Chinese smartphone maker Xiaomi sees India as its most important overseas market and plans to invest another $500 million in the country, which is the world’s second largest smartphone market.
Xiaomi co-founder and CEO Lei Jun (pictured) told Bloomberg he expects sales in India to double this year to $2 billion. The once fast-rising Chinese smartphone maker, which faced mounting obstacles over the past two years, invested about $500 million in India in 2015 and 2016 and plans to match the investment in the country over the next three to five years.
The company built a second factory with contract manufacurer Foxconn in the state of Andhra Pradesh. Xiaomi is looking at setting up a third plant and plans to create 20,000 jobs over the next three years, Lei told Bloomberg.
He said the push in India is designed to revive an aggressive international expansion launched in 2015 in a bid to curb its reliance on its home market. In addition to India, where it began to produce handsets in 2015, it also launched sales in Brazil, and is preparing a roll-out in Africa and the Middle East.
Xiaomi suffered a dismal 2016 with total smartphone shipments falling sharply, its market share down and its valuation plunging. It was once valued at $46 billion and was thought of as the world’s most valuable startup. In its domestic market in Q4, Xiaomi fell to fifth place from third as shipments declined 41 per cent and its share dropped to 7.4 per cent from 14.8 per cent in Q4 2015.
Adding to its woes, Hugo Barra, its global VP who joined from Google to lead the expansion, resigned in late January after three and a half years.
Xiaomi’s initial move into the Indian market in 2015 was met with a patent complaint from Ericsson. It announced its first Indian-made device, RedMi 2 Prime, in August 2015.
Total revenue is expected to surpass $15 billion this year, Lei said, noting sales of its suite of mobile apps and services reached $1 billion in 2016, although it reportedly failed to hit a $1 billion target for revenue from internet services.