Xiaomi distributor Mobile in Africa plans to open stores in South Africa focused on promoting and selling the fast-growing Chinese smartphone brand, its head, RJ van Spaandonk, said on Thursday.
Mobile in Africa, which is a sister company of South African Apple distributor Core Group, plans to emulate the success of Core Group’s iStore retail chain in launching the Xiaomi-focused stores, Van Spaandonk said in an interview with TechCentral.
News of the planned retail chain comes as Core Group opens its 22nd iStore in South Africa, in the Mall of Africa near Midrand in Johannesburg, this week.
Van Spaandonk said iStore is a premium brand, which has a different target market to Xiaomi. “iStores have worked extremely well for us and for Apple,” he said. Mobile in Africa is still looking for the right locations and “working out the right concept” before opening its first stores in South Africa, he said.
Xiaomi — pronounced “shao-me” — was founded in April 2010 by Lei Jun. It released its first handset in August 2011. By October 2013, it had become the fifth most used smartphone brand worldwide.
The launch in sub-Saharan Africa, through Mobile in Africa, is the first time Xiaomi has expanded outside Southeast Asia. Former Google executive Hugo Barra heads up global expansion.
Van Spaandonk said Xiaomi emerged with a high-quality but affordable product just as the Chinese market was moving from feature phones to smartphones. “Prices [of other brands] were just too high for many Chinese people. Xiaomi introduced a smartphone at an affordable price, with an operating system and a set of services optimised for the Chinese market.”
He hopes Xiaomi will be able to replicate its success in China in Africa as consumers migrate to smartphones.
Core Group, which has worked with Apple for more than 15 years, secured the rights to represent the iPhone in more markets across Africa, but the company soon realised that affordability was a significant barrier in countries where people couldn’t get phones on contract.
“In emerging markets, where credit rating systems are not good enough to take out risk and credit recovery mechanisms are difficult, operators do not offer contracts,” he said. “People have to pay cash upfront for their devices. We realised that to keep growing our business, we had to sell smartphones [at a lower retail price].”
Although Mobile in Africa is a sister company to Core Group, with the same shareholders, the companies are separated by a Chinese wall, and have their own marketing and sales teams. They do, however, share warehousing space.
“We felt we couldn’t miss out on Xiaomi, given they are such an innovator in the smartphone space,” Van Spaandonk said. The companies reached an agreement in mid-2015, with the first phones going on sale in South Africa at the end of last year.
For now, Mobile in Africa is focused on the key markets of South Africa, Kenya and Nigeria. “The products obviously end up in surrounding countries, through partners,” said Van Spaandonk. — © 2016 NewsCentral Media
