Xiaomi About “Make (More) In India”

Xiaomi in collaboration with Foxconn is in talks with some state governments from India.

PM Modi’s ‘Make In India’ club will now have a new addition, Xiaomi.

The Chinese company, encouraged by its remarkable performance in India in terms of smartphones and wearables, is in talks with some state governments from India to set up manufacturing plants in association with Taiwanese contract manufacturer Foxconn (best known as the maker of the iPhone).

This move would enable the company to meet increased demand by boosting production. It is noteworthy that the company already has a manufacturing unit in Andhra Pradesh in collaboration with Foxconn. The Xiaomi Redmi 2 Prime launched in India last year was the company’s first ‘Make in India’ smartphone.

India is the second largest smartphone market in the world, only preceded by China. At the same time, Chinese market is quite saturated at the moment and India’s market is kicking in strongly, with every passing day. Keeping in view this potential in India, Xiaomi’s decision to set up more manufacturing plants in India seems like a very wise decision. Adding to all this is the ‘Make In India’ program launched a while ago, whereby manufacturers enjoy various benefits if they manufacture in India.

This perhaps is a temptation enough for companies like Xiaomi to join the wagon.

“We are looking to expand capacity and set up more lines and plants. We are proactively looking at it and are working with our partner Foxconn. Currently, discussions are on with different governments”, Manu Jain, India head at Xiaomi, told ET. “We have also been increasing the capacity at the existing plant”.

China of course remains the priority for Xiaomi, however, the company is aware of India as a potential smartphone market and Xiaomi’s need to expand their presence in India.

Xiaomi has recently launched its largest device, Mi Max in India, and while the first batch of this device was imported from China the company plans to start the domestic production for this particular model around mid-July.

Over the past few months, smartphone shipments in the country have witnessed a decline; however, Xiaomi said that its sales have grown every month due to their focus on online selling and pocket friendly pricing.
Xiaomi’s Global VP, Hugo Barra claimed that the company had sold over a million units of its Redmi Note 3 smartphones, which helped it bag the position of the second-largest smartphone brand in the online space in April, behind Samsung.

“The demand for Redmi Note 3 is higher. We brought in 6 lakh units for the first two months, which is a fairly big number. Still, we are running out of stock. We have sold more than a million Redmi Note 3 units in India”, Jain said.

Redmi Note 3 is available in the offline stores as well, which could be because after achieving success through the online sales, Xiaomi is moving to the next level through offline sales. Further, Xiaomi has even applied for single-brand retail in the country, but is waiting for an approval from Indian authorities.

Chinese smartphone makers are staking heavily on creating online and offline presence simultaneously. LeEco in the same vein has opened their website, LeMall.
Xiaomi, meanwhile, has created the Mi Community website, where fans can register themselves for events, launches and exclusive deals.

There are a few products, which are not being launched in India despite Xiaomi being quite successful here. Mi Band tasted quite a lot of success and is the most sold wearable in India, yet there has been no news yet of Mi Band 2 being launched in India. On the other hand, Xiaomi in China is diversifying as it recently launched a ‘foldable’ electric bicycle that costs 2,999 Yuan.

This scenario might change with Xiaomi expanding their production in India, as with manufacturing plants being set up here, production, supply chain and even costs would make this entire ecosystem for leaner and significantly more profitable.

Better for all of us!

Originally published at Chip-Monks.