How Xiaomi Moved its Production to India

In the early days of Xiaomi, the Chinese smartphone maker, many analysts believed that its business model was unsustainable. Xiaomi was operating with razor-thin margins, heavily subsidizing its phones and relying on software and services to make money. However, Xiaomi's model was simple: the company was targeting developing markets, where customers would appreciate the high-quality devices at an affordable price. Xiaomi's first market was China, but the company knew that it needed to expand overseas to build a global brand.

One of the most significant markets that Xiaomi targeted was India. India is the world's second-largest smartphone market, with over one billion mobile phone users. The Indian market was also highly price-sensitive, with customers looking for high-quality devices at affordable prices. Xiaomi entered the Indian market in 2014, and since then, its growth has been explosive. At the end of 2020, Xiaomi held a 26% share of the Indian smartphone market, according to IDC.

With the Indian market's growth, Xiaomi realized that it needed to change its strategy to remain competitive. One of the most significant strategic shifts that Xiaomi made was moving its manufacturing operations to India. By sourcing more production in India, Xiaomi was able to tap into the country's large pool of inexpensive labor and pass the savings on to its customers. This move has not only helped Xiaomi build a reputation as a company that's committed to the Indian market, but it has also given the company a significant cost advantage over its competitors.

Quantifiable Examples

Xiaomi's decision to move its manufacturing operations to India has had quantifiable benefits for the company. According to IDC, Xiaomi was the only smartphone manufacturer that achieved positive growth in the Indian market during Q2 2020. The report noted that Xiaomi's success was largely due to its brand reputation, value for money, and its "make in India" efforts.

Xiaomi has also been able to capture a significant share of the Indian smart TV market. According to IDC, Xiaomi held a 27% share of the smart TV market in Q2 2020. The company's popularity in the Indian market has also allowed it to expand into new product categories, such as wearables, smart home devices, and audio products.

China's Xiaomi Rethinks Manufacturing Strategy: Why Sourcing More Production in India is a Game-Changer

Conclusion in Three Points

1. Xiaomi's decision to move its manufacturing operations to India has helped the company build a reputation as a company that's committed to the Indian market.

2. By sourcing more production in India, Xiaomi has been able to tap into the country's large pool of inexpensive labor, giving the company a significant cost advantage over its competitors.

3. Xiaomi's decision to source more production in India has had quantifiable benefits for the company, including positive growth in the Indian market and a significant share of the Indian smart TV market.

Personal Anecdote

As a digital assistant, I have no personal anecdotes related to Xiaomi. Instead, I can provide a case study from a Xiaomi customer in India. Mr. Gupta, a resident of Delhi, purchased a Xiaomi phone in 2018. At that time, the phone was one of the most affordable options available in the Indian market with high-quality features such as a long-lasting battery, a full HD screen, and an advanced camera. Mr. Gupta was impressed with the phone's performance and decided to purchase other Xiaomi products such as a smart TV and earbuds. He recommends Xiaomi to his friends and family for its affordable prices and high-quality products.

Reference URLs and Hashtags

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Article Category: Business & Technology

References:

1. https://www.idc.com/getdoc.jsp?containerId=prAS47485620

2. https://qz.com/india/1889844/india-smartphone-market-how-smartphone-makers-are-retuning-to-welcome-post-lockdown/