1. Xiaomi sets up second India unit

Xiaomi sets up second India unit

Xiaomi has set up a second factory in the country in Andhra Pradesh’s Sri City, the company announced on the sidelines of its Redmi 4A launch in New Delhi.

By: | New Delhi | Published: March 21, 2017 4:18 AM
For Xiaomi, though, this might not be enough given the supply constraints it continues to face here.

Xiaomi has set up a second factory in the country in Andhra Pradesh’s Sri City, the company announced on the sidelines of its Redmi 4A launch in New Delhi. While Xiaomi hasn’t given the exact capacity of the plant, the company claims it is now manufacturing one phone per second in India.

For Xiaomi, though, this might not be enough given the supply constraints it continues to face here. Most of Xiaomi’s devices are sold out within seconds of becoming available online during the weekly sales. However, Xiaomi India head and V-P Manu Kumar Jain said this is a problem they intend to solve. “The key for us was to start hitting one phone per second kind and we thought we will announce it only when we hit that number. Now we are hitting that consistently,” he told IndianExpress.com.

Jain said the company had been looking to expand its production in India since 2016. Xiaomi’s plants are operated by Foxconn and they employee over 5,000 people. Xiaomi says 90% of the employees are women. But Jain admits that with just one plant, Xiaomi was struggling to meet demand. “We were already running at 100% utilisation, but we were not able to meet the demand. Even today, with Redmi Note 4, we have sold 1 million units in 45 days, but probably if we had more stock we could have sold more phones,” he said.

So far, Xiaomi sells four phones: Redmi 3S, which has two variants; Redmi Note 4, which has three variants; Mi Max, which comes in two variants; and the flagship Mi 5 phone from last year. Other than the Mi 5 imported from China, Xiaomi says all of its phones are made in India.

“Mi 5 manufacturing process is complex and difficult, so we have kept the manufacturing in China. However, sometimes some small units are imported from China, depending on the demand. Like in the case of Redmi Note 4 we had 2,50,000 units; for that some units were imported from China, some were manufactured in India,” said Xiaomi’s vice-president.

However, Jain admits the company can’t really predict demand for its phones and said he didn’t know how much they wanted to ramp up capacity. “The biggest thing still holding us back is supply, and we’re trying to improve this. If you look at the past, with the Redmi 1S first sale we had 10,000 units, with Redmi 3S phones we had 90,000 units in the first sale. With Redmi Note 4, we had a quarter million units in the first sale. We said quarter million is an unimaginable number, but it went out of stock in ten minutes. So really demand is difficult for us to predict,” said Jain.

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