The Chinese Xiaomi and Huawei are preparing a large-scale expansion of retail networks in Russia. Xiaomi expects to open about 100 stores this year and Huawei – up to 30, although according to Kommersant sources, it is considering the growth of 200 stores in the long term. Brands need more stores to sell more expensive devices that users can only evaluate in showrooms.
Huawei plans to significantly expand its sales network in Russia, reported three sources to Kommersant in the communications market. According to one of these, the number of single-brand stores in the company could increase to 150-200 in two years – now the company is looking for a partner for this project, negotiations are also underway with Inventive Retail Group (manages networks re: Store, Samsung and Sony) Huawei confirms the expansion of the network, but speak of a more modest scale: as stated in the press service, in 2019, the company plans to open 20-30 stores in the major Russian cities. Now Huawei has six stores in Russia and a multi-purpose center. Inventive Retail Group declined to comment.
The large-scale expansion is brewing and Xiaomi. "In 2019, in total, we plan to open around 100 stores across Russia in close collaboration with our key partners and distributors," the company said. Retail Xiaomi includes various store formats, including single-brand and multi-brand stores, with particular attention to their brand. Now it has 30 shops and 29 "islands" in shopping centers.
Huawei and Xiaomi are constantly increasing their shares in the Russian smartphone market. According to the GS Analytical Center, Huawei's shipments to Russia since 2016 have increased 5.5 times and reached 8.84 million units by the end of 2018, Xiaomi's shipments have increased by 7.2 times over the same period , to 2.3 million units.
In the mobile phone market, Huawei in second place in 2018 ranked second after Samsung and Xiaomi ranked fifth, also behind Apple and Nokia, which provided low-cost button devices.
"Huawei is still clearly lagging behind in terms of retail development by other market leaders," said Eldar Murtazin, an analyst with the Mobile Research Group. "The development of branded retail can be expensive. I think that on this basis the company has placed a long-term strategy in this sector," he said. According to the expert, the new Huawei stores will include not only the open display of devices and promotions, but also service centers: this format requires an area of at least 50 square meters. m and can cost up to 4 million rubles. at the opening of the cabin and about 1 million rubles. per month in his service.
Based on the market share of the company, Huawei will not be enough even for 30 salons, but if it is part of a long-term strategy and the company focuses on quality, then this is a reasonable number, Arvydas Alutis, former general manager of the Rostelecom sales network. According to him, the brand will need at least 100 of its stores to continue to increase its share constantly: "Now Huawei has a range of devices that are commensurate with Apple at a cost, but consumers can only see and evaluate their opportunities live, and this requires trade show rooms ". According to another source, "Kommersant" in the future, the company plans to sell not only mobile devices, but also "smart home" appliances, as well as Smart TVs.
The number of single-brand salons should be limited to millions of cities, says Alexander Malis, president of the combined Svyaznoy-Euroset company. He adds that the development of the retail format of this format makes sense only for the larger brands – with a market share of at least 15%, otherwise such a network would be unprofitable.