 35-40 per cent of their business.
“In fact, Xiaomi is helping the affected retailers with advice and additional business support. This is a good opportunity for Xiaomi to get retailers’ confidence, now that it is betting big on brick-and-mortar retailers to grow in India,” one of the executives quoted above said.
The CEO of a retail chain said Xiaomi has informed retailers that it will support them by changing its business strategy. The Chinese smartphone maker is introducing its new models like Mi A1 and Mi Max 2 in offline stores along with their online launch, as compared to its earlier strategy of launching them online first.
Xiaomi India managing director Manu Jain had recently tweeted that the company’s offline sales have grown 10 times since January after it roped in retailers as preferred partners, and around 20 per cent of the sales now are offline. He also tweeted that all those offline retailers who have joined hands with the company have reported massive jump in traffic and sales.
As per Hong Kong-based market tracker Counterpoint Research, Samsung is the smartphone market leader in India with 24.1 per cent share for the April-June period, followed by Xiaomi at 15.5 per cent.