Revolutionizing offline retail with our new retail dream

Over the past eight years, we continue to ask ourselves one question: “what has remained constant in the evolving world of business?”

Xiaomi’s answer is this: users have always expected amazing products at honest pricing. Over the past few years, we’ve created devices at accessible prices through our highly efficient online channels. But, we wanted to take on a new challenge of revolutionizing offline stores given their low efficiency, which adds unnecessary costs to products.

Since 2015, we set to revolutionize offline retail through our new retail model – a term that indicates a combination of the best in online and offline retail practices. We have significantly expanded our direct offline retail network, through our self-operated Mi Home Stores. Our direct offline retail capability allows us to broaden our reach and provides a better user experience, while maintaining similar efficiency and the same price point as our online channels.

The long lines at the opening of each new Xiaomi brick-and-mortar store across the world has become a recurring phenomenon and a testament to our new retail model. Our largest flagship Mi Home Store in Shenzhen that opened on 27 September 2017 marks another milestone for our new retail dream.

“It has become a tourist destination in Shenzhen these days,” said store manager Liang Chao. He was standing at the entrance of the beautifully designed 650 sq m, two-floor store, where several customers were trying Mi Electric Scooters, one of our bestselling products.

Liang said every month, the flagship store welcomes dozens of tourist groups from all over the country, with many new international customers. Located at City Crossing, a landmark shopping mall in Shenzhen, the flagship Mi Home Store features the full line of products from Xiaomi and Mi Ecosystem portfolio companies. Different from our previous offline stores, its second floor is a demo zone for users to experience what a truly connected home is like. By giving simple voice commands to Mi AI Speaker, users can control the TV, lamp and other smart devices connected to our IoT platform.

Products in the store also include items such as rice cookers, sofas, bedding, toothbrushes, pens, lithium batteries, and musical instruments – all of which have the same specifications of being quality products with low prices.

“Because we offer a rich portfolio and allow customers to experience products in stores, they have a stronger will to visit and buy repeatedly,” Liang said.

To create a more efficient and pleasant shopping experience, the store also offers a special shopping wall made of five 80-inch screens, allowing customers to tap a product and instantly receive information on its features and capabilities and if desired, consumers can instantly add it to their shopping cart and pay via WeChat. Additionally, every shop assistant has a mobile payment device, allowing users to pay at anytime, anywhere in the store, without waiting in line.

Changing the perception of “made in China” products

In the past, in China, a single article of clothing that costs 100 RMB could be sold for 1000 RMB in a shop, a shocking markup of 10X. The list is endless, which was why Chinese citizens used to buy in bulk while travelling abroad to bring back to China.

“It has always been difficult for me to understand why consumers have to bear the costs of this inefficiency. This is why Xiaomi has the will and determination to revolutionize the industry’s cost-efficiency. We do this by putting in every bit of effort to create quality products and maximize value to users,” said Lei Jun at the Mi 6X launch event in Wuhan this April, where we promised our users that our hardware business, including smartphones, IoT and lifestyle products, will have an overall net profit margin that will never exceed 5%.

Our offline stores are changing people’s perception of “made in China” products. Some users have said that they can walk into a Xiaomi store, close their eyes and buy anything, because they are confident that our products offer the best quality and price. You can also spot many international faces at our offline stores. Just like Chinese travelers who bring home products made in the US, international customers now bring our amazing products back home.

“Can you imagine tourist groups come all the way to our store as a must-see place on their travel itinerary? They purchase so many things here and eventually buy our big suitcases to put everything in,” Liang said.

Shortly after the flagship Mi Home Store opened, we debuted our first Mi Home Store in the Shenzhen Bao’an International Airport in March. In addition to our bestselling smartphones, it brings a range of travel accessories including suitcases, neck pillows and power banks to travelers.

“We’ve been continuously making innovations in our offline stores for consumption upgrade, and our stores are becoming more commonplace, enabling users to buy better products at lower prices at their convenience,” said Eugene Chan, general manager of Mi Home Stores in South China.

Just as Lei Jun wrote in a recent letter to all Xiaomi employees, “nothing can surpass the feeling of hearing a user say that they can walk into a Mi Home Store, and buy any product with confidence, because they know that our items offer the best quality and price. When I hear this, I know that all our effort and energy has not gone to waste.”