NEW DELHI: Xiaomi is set to nearly triple the number of jobs it has created in India by 2020 as the Chinese smartphone maker expands its presence in a market where the company has emerged as the second biggest in a scant two years.
“To date, we have created more than 7,500 jobs in India and we expect to create a total of 20,000 jobs in three years,” founder Lei Jun said at The Economic Times Global Business Summit on Monday. India is the second-largest contributor to Xiaomi’s global revenue after China, having successfully leveraged its strategy of high-spec affordable phones sold online.
The Beijing-headquartered Xiaomi, which was set up seven years ago almost to the day, is set to launch a new artificial intelligence product in the next six months. That’s a result of Internet-based innovation, a model that can work in emerging economies like India as well, Lei said.
“We became one of the earliest companies to apply the Internet-plus model to our business with innovative technologies, great products and high-efficiency operations,” said Lei, 47.
Xiaomi’s surge has turned Lei into the 12th richest person in China with a net worth of $6.8 billion, according to Forbes. Back in 2014, it became the most-valued tech startup in the world at more than $45 billion. By then it was No. 1 in China and No. 3 in the world.
With the highest cost-to-value ratio, Xiaomi disrupted the smartphone industry in China. “Advances in internet technology and the ecommerce approach helped us to remove middlemen and their profit margins, so we can price our products close to cost and help to reduce prices for consumers,” Lei said.
He added that as mobile networks, especially 4G, expand in India, consumers will have easier access to the Internet, which will in turn allow them to have access to information far more transparently and they would seek out more value for the products they purchase.
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“This is the time for companies to use the Internetplus model to become disruptors in India. Whichever company is able to bring the best products at the most affordable prices, will win the market,” he said, giving the example of his own company, which amassed revenue of more than $1 billion last year in India.
Lei met Prime Minister Narendra Modi earlier in the day and explained the concept of the Internetplus model, and how Indian companies could benefit from it. He said any move by companies in emerging markets to “cut corners” and not focus on quality in a bid to hasten the process would cause irreparable damage to their brands.
Lei is banking on India as a growth model for international markets including Russia, Indonesia, Vietnam and Ukraine, where the company has presence but wants to scale up to get into the upper echelons. Xiaomi is aiming for global revenue of $15 billion by this year end. It did not disclose the 2016 revenue figures.
Besides the online growth challenge, Xiaomi feels resolving the issue of insufficient supplies with respect to demand will be critical for success in India and overseas. Phones are also sold in brick-and-mortar stores.
Xiaomi, which started making phones locally with Foxconn in Andhra Pradesh in 2015, recently ramped up capacity to one phone per second and now locally makes 95% of phones it sells in India. The company will expand manufacturing in India to help meet high local demand and may even look at exports from here.