Xiaomi to delay overseas expansion

Bloomberg

Tue, Nov 25, 2014 - Page 14

Xiaomi Corp (小米) is delaying aggressive plans to expand into five more nations this year as the Chinese smartphone maker talks with Foxconn Technology Group (富士康科技集團) about boosting production of the low-cost devices.

Xiaomi and Foxconn are discussing making phones in India and Brazil, Xiaomi’s vice president in charge of global operations Hugo Barra said in an interview yesterday near New Delhi.

Beijing-based Xiaomi, the world’s third-largest smartphone vendor, might also consider manufacturing in Indonesia, Barra said.

“Our focus is to add market-by-market, one market at a time,” Barra said.

Xiaomi founder and chief executive officer Lei Jun (雷軍) pushed the four-year-old company beyond its home base this year into India, Singapore, Malaysia, the Philippines and Indonesia. That growth helped catapult the company past other domestic manufacturers in the third quarter to trail only Samsung Electronics Co and Apple Inc.

Entry into Thailand, Russia, Mexico, Brazil and Turkey is postponed until next year, Barra said.

“They should be sure they have solid plans for the markets they do enter,” said Sandy Shen, a Shanghai-based analyst with Gartner Inc.

Xiaomi own no manufacturing capacity of its own and relies on contract manufacturers, including Foxconn’s FIH Mobile Ltd (富智康) and Inventec Corp (英業達), to build its phones. India is likely to be a focus for years, which is why the company is looking to add manufacturing capacity there, Barra said after introducing plans for the local sale of the Redmi Note.

With India as its largest overseas market, Xiaomi could surpass both of the larger competitors to reach No. 1 within a decade, Lei said last week.

India is a key market for Xiaomi as it works to boost users of its devices to 200 million from 70 million currently, Lei told the World Internet Conference in Wuzhen, China.

Xiaomi started selling phones in India in July through a partnership with Flipkart.com, the nation’s biggest online retailer. That marked a departure from its China model, in which the company sold devices primarily through its own e-commerce site.

The smartphone market in India is projected to grow 38 percent next year, with future expansion remaining above 10 percent, driven by devices that sell for less than US$200, according to International Data Corp.

To bolster India sales, Xiaomi last month said it added Jai Mani, a former Google Inc executive like Barra, to its India team as lead product manager.