BENGALURU: When Chinese phone maker Xiaomi starts its own portal to sell phones in India, it may adopt the model followed by Amazon and Flipkart to work around the country's retailing regulations. Xiaomi will likely set up a marketplace platform and bring on board third-party retailers to sell the phones on its portal Mi.com. Xiaomi will supply the sellers so that it doesn't flout retailing norms, according to sources. By creating a marketplace-like structure, it will avoid regulatory issues around retail foreign direct investment, said a person aware of Xiaomi's plans in India.
"Technically, they can't set up a business-to-consumer ecommerce site in India because that's not allowed," said Devangshu Dutta, chief executive officer of retail consulting firm Third Eyesight. Xiaomi, one of China's largest smartphone vendors, has been selling devices in India by holding flash sales on e-tailer Flipkart and through Airtel stores. The company is yet to finalise its own online plans.
"We've been seeking expert advice on how to structure it. We won't do anything which is against the spirit of the law," said Manu Jain, head of Xiaomi India.
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