Chinese handset manufacturer Xiaomi is evaluating options to widen local manufacturing of categories other than smartphones, such as consumer electronics and consumer durables. Besides, the company has sought more tax incentives and clarity on certain ‘structural disabilities’ in duties from the Indian government to boost exports.|
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Evaluations are on for local manufacturing multiple categories such as wearables, purifiers, smart cameras, which are showing promising sales,” chief operating officer Muralikrishnan B said. “We will try and make as much as possible in India.”
Incidentally, the locally manufactured Xiaomi smartphones are now being exported to countries such as Bangladesh and Nepal in a small scale.
“Evaluations are on for local manufacturing multiple categories such as wearables, purifiers, smart cameras, which are showing promising sales,” chief operating officer Muralikrishnan B said. “We will try and make as much as possible in India.”
As much as 65% of each smartphone is made in India in association with Taiwanese manufacturer Foxconn. At Sri City, Foxconn has a 30-acre facility dedicated for making Xiaomi phones. The firm employs over 15,000 people. As much as 87% of these are women from Andhra Pradesh, Tamil Nadu and Odisha
“We make three phones per second,” Muralikrishnan said without disclosing the exact numbers. The manufacturing is being done at Xiaomi’s two facilities — one at the Sri City special economic zone in Andhra Pradesh and the other at Sriperumbudur in Tamil Nadu. “We will have to see if we can manage the entire logistics. Ultimately, we will have to realise that cost-efficiency also matters.”
BIS certification is not accepted in many parts of the world. If the government can make BIS certification accepted in countries in Europe, it would help us scale,” he said, adding that India has a lot to learn from Vietnam in terms of incentivising domestic manufacturing.
“In terms of manufacturing, the progress that India has made in the past five years is phenomenal,” Foxconn India country manager Josh Foulger said.
The company has a market share of 27.1%, according to IDC Quarterly Smartphone Tracker, Q3 2019. Smart TV brand has a market share of 32%, as per IDC Worldwide Quarterly Smart Home Devices Tracker Q2 2019, while the fitness wearable brand has 39% market share, according to Canalys Wearable Brand Analysis for Q2.
Xiaomi has shipped over 100 million smartphones in India in five years between Q3 2014 to July 2019 as per IDC 2019 reports. It has sold over 12 million Xiaomi devices in one month this year during festive sales from September 28 till October 29 which is over 40% year-on-year (y-o-y) growth over last year’s festive sales for Xiaomi. The total smart TV industry is estimated to be around 400,000 per month, while Xiaomi sold more than 600,000 smart TVs during this period.
Xiaomi has seven smartphone manufacturing plants across campuses in partnership with Foxconn, Flex and Hipad. Of the seven plants, four are in Sri City, Andhra Pradesh, and two in Tamil Nadu, one in Noida, Uttar Pradesh
Xiaomi has also partnered with Navitasys India, a TDK group subsidiary, to manufacture MI power banks locally. Xiaomi is also bringing its component ecosystem to India. Recently, Xiaomi announced that Holitech Technology, a global component supplier has inaugurated its first component manufacturing plant in India.
Holitech Technology has built its operations in Greater Noida and had been first invited by Xiaomi in Q1 2018 to investigate local manufacturing opportunities during its ‘Supplier Investment Summit’. Holitech would be investing nearly$200 million over three years in the country.
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