Xiaomi to expand presence in India to leverage the country’s e-commerce boom

Chinese smartphone company Xiaomi intends to set up two manufacturing plants in India as well as introduce more devices this year. Co-founder and president of Xiaomi, Lin Bin said that he will be devoting a lot more time to India. The company plans to manufacture handset peripherals as well as components in India.

Lin stated that his company believes China will be a flat market and maybe even experience declining growth. Xiaomi anticipates India already the fastest growing smartphone market in the world to sell around 140 million devices this year. It is an increase from sales of 100 million in 2015.

Lin added that the number of people buying smartphones through e-commerce is going to rise very quickly, and Xiaomi is a big part of that. According to him, the currently considerable competition in the Indian market similar to the competition in China few years ago was not sustainable. In his opinion, Xiaomi will be the leader when market share consolidates.

Xiaomi came to India in mid-2014 and began local manufacturing around a year later. It has allied with the world’s biggest contract producer, Foxconn which presently manufactures 75% of the company’s phones at its Andhra Pradesh plant.

Lin said that Xiaomi held talks with Foxconn regarding opening two facilities. Foxconn is in talks with some of the states. Manu Jain, Xiaomi head said the company is trying to get at least one plant operational within this year.

The company will attempt to benefit from the Union Budget recommendations which offer discounts to local manufacturing of mobile phone accessories. Xiaomi has already begun working on getting a few of those local suppliers to India.

The company hopes a boom in e-commerce in India will make up for slowing sales in China. Xiaomi sells nearly all of its phones online to minimize costs. It recently launched the Redmi Note 3 a made-in-India smartphone.

Lin said that one-third of all phones is sold online in China. In India, 30% of phone sales are online. Lin hopes in a few years the figure for India will be 50%.