The growing anti-China sentiment in India has had no material impact on the Chinese smartphone maker Xiaomi, the company’s head in India said on Thursday.
In the past six years, Xiaomi India has built a strong local culture and company, Managing Director Manu Kumar Jain told CNBC’s “Street Signs Asia”.
“Our product team, R&D teams are here in India. As we mentioned, all of our phones, most of our TVs are made in India, lots of components are locally sourced … all of the team from leadership is in India, “Jain said.
“So far, we are not seeing any significant impact on our business, with respect to sales or demand,” he added.
Xiaomi is the leading smartphone manufacturer in India and owns around 30% of the market today, according to data from Counterpoint Research. In fact, apart from Samsung, the rest of the top five phone manufacturers in the Indian market are Chinese companies.
Relations between New Delhi and Beijing have deteriorated in recent weeks due to a border clash in the Himalayas that left 20 Indian soldiers dead. Diplomatic efforts are underway to de-escalate the situation between the two nuclear powers. But public sentiment in India towards Chinese brands and products has soured, with emerging calls for a boycott.
For its part, Xiaomi has been covering its brand outside of retail stores with the “Made in India” logo, for fear that people may damage the stores due to anti-China sentiments, local media reported. He also reportedly asked promoters at his workshop not to wear the brand’s uniform.
Jain added that the company has seen a backlash on social media, but that has not affected sales or demand.
India is also reportedly planning higher import tariffs and trade barriers for around 300 products from China and elsewhere, which he quoted two government officials as saying. The plan had reportedly been under review since at least April, before the border crash occurred. It is in line with Prime Minister Narendra Modi’s campaign to make India self-sufficient and promote local products, the news cable said.
Potentially higher tariffs are not a “big concern” for Xiaomi, as more than 99% of its phones sold in India are manufactured locally, according to Jain.
“And, not just phones, 65% of these components are locally sourced or manufactured locally. So if you look at the amount of components that we buy from abroad, it’s actually very low,” he said, adding: ” Even if there is any additional import duty, the impact on our business will be negligible. “
A vendor talks to a customer after buying a new smartphone made by Xiaomi at a Mi store in Gurgaon, India on August 20, 2019.
Sajjad Hussain | AFP | fake pictures
The coronavirus pandemic, however, is a source of “genuine concern” for the company, which has seven manufacturing plants in India. Jain explained that the closure of India had left Xiaomi with a labor shortage in all areas of business, including manufacturing, warehousing and delivery.
The government now allows the company’s factories to operate with about a third of its workforce, running limited shifts that follow the patterns of social distancing. But the measures have slowed the resumption of the company’s production, according to Jain.
“We have not been able to increase to the same level as the pre-Covid,” Jain said, referring to the disease caused by the coronavirus. She added that Xiaomi expects production to return to pre-pandemic levels later this year.
India has more than 473,000 reported cases of infection, although the health ministry says the recovery rate is higher than current active cases.
Jain addressed media reports alleging that Xiaomi was recording the private use of the web and the phone of millions of people. She said that all the data collected by the company, with the consent of the users, is anonymous, aggregated and encrypted, which means that people cannot be tracked based on that information. All the data collected in India remains within the country on Amazon Web Services’ servers, he said.
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