Motorola steps up offline play to grow India sales with 1,000 Moto stores

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As it looks to grab a bigger chunk of India’s fast-growing smartphone market, Motorola is looking at growing its offline presence by setting up 1,000 Moto Hub stores across the country. The Lenovo-owned company is targeting 50 per cent of its revenues to be driven by the offline channel with this move.

Motorola re-entered India in its current avatar in February 2014, exclusively selling its devices online via Flipkart. Since then, the company has opened up to selling devices on other platforms as well as through channels offline. Currently, it claims a third of its revenues are driven by offline retail channels.

“About 70 per cent of the consumers still buy phones from the brick-and-mortar stores. Two- thirds of our business come from online and a third from retail channels. We are hoping that with the opening of 1,000 Moto Hubs across the country by the end of 2018, we will have a 50-50 share in online and offline sales,” said Sudhin Mathur, managing director, Motorola Mobility India.

Motorola is following the footsteps of Xiaomi, the Chinese company which recently overtook Samsung to become India's largest smartphone brand, in growing its offline presence. Xiaomi currently has 30 Mi Home stores, which are wholly owned by it and it plans to expand this number to 100 by the end of the year.

Smartphone manufacturers who initially launched their devices exclusively online are now increasingly looking at the offline channel to maintain growth. While smartphone sales in the country have continued growing, the share of sales happening online has stalled at around 30 per cent for some time now.

Like Mi Home stores, which allow customers to experience and buy all Xiaomi India products under one roof, Moto Hubs will have the entire range of Motorola devices and will be available for sale at the same price as on e-commerce platforms.

Of the 1,000 Moto Hubs, 50 will be based out of Bengaluru, another 50 such retail outlets will be set up in Delhi and Mumbai each and 25 in Kolkata. Motorola says currently 225 such Moto Hubs are already operational across the country.

The flagship hubs will be open spaces in malls, in large retail format chains and in mom-and-pop stores which account for almost 90 per cent of the offline mobile phone sales. The company has also collaborated with Poorvika Mobiles across 43 citi, s in Tamil Nadu, Pondicherry and Karnataka and with Big C and Lot Mobile stores across 55 cities in Andhra Pradesh and Telangana to provide retail access to consumers.

On lag in terms of supply, Mathur said, “We have our manufacturing capability in Chennai through Flextronics. It could produce six million units until last year, which has been upgraded to 12 million units this year. Hence, we have generated enough capacity in our local manufacturing capability to tackle any supply lag.”

Mathur said top 50 cities account for 45 per cent of smartphone sales in India and the next 100 constitute 35 per cent of the prospective buyers. Hence, the company is looking at expansion in Tier-I and Tier-II cities through these offline hubs.