Chinese smartphone maker Xiaomi Inc said on Thursday it would invest further and begin localproduction within 12 to 18 months in India, one of the world's fastest-growing markets andcurrently dominated by Samsung Electronics and local firms like Micromax.
The five-year-old Chinese company, whose name means "little rice," entered the Indian market inJuly last year and its low-priced but feature-rich smartphones have proved a big hit, with sales ofover a million phones within five months.
"We want to invest deeply in this market, we want to have a significant amount of research anddevelopment done here -- not only for India but the rest of the world," Hugo Barra, Xiaomi's vicepresident of international operations, said.
Xiaomi, already the fifth-largest phone company in the Indian market, is evaluating variouslocations to set up a manufacturing unit and is in talks with local partners and state governments,Barra said, adding that the process is likely to take at least a year.
Barra's comments highlight how important the India market is regarded by Xiaomi, valued at $45billion after a December funding round, said Neil Shah, a Mumbai-based research director fordevices at Counterpoint Research.
Barra did not say how much Xiaomi might be prepared to invest in India, its largest marketoutside China, but the company is looking to put money into start-ups and rolling out servicecenters.
"The fundamental point is we want to build deeply rooted Indian products because this is a hugelyimportant market for us and there is nothing more powerful than being a local business," he said,adding that India could also serve as an export hub.
"We are looking at (serving) the domestic market to start with but as we expand into othermarkets, particularly other markets in South Asia, it could make sense to export," he said.
In December Swedish telecoms equipment firm Ericsson obtained a court order temporarilyhalting Xiaomi's shipments to India, claiming the Chinese company had not been paying royaltieson its patents. The matter is pending in an Indian court.
However, speaking at the launch of its latest smartphone in India, Barra said it was "business asusual" for Xiaomi, which sold upwards of 60,000 phones a week last year.
The company, which sells its phones primarily through flash sales on online retailer Flipkart.com,also said it will open 100 stores in India this year to help consumers "experience" the company'sdevices, but will not sell them at these stores.
"They will have to go with physical distribution if they want to go beyond the urban consumers whoare just buying online and the setting up of a local manufacturing facility would be a step in thatdirection," Shah said.
Release date:2015-03-13 Browse number:2285