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Xiaomi India is hoping for faster progress on the issuance of visas to its executives from China, though there has been marked improvement on the front, company president Muralikrishnan B said. Speaking to ET’s Subhrojit Mallick, Muralikrishnan added that the worst is behind the smartphone brand, which is ramping up local sourcing of components, focussing on affordable 5G and expanding its offline presence to ensure that it doesn’t have to go through the turbulent phase of 2022. Edited excerpts: Is the worst behind Xiaomi now? There was a time when short-term challenges became predominant in our thinking, because they were existential questions.
That’s behind and now we are in a position to think far more long term — foundation building, strengthening relationships, strengthening the brand, talent development. Ultimately, the winners and losers will be dependent on the quality of talent that we have. It’s easy to hire, but it’s very tough to retain great talent, especially in today’s marketplace.
We have often been misunderstood. We have seen one tough year, and I hope that doesn’t come again. We have the right elements in place to ensure it doesn’t.
Advt How did the first phase of festive sales go? Volumes are down, but value is up for the industry. For year-to-date, volumes would be up 3-4%, but ASP (average selling price) is up almost 8% both for the industry and for us. Traditionally, you expect the festive season will account for 30-35% sales.
But the way we planned our annual operating plan was to front load volumes as much as possible. Event sales are always expensive. There is a price war.
Whereas, during business as usual (BAU), there is some breathing space. If you can do more during BAU, which is not about discounting, it is about efficiency and execution. So, we managed to do a fair degree of frontloading, so therefore the pressure during the festive season is a lot lesser for us.
How is the progress on manufacturing in India? There’s definitely progress. The way we see this is you broaden and deepen the ecosystem, which is to try and get more components, and within the components that you have, increase the volume of local sourcing. Obviously, the basic components like the battery, charger, cables, mechanics and some camera modules are sourced locally.
We started sourcing vibrator modules. We are working on a few other components like fingerprint sensors, display, wherever possible and it makes commercial sense, we will continue doing this. How much has local value addition increased? Right now, of the non-semiconductor BoM (bill of materials), we probably source about 30-35% of components locally.
And we hope that upwards of 50% in the next couple of years. Previously, it would have been closer to 25%. So, it will slowly keep growing.
Advt Is it now easier to secure visas for executives from your headquarters? Gradually. I’m hoping there is faster progress that can be made, but definitely people are open, they are receptive, and I’m hoping things will continue to improve. What is Xiaomi’s vision for the next 10 years? In the last ten years, some important milestones were accomplished — 250 million smartphones sold, 350 million devices sold across categories.
And we said, how do you take this to the next level? We set out a new vision called 10 years of tomorrow where we said we want to get to 700 million incremental devices across categories, in the next ten years. And there are multiple components. There is a lot of magic to be created with innovation.
Ultimately, we are a technology company, so we expect more of that. In fact, demand more of that. We want to do a lot more magic in terms of relationships and partnerships because we cannot do this alone.
We are not vertically integrated like some of the others are. There’s also more magic coming in terms of the experience, especially with the connected ecosystem. Trust me, that game is just getting started.
You can also do more magic in terms of impact, and that’s why the localisation of the supply chain. Ten years down the line, has the tag of a Chinese brand finally left Xiaomi? I think about this very differently. We are actually a brand which is global in outlook, Indian in spirit.
Ten years down the line, the fundamental ethos, the thought process of Xiaomi India is very much Indian — Indian leadership, Indian manufacturing partners, Indian distribution — that’s the way we think, act, and work. The fact that the company originates from China is a fact, and rightfully so. But people understand that we are Indian in spirit.
What is the status of the investigation by the Enforcement Directorate over alleged violation of foreign exchange rules? The case continues to be in courts. We have been resolute and always been compliant. We will continue being compliant.
The courts will hear us out and do justice. How are you navigating the changing landscape of Indian manufacturers tying up with global original design makers for design capabilities? Typically, what we are seeing is Indian manufacturers are bringing foreign partners which enables technology transfer, but we don’t manufacture ourselves. Therefore, it is slightly less relevant to us.
I’m looking at that space to keep track of what’s happening, but it doesn’t have any direct implication for us. Will you be designing your phones in India? We have not considered that angle, to be honest. Eventually, possibly, yes, but not at this point of time.
We should keep all options open. As a business, you will evolve with time. We are only 10 years old.
Sometimes people forget that fact. By Subhrojit Mallick , ET Bureau Published On Oct 22, 2024 at 07:50 AM IST Telegram Facebook Copy Link Be the first one to comment. Comment Now COMMENTS Comment Now Read Comment (1) All Comments By commenting, you agree to the Prohibited Content Policy Post By commenting, you agree to the Prohibited Content Policy Post Find this Comment Offensive? Choose your reason below and click on the submit button.
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