Chinese smartphone producer Xiaomi has opened up new manufacturing facilities in India, where it announced last year it would be concentrating its business.
The company previously had two facilities in India and has now set up three more units. These are in Tamil Nadu and Andhra Pradesh, while the company also has an existing presence in Uttar Pradesh.
Manu Jain, Vice President and India Managing Director for Xiaomi, has stated: “We had two facilities for smartphone manufacturing earlier. Now we have added three more.”
The five facilities across three campuses reportedly mean Xiaomi can produce two devices per second.
The company is also working to develop a PCB (printed circuit board) assembly point in collaboration with Hon Hai Precision (Foxconn). Jain stated: “We are committed to manufacturing in India. PCB is 50% of the value of a phone… by Q3, all Xiaomi phones made in India will have PCBs that are locally assembled.”
Regarding the company’s commitment to the Indian market, which has a similar population to its home market of China, but is less saturated and has a lower penetration, with consumers preferring to opt for a lower cost phone than the main competitors might offer.
Xiaomi’s Senior Vice President, Wang Xiang, recently told business Chief: “India has a huge population and as more and more Indian people are set to come online over the next decade, many of them will likely do so through mobile devices. We made the decision to focus on India as we saw the huge demand for high quality products at accessible prices, and in turn the huge potential.” However he added that China still remains an important market for the company.
Opening manufacturing facilities is a positive and lucrative way to show commitment to a particular market, as Arif Chowdhury, Vice President of TRANSSION Mobile, Africa’s biggest smartphone provider, commented to Business Chief last year. “This is actually a way to show the firm is confident in the market and [has] a true desire to demonstrate full commitment.” TRANSSION has opened a factory in Ethiopia so it is producing within its key emerging market, just like Xiaomi: “We offered initial support and now the facility is run almost entirely by locals,” Chowdhury explains, adding that the local production facility has “allowed us to increase our distribution capabilities and to significantly improve lead times”.
Chowdhury feels having a factory “shows you’re serious” in an emerging market, and consumers are more likely to buy from a company that is “here to stay”.
Jain echoes these sentiments, stating of the Xiaomi move: “In 2015, we extended our long-term commitment to the Indian market by joining the ‘Make in India’ programme. Today we are deepening this commitment with three more smartphone factories and our first SMT plant dedicated towards local manufacturing.”