May 14, 2015 by ...
Due to Indian laws, Xiaomi is unable to establish a retail presence to sell its phones. This means that they must sell through sites such as Flipkart in order to handle the ‘heavy lifting’.
The problem with this model is that in the process, Xiaomi loses cash. That notion is disconcerting with a tight-fated firm known to squeeze pennies into carbon. Don’t waste your sympathy on them, however, for in order to squeeze a penny even more, Xiaomi will set up a portal and change all that.
Retailers and profits
Retailers remain in business by purchasing at 30% of cost or more. They are essentially aggregators who are paid for access to their client base, think Walmart.
Xiaomi would love to save that cash and reinvest it in things like KTV parties and bullying pre-production Apple units-allegedly.
In any event, Xiaomi must use local distributors due to Indian laws. Of course they try and skirt such legal codes by setting up online business etc.
They have partially dumped Indias FlipKart and partnered with Amazon and others. They will offer customer ‘feels good’ centers which by their look and feel, will allow customers to pretend they are in a real ‘Apple store’ and not some knockoff.