Xiaomi May Soon Start Manufacturing Phones in India
If you suggested anyone to buy a smartphone “Made in China” a couple of years back, you would probably have been mocked at! Notwithstanding the fact that most Apple components are outsourced from China and some of their products are assembled there as well.
Look at how Xiaomi changed the way we look at Chinese products- once derided, they are now one of the most sought after. Their phones (Mi 3 and Redmi 1s) have been sold within a few seconds!
With Samsung and Apple sitting pretty at the top of the list among smartphone sellers, a handful of indigenous brands like Micromax, Karbonn and Lava captured the lower end of the smartphone market by importing either entire handsets or the key components from the neighboring market and selling them here- a strategy that worked perfectly for them for almost half a decade, which is eons in today’s digital era!!
When Xiaomi proposed a brand that would be sold entirely online, everyone scoffed at the idea. Some almost wrote it off saying the project was doomed. Today, the Chinese manufacturer has become the third largest smartphone vendor in the world – barely three years after its first product hit the market.
Now, Xiaomi seems to be taking one more step to increase it’s presence in India. They plan to manufacture some of its devices in India, one of its largest off-shore markets. Talks on the topic are already on with the manufacturing partners in China. The giant had earlier considered the possibility of beginning work on Nokia’s now defunct plant near Chennai for assembling their products, but then gave up on the idea because of the lack of component ecosystem required to manufacture smartphones.
“We’ve started talking to some potential partners to see if they can assemble the phones for us in India,” said Manu Kumar Jain, head of Xiaomi’s India operations.
“We are beginning to explore, along with these partners, what are the regulatory constraints, the financials around it, how much investment we need to make, tax implications of setting up a manufacturing plant as it is far more complicated,” he added. “It will be the longest lead-time activity that we will do in India.”
The four year old startup which has been in India for only two years knows that India is one region which is crucial for its off-shore success – because of the huge numbers that make up the country and because the smartphone penetration level here is comparatively low. The manufacturer which claims to have sold more than 800,000 Mi 3 and Redmi 1S smartphones, launched the 3G and 4G versions of the Redmi Note in India for rock bottom prices (Rs 8,999 and Rs 9,999 respectively) on Monday- a fraction of what Samsung or Apple would charge for similar features and specifications.
“Our two main partners in China are FoxConn and Inventag. They, among several others, are interested in coming to India,” said Hugo Barra, head of international operations, adding that preliminary discussions had begun. “It is a goal that we have, say within a year or two,” Barra said. “We have looked at it (Nokia plant), not too closely though. There would still be quite a few things missing.”
Xiaomi’s CEO had recently mentioned that India is an important market for them (and largest overseas market) as they aggressively make a march towards being the number 1 smartphone company in the world. If they setup manufacturing plant in India, it will surely help them approach Indian market even more aggressively!