Xiaomi’s Indian arm will produce wireless audio products in the country through a partnership with electronics maker Optiemus, in a bid to further localise its operations, the company announced on Monday.
Xiaomi India will produce its first local audio gadget at Optiemus Electronics’ factory in the northern state of Uttar Pradesh, the company said in a statement. The company reiterated that it aims to increase the production of locally sourced components by 50 percent by 2025.
The push comes after the Redmi smartphone maker recently lost the battle to South Korean rival Samsung to become India’s largest smartphone maker.
The company has not disclosed what kind of audio product it will make at the Indian factory, but it is “committed to more such collaborations across a wider range of categories within our product portfolio.”
Xiaomi, which locally makes most of the smartphones and TVs it sells in India, hasn’t said when it will start making audio products. It sells speakers, earphones, wired and wireless headphones in India.
The Indian government is encouraging international companies to invest in local manufacturing as part of its vision to make the country self-reliant.
Last week, Xiaomi reported an 18.9 percent decline in quarterly revenue as consumer demand for smartphones remained weak even as the economy recovered from the COVID-19 pandemic.
After China lifted strict pandemic measures late last year, the country’s economy has rebounded, but consumers are spending cautiously. China’s smartphone industry has seen no recovery at all during that period. Total sales in China fell 11 percent in the first quarter of 2023, research firm Canalys reported in April. Xiaomi’s sales fell 20 percent during that period
India, once Xiaomi’s largest overseas market, has also proven less lucrative for the smartphone maker. Total smartphone shipments fell 20 percent across all brands in the first quarter, and rivals like Samsung have eaten into Xiaomi’s share of the shrinking market. The company has cut prices on several models in India and China in hopes of reviving demand.
In March, it was reported that Xiaomi would revise its strategy for India after it misjudged consumer tastes in mobile phones. The costly blunder saw Samsung Electronics knock the Chinese company off the top spot in the world’s second-largest mobile phone market.
While Xiaomi continued to focus on selling phones under Rs. 10,000, Indian consumers were willing to pay more for nicer models with richer features. South Korea’s Samsung launched products to meet those aspirations and offered innovative financing schemes that made them affordable to most.
The moves have seen Samsung take the lead in India’s competitive mobile phone market from Xiaomi. Data from Hong Kong-based Counterpoint Research shows that Samsung had a 20 percent market share in the fourth quarter of 2022, compared to 18 percent for the Chinese company.
© Thomson Reuters 2023
