China’s Xiaomi shipped 1.5 million smartphones to India in the fourth quarter of calendar 2015, and has decided to manufacture phones here along with its partner Foxconn. In an interview with The Hindu, Xiaomi’s India head Manu Jain said the firm’s priority in 2016 is to sell a majority of phones made in India, which reduces lead time, rather than importing from China.
Your views on the Make in India initiative?
We are extremely bullish on Make in India. Last year was our first full year of existence in India, and we announced in the beginning that we will start manufacturing phones in India. Within six months, we were rolling out devices from our partner Foxconn’s factory.
Why do you choose to make in India?
We started this initiative mainly because of two reasons. One, we wanted to be closer to consumers and be part of this fabric called India. Two, we thought it would help us from a supply chain perspective. Typically if you import goods from China, the lead time required for ordering goods is four to five weeks. So, I need to order today, what I need to sell five weeks from now. When you do India manufacturing that lead time comes down to two weeks. And it helps in saving a lot of working capital cost. For a company like us, which works on small margins and try to make high-end phones affordable, this is an important saving. On top of this, there are obviously the tax incentives that the government has announced. We are extremely impressed by the speed of execution. We thought it would take two years, but were able to set up a factory within six months. All approvals happened smoothly and quickly.
What are your priorities for India?
We are expanding our make in India initiatives. One of the primary goals we have set for 2016 is that the majority of phones we sell in India should be manufactured here. We introduced three such phones in India. We started with Redmi 2 Prime, Redmi 2 and Redmi Note Prime. The next device that will also be manufactured in India is the Redmi Note 3. Our key priorities are to launch more devices and reduce the lead time between channel launch and global launch in India. So the effort is, whenever we launch something in China, we bring it to India as soon as possible. We may not bring all categories of products but our focus will be on smartphones. We want to first build our smartphone business and ecosystem in India and then move on to new devices like smart TV.