Original Equipment Manufacturer (OEM) Xiaomi India plans to ship 70 crore devices, including smartphones, televisions, tablets, and connecting devices, over the next 10 years.
Xiaomi India President Muralikrishnan B said the company plans to further expand its manufacturing partnerships in India for enhanced local value addition. "As of 2023, approximately 35% of the non-semiconductor BOM (material bill) of the phone will be sourced locally. With our strategy to broaden and deepen the company's localisation ecosystem, we expect this number to go up to 55% of a smartphone's non-semiconductor board in the next two years, "Muralikrishnan said.
Noting that the smartphone maker plans to source locally in the next couple of years, the top executive of Xiaomi India said the company is looking to increase the "net domestic value addition" of smartphones to 22% by 2025. By the end of 2023, the metric was about 18%.
So far, Xiaomi has sold 25 crore devices in 10 years in the country. On the OEM's future sales strategy, Muralikrishnan said the company will focus on four key aspects, namely competitive pricing, marketing across social media, omnichannel distribution strategy and increasing investment in after-sales service.
The Xiaomi India president believes that the premiumisation "trend" has impacted the entry-level and mid-range smartphone segments. Considering that the average selling price of smartphones has gone up from Rs 8,800 in 2014 to Rs 20,800 in 2024 (so far), the mid-segment (INR 10,000 to INR 15,000) will continue to lead the pack, Muralikrishnan added.
Emphasising that "single product brands will no longer exist," he said lately consumers are increasingly inclined towards an "ecosystem experience" of connected devices that includes phones, smartwatches and tablets.
Xiaomi's pivot to India comes at a time when the Indian government has synchronised all the ways for global electronics companies to roll out the red carpet under the "Make in India" initiative. Be it subsidies, or Production-Linked-Incentives (PLIs), the central government has taken every means to attract these OEMs.
On the other hand, more and more manufacturers are looking to turn to India as tension escalates between Beijing and Washington SC. While Apple's vendor Foxconn has been ramping up its presence in India over the past few years, Xiaomi has also ramped up production in the country in collaboration with domestic contract manufacturer Dixon Technologies.
In February this year, Xiaomi had internally told Indian authorities that smartphone component suppliers were wary of starting operations in the country. At the time, local officials were asked to consider offering manufacturing incentives and reducing import tariffs for some smartphone components.s
Xiaomi slipped to the second spot in terms of smartphone shipments in the first quarter (Q1) of 2024 with a 19% market share, according to Counterpoint data.
