Xiaomi teams up with new supplier to ramp up local production of mobile phones, TVs in India
Published: Feb 25, 2021 06:33 PM

Customers are seen at a store of Chinese technology company Xiaomi in Chennai, India. Photo: Xinhua

Chinese smartphone vendor Xiaomi said Thursday that it has tied with two new manufacturing partners BYD and DBG in India to set up factories in the country, ramping up its localization strategy. The No.1 smartphone brand in terms of shipment in India in coronavirus-plagued 2020 is expected to maintain its position this year, according to an industry analyst.

The DBG manufacturing facility is already operational in northern India state Haryana and the BYD facility in the state of Tamil Nadu in southern India will be completed within the first half of this year, said Manu Kumar Jain, managing director of Xiaomi India, according to a document that Xiaomi sent to the Global Times on Thursday.

Xiaomi already has three manufacturing plants in India in partnership with Foxconn and Flex.

With the DBG plant put into operation, the Chinese vendor is expected to increase its monthly production capacity by about 20 percent within this quarter, while the BYD factory should be operational within the first half of this year, with which, its smartphone capacity is set to increase further.

"The two Chinese suppliers BYD and DBG used to be in the Huawei supply system, but as they have been in the situation of lacking order since the Chinese tech giant's predicament of chip supply under the US' ruthless crackdown," Sun Yanbiao, head of Shenzhen-based research firm N1mobile, told the Global Times on Thursday.

"That said, the two manufacturers could potentially hit it off with Xiaomi," Sun said.

Since making foray into the Indian market in 2014, Xiaomi has been attaching increased importance to local production from building up plants to localizing layout of personnel, software and hardware, supply chain and ecology. 

In 2019, Xiaomi announced a new manufacturing facility in India which took up the total count of its manufacturing units in the country to seven. The 7th smartphone manufacturing hub was in partnership with Flex. These factories produce more than 99 percent of Xiaomi phones in India. In an earlier interview with IANS, Jain said that this is the company's goal for India.

In addition to the two new smartphone manufacturing partners, Xiaomi also added one new TV manufacturing partner Radiant which is based in Telangana.

"Now 99 percent of our smartphones and 100 percent of our smart TVs are manufactured in India and the majority of the components for smartphones will be locally manufactured or sourced from India. We hope to play a small role in building India as a global manufacturing hub," Jain said.

Despite the disruption caused by the COVID-19 pandemic on the smartphone industry in 2020, which caused the Indian market to meet with decline by 1.7 percent for the first-time following several years of growth, Xiaomi managed to grab the most market share in both the fourth quarter of 2020 and the full year with 27 percent market share, data from IDC showed.

Different from the frontrunner Samsung, which has been growing in the Indian market via expanding layout of offline brick-and-mortar stores, Xiaomi's strategic focus on online channels via e-commerce has reflected its big advantage last year during the pandemic, according to Sun.

"The proportion of mobile phone's online sales in India has jumped to 70 to 80 percent by the year end compared to the pre-virus level," Sun noted.

He forecast that Xiaomi will strengthen its dominant position via online channels and maintain its No.1 ranking this year.

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