Chinese smartphone maker Xiaomi has opened 500 Mi Stores in rural parts of the country and plans to set up 5000 more stores by the end of 2019, according to the company’s press release from earlier this week. The latest retail expansion efforts are part of the company’s push toward offline sales.

The offline segment accounts for nearly 60% of the Indian smartphone market and the rural markets Xiaomi is targeting accounts for 30%, Manu Jain, vice president and managing director of Xiaomi India was cited as saying by local media Business Today. The company sees great untapped potential as the market is “grossly underpenetrated,” said Jain.

Xiaomi has been offering its products through offline retail channels for more than a year and has started moving beyond tier four and five cities in India since earlier this year. The new Mi Stores will serve as Xiaomi’s primary retail locations in rural parts of the country. The Mi Stores on average are no more than 300 square feet, significantly smaller comparing to Mi Home’s retail space which, on average, is four-times larger.

When Xiaomi entered India in 2014, it started with an online-only strategy. The company now is the largest smartphone vendor in India, accounting for over 55% share of the online phone market and around 30% of the Indian smartphone market.

According to research firm IDC’s latest report on mobile phone market, South Korean smartphone maker Samsung, currently the second largest vendor in India, continued to lose share over the past few quarters due to the rapid growth of Chinese smartphone brands such as Xiaomi, Vivo, and OPPO.

Together, Chinese smartphone makers currently dominate the smartphone market India, holding about two-thirds of market share.

Nicole Jao is a reporter based in Beijing. She’s passionate about emerging trends, news, and stories of human interest within the world of technology. Connect with her on Twitter or via email:

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