XIAOMI SET TO EXPAND PRODUCTION CAPACITY WITH 3 NEW PLANTS
Seeks to ramp up manufacturing to meet surging demand, avoid supply crunch as seen last year
Xiaomi has enlisted three original equipment manufacturers (OEMS) to boost its supply of smartphones and smart televisions (TVS) in India. The Chinese major will now have three additional plants to feed local demand that has grown rapidly after the lockdown in 2020. Xiaomi has partnered two Chinese OEMS — BYD Electronic Company and DBG Technology — for smartphone manufacturing.
Leading consumer electronics firm Xiaomi has enlisted three original equipment manufacturers (OEMS) to boost its supply of smartphones and smart televisions (TVS) in India. The Chinese major will now have three additional plants to feed local demand that has grown rapidly after the lockdown in mid-2020.
Xiaomi, that leads in both the smartphone and smart TV markets in India, has partnered two Chinese OEMS — BYD Electronic Company and DBG Technology — for smartphone manufacturing here.
Shenzhen-headquartered BYD has been a supplier to Nokia and Motorola for years, and is currently setting up a plant for Xiaomi in Chennai.
DBG, that originated from Huizhou (in China’s central Guangdong province), has already set up a facility in Bawal in Haryana. Additional capacity offered by DBG has increased Xiaomi’s monthly smartphone supply by 20 per cent in India. While the smartphone company did not specify numbers, the data from the International Data Corporation (IDC) shows Xiaomi having shipped 41 million smartphones, or 3.4 million devices every month, in 2020.
According to Manu Kumar Jain, managing director, Mi India, BYD India is also expected to contribute significantly to the production capacity once its operations begin in the first half of 2021. Xiaomi has been sourcing smartphones locally since 2016, but the pandemic triggered the need for rapid expansion in local supply. The sudden surge of Covid-19 cases in India and the subsequent lockdown brought its business to a grinding halt. Since all its suppliers were operating at lower levels, even after the initial phases of the lockdown, it had to import the finished handsets from China on a mass scale — something it had never done in the past few years.
“2020 was an exceptional year. The pandemic led to multiple challenges, disrupting the entire global and India supply chain. Despite this, the Mi India team worked together to further expand its local supply chain and manufacturing capability,” said Jain.
Apart from bringing new suppliers on board, Xiaomi is also hoping to take advantage of the newly launched production-linked incentive scheme that offers incentives on incremental production of smartphones with 2020 as the base year. Both its existing handset suppliers — Foxconn and Flex — have secured approvals under the scheme.
With new partners on board, Jain said the company has managed to adequately localise its supply chain, and 99 per cent its handsets are now made in India.
Xiaomi, that holds close to 15-per cent share of the country’s TV market, has tied up with Hyderabad-based TV maker Radiant Appliances & Electronics. Xiaomi has been sourcing its smart TVS from Dixon Technologies (India). With Radiant on board, its entire TV portfolio is now locally made, it said.
According to Jain, nearly 75 per cent of the components used in Xiaomi phones are locally sourced from partners such as Sunny India, NVT, Salcomp, LY Tech, and Sunwoda, among others.
Xiaomi, that began its India journey in mid-2014 with imported handsets from China, now sources key components like printed circuit board assembly, sub-boards, camera modules, batteries, cables, chargers, and power banks from factories located in India.
According to the IDC, Xiaomi continued to face supply shortages throughout 2020 that had begun with disruptions in China in the early months. This resulted in a 6 per cent decline in its annual shipments last year. It, however, maintained its leadership position with 27-per cent market share — well ahead of rival Samsung (at 20 per cent).