Xiaomi Corp., the Beijing-based tech company, is expanding its local sourcing efforts in India in an effort to regain the market share it lost amid tightened regulatory scrutiny and growing competition. To do so, the company contracted Optiemus Electronics Ltd., an Indian supplier, to manufacture its bluetooth neckband earphones, marking the first time an Indian supplier has produced an audio product for Xiaomi. According to Muralikrishnan B, president of Xiaomi India, this move into new product categories is a milestone and demonstrates the company's commitment to "making in India."
Xiaomi was the leader in India's smartphone market for years, but a decline of over 20% in its shipments last year stemmed from allegations of money laundering and increased state scrutiny. Tough competition, component shortages, and a confusingly wide product portfolio contributed to the company ranking third in the final quarter of 2022. Samsung Electronics Co. has since surpassed Xiaomi to become the top contender, and has also reinforced its manufacturing efforts by building smartphones locally.
Xiaomi now aims to generate revenue through smart TVs, bluetooth earphones, and other accessories. Previously, Chinese companies like Xiaomi were hesitant to manufacture earphones and smartwatches in India, as it was easier to import from China, but as Indian state agencies' crackdown on Chinese firms intensified, they've rushed to explore manufacturing alliances with local companies to win New Delhi's favor.
Optiemus is set to become a global player and counts Apple Inc.'s Taiwanese supplier, Wistron Corp., as a strategic partner. This reflects Prime Minister Narendra Modi's goal to make India an export hub by supporting local firms such as Optiemus, Lava International Ltd., and Dixon Technologies India Ltd.
In October, Bloomberg News reported that Indian smartphone maker Lava is in advanced talks with China's Huaqin Technology Co. to create an electronics manufacturing venture that would aim to win contracts from US and Chinese customers. This shows that the steady rise of homegrown firms, capable of both addressing India's demands and exporting globally, has been recognised.