In Short:
Xiaomi India aims to expedite visa issuance for its Chinese executives, indicating improved conditions. President Muralikrishnan B believes the toughest times are over, focusing on local sourcing and affordable 5G. Xiaomi targets sourcing over 50% of components locally in two years. The company plans to sell 700 million devices in the next decade while emphasizing its global outlook and Indian spirit.
Xiaomi India is seeking expedited progress regarding the visa issuance for its executives from China, even as notable improvements have been observed in this area, according to company president Muralikrishnan B. In a discussion with ET’s Subhrojit Mallick, Muralikrishnan expressed optimism that the challenges that plagued the smartphone brand have largely been overcome. He emphasized the company’s efforts to enhance local sourcing of components, focus on affordable 5G offerings, and expand its offline presence to avoid the difficulties experienced in 2022.
Current Challenges Behind Xiaomi
Reflecting on previous adversities, Muralikrishnan stated, “There was a time when short-term challenges became predominant in our thinking, because they were existential questions. That’s behind us, and now we are in a position to think far more long term — focusing on foundation building, strengthening relationships, bolstering the brand, and developing talent.” He further highlighted the importance of quality talent, noting, “It’s easy to hire, but it’s very tough to retain great talent, especially in today’s marketplace.”
Performance During Festive Sales
When discussing the recent festive sales period, Muralikrishnan noted that while volumes were down, overall value had increased for the industry. “For year-to-date, volumes would be up 3-4%, but the average selling price (ASP) is up almost 8%, both for the industry and for us.” He explained that traditional expectations placed festive sales at 30-35% of total sales, but Xiaomi aimed to front-load volumes to alleviate pressure during the season.
Advancements in Local Manufacturing
Muralikrishnan confirmed that improvements are underway in manufacturing within India, stating, “We broaden and deepen the ecosystem to enhance local sourcing of components.” Currently, Xiaomi sources around 30-35% of its non-semiconductor Bill of Materials (BoM) locally, with aspirations to increase this figure to over 50% within the next few years.
Visa Acquisition Progress
The company is witnessing gradual progress in securing visas for its executive team, with Muralikrishnan expressing hope for further enhancements in this area.
Xiaomi’s Vision for the Future
Looking ahead, Muralikrishnan revealed Xiaomi’s ambitious goal for the next decade, aiming to sell an additional 700 million devices across various categories. “We expect innovation to drive our future growth, and we want to cultivate more partnerships as we are not vertically integrated like some others in the field.” He highlighted the significance of building relationships and creating impactful experiences within the connected ecosystem.
Perception of Xiaomi as a Global Brand
Muralikrishnan articulated a nuanced view on the brand’s identity, stating, “We are a brand with a global outlook and Indian spirit. Our ethos is fundamentally Indian, emphasized through our leadership, manufacturing partnerships, and distribution strategies.” While acknowledging that Xiaomi originates from China, he reaffirmed that the company operates with an Indian perspective.
Ongoing Investigations
Regarding the ongoing investigation by the Enforcement Directorate related to alleged foreign exchange violations, Muralikrishnan affirmed, “The case continues to be in courts. We have always been compliant and will continue to uphold compliance as we await justice.”
Collaboration with Indian Manufacturers
In terms of collaboration, he noted that while Indian manufacturers are increasingly partnering with global original design makers for technology transfer, Xiaomi’s model does not involve direct manufacturing. Therefore, these developments hold limited direct relevance for Xiaomi at present.
Design Capabilities in India
Lastly, when questioned about the potential for designing phones in India, Muralikrishnan stated, “We have not considered that angle at this point, but we are open to all options as our business continues to evolve.”
