Xiaomi to close more than 1,000 unprofitable stores
By ForGeeks
Xiaomi has announced a major shift in its retail strategy: the company is moving away from aggressive network expansion to a focus on quality and profitability. According to media reports, the manufacturer plans to close more than 1,000 unprofitable Xiaomi Home stores across China as early as 2026.
Wang Xiaoyang, senior vice president of Xiaomi Group and head of Xiaomi China, confirmed the decision in a notice to distributor partners. The document states that all stores opened before January 1, 2025 will be evaluated. Outlets that prove to be both low-performing and unprofitable will be closed. Xiaomi will bear the one-time closing costs —27.26 million yuan (about $3.8 million).
The company expects to help partners cut losses and stabilize the business. The measure will reduce distributors’ annual losses by about 72.46 million yuan (about $10 million), it says. The strategy demonstrates a choice between short-term financial impact and long-term sustainability.
The strategy will help partners reduce losses and stabilize their businesses.
Partners who do decide to continue operating such stores will lose access to company-appointed managers starting January 1, 2026. Xiaomi will no longer be responsible for the staff of these outlets, fully transferring the operational risk to the partners.
In addition, the brand intends to cut costs in its electric car retail business. The company will optimize staffing in its showrooms, moving from a 1+2+11 model to a more compact 1+1+5 model, which will reduce staffing costs and improve efficiency.
At the same time, Xiaomi will also optimize its staffing in its retail outlets to reduce staffing costs and improve efficiency.
The decision reflects a reallocation of resources, with Xiaomi focusing on the electric car segment and high margin products. This signals the company’s ambition to build a smaller and more profitable retail network in the future.
