About 99% of phones Xiaomi sold in India were made in the country, says COO

Xiaomi phones in India are manufactured mainly by Taiwanese giant Foxconn, also known as Hon Hai Precision Industry Co. Ltd.

Business Standard : Almost all of the phones that Chinese smartphone maker Xiaomi sells in India are made in the country, a top company executive said here on Monday, stressing that 'make in India' Xiaomi smartphones are now being exported to other countries too, though at a small scale.

'About 99 per cent of the phones sold in India are made in the country. We make three phones per second,' Muralikrishnan B, Chief Operating Officer, Xiaomi India, told reporters. Xiaomi phones in India are manufactured mainly by Taiwanese giant Foxconn, also known as Hon Hai Precision Industry Co. Ltd.

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.

Xiaomi said it has also started exporting phones made in India to Bangladesh and Nepal.

'We have started exporting to these two countries at a small scale. With more government incentives, we plan to scale up the export of 'make in India' phones,' Muralikrishnan noted.

'We will have to see if we can manage the entire logistics. Ultimately, we will have to realise that cost efficiency also matters,' he added.

The COO of India's biggest smartphone seller said that there are various issues hindering export of its 'make in India' products to other countries including certification issues and low rate of duty drawbacks.

'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.

About 65 per cent of Xiaomi phone components are also sourced from within the country.

'In terms of manufacturing, the progress that India has made in the past 5 years is phenomenal,' said Foxconn India Country Manager Josh Foulger.

Besides initiatives under 'Make in India', the corporate tax relief and improvement in ease of doing business have helped a lot, he added.Significantly, all the operators at Foxconn's Sri City facility for Xiaomi are women. The facility employs over 15,000 people.

Smartphones beat slowdown as sales up 10%; Xiaomi tops Indian market

According to analysts, one of the key factors that differentiates smartphones from other products is their expose to the e-commerce market.

Business Standard : Raghu Reddy, head of categories and online sales for India’s leading smartphone company Xiaomi, is unfazed by the slowdown that has gripped the consumer goods market.

His confidence is not unfounded. According to the IDC India data, smartphone shipments grew by 10 per cent during the April-June quarter to reach 37 million units, the highest for the quarter. June quarter growth is traditionally the slowest, when shipments usually remain lower than the second half of the year.

The feat comes at a time key players in sectors such as automobile and fast-moving consumer goods (FMCG) have struggled to repeat last year’s performance. Volume growth in FMCG fell to 6.2 per cent in April-June this year from 13.2 per cent three quarters ago. Growth in rural market remained dismal at 5.9 per cent, which was lower than urban after several years.

Offtake of passenger vehicles, a barometer of consumer sentiment for big-ticket items, fared worse in over a decade. It fell by 18.4 per cent during the quarter. Country’s largest automaker Maruti Suzuki’s sales fell for six consecutive quarters till July. In June, its volume sales fell by 17 per cent and it plunged by a whopping 36 per cent — the highest in two decades — in July. Hyundai Motor India, the second-largest player in the sector, witnessed a 10 per cent drop in sales in July, after a 3.2 per cent dip in June.

Smartphone players, however, are way ahead. Xiaomi, which continues to lead the segment with 28.3 per cent market share, grew by 5 per cent. While Samsung, the second-largest player by volume, grew by 16.6 per cent, Vivo and Oppo expanded their shipments by 31.6 per cent and 41 per cent in June quarter, respectively. Realme, a sub-brand of Oppo and currently the fifth largest player, grew by a whopping 602 per cent year on year.

According to analysts, one of the key factors that differentiates smartphones from other products is their expose to the e-commerce market.

“The online channel continued its growth momentum fuelled by multiple launches, attractive offers, and affordability schemes such as EMIs or cashbacks. This resulted in YoY growth of 12.4 per cent for the online channel,” said Upasana Joshi, associate research manager, Client Devices, IDC India.