On May 29, Xiaomi India said it would sign a contract with Indian electronics manufacturer Optiemus Electronics Limited (hereinafter referred to as "OEL") to manufacture Bluetooth neck headphones, which is the first time an Indian supplier has produced wireless audio products for Xiaomi.。

According to analyst firm Canalys, global shipments of personal smart audio devices, including true wireless headsets (TWS), wireless headsets, and wireless neck hangers, were 86.72 million units in the first quarter of 2023, down 15% year-on-year for four consecutive quarters of decline.。Among them, TWS shipments were 61.58 million units, down 10% year-on-year.。In terms of market share, Apple and Samsung ranked first and second。Xiaomi remains in third place, despite a 31% year-over-year drop in shipments, maintaining market share with Redmi's new and shipment-level。

India as the world's second largest intelligent audio equipment market, its domestic top five suppliers are boAt, Boult, OPPO, pTron, Noise。It is worth noting that China's mobile phone manufacturer OPPO has also successfully ranked among India's TOP5。

Among them, the Indian local manufacturer boAt accounted for 4% of the global market in the first quarter, ranking fourth, and ranked first in the Indian local market, up to 35%, about twice the second place.。

In India, Xiaomi's smartphones, laptops, etc. are quite influential, but in terms of audio equipment, it is not yet competitive。It is reported that Xiaomi chose to cooperate in the production of smart audio devices in India, is betting on the growing demand for smart TVs, Bluetooth headsets and other accessories。

 

Fines exceed 5 billion! Xiaomi's market share is eroded.

 

In recent years, India's domestic business "conservatism" on the rise, the Indian government for foreign enterprises "eyeing."。Many foreign-funded enterprises, including Google and Amazon, have suffered more or less.。Chinese companies are no exception, and among Chinese companies, Xiaomi has lost the most。

In January 2022, millet was recovered in India 65 tax.3 crore tax (about 5.600 million yuan)。The Indian government alleges that Xiaomi India's remittance of royalties and licensing fees to Qualcomm and Xiaomi's Chinese parent company, which were not included in the transaction value of its imports, constituted tax evasion。

In April 2022, the Indian government seized its local bank account in India amounting to 55.5 billion rupees (about 4.8 billion yuan) on the grounds that it was suspected of illegally sending money to foreign entities by means of counterfeit payment of copyright fees.。Xiaomi immediately filed a complaint, but it was not until April 22 this year that the High Court of India rejected Xiaomi's appeal.。

These two events alone, Xiaomi lost about 5.4 billion yuan! You know, Xiaomi's adjusted net profit in 2022 is only 8.5 billion yuan, Xiaomi's loss this year is not heavy.。

In addition to fines, Xiaomi's market share in India is constantly being eroded。In the case of smartphones, according to Counterpoint, Xiaomi's smartphone shipments in India fell by more than 20% in 2022 due to local government scrutiny and allegations, and by the first quarter of 2023, it had only 16% market share, ranking third.。During this period, Samsung's market share has been improved, with 20% market share to sit on the throne of the first place。

 

To be on the safe side, foreign companies are turning to local companies.

Previously, Xiaomi and its related manufacturers were hesitant to produce headphones and smartwatches in India, as importing these products from China makes it easier to enter a market where demand is still budding.。But now in order to reduce the risk of facing scrutiny and accusations, manufacturers such as Xiaomi have turned to working with local companies to localize their businesses as much as possible。

But the Indian government has not only "sticks" for foreign companies, but also "honey dates."。Since 2020, the Indian government has introduced a series of production incentive plans for the manufacturing industry, referred to as the "PLI Plan," which aims to encourage domestic and foreign companies to develop manufacturing in India and create local jobs.。But the incentive plan has different standards for local and foreign companies.。For example, in the electronics manufacturing industry, foreign companies need to produce more than a certain value of electronic equipment to receive the Indian government's PLI award, but there is no such threshold for local Indian companies.。As a result, many foreign companies choose to cooperate with local companies, not only to reduce production costs, but also to apply for government incentives.。

It may be that under the dual influence of "sticks" and "honey dates," Xiaomi chose to cooperate with OEL to produce audio equipment。OEL is one of India's leading Electronic Manufacturing Services (EMS) providers。As early as 2021, the company will cooperate with Wistron Group in smartphones and laptops.。It is reported that the cooperation between the two companies is close to $200 million, mainly for the expansion of OEL electronic equipment manufacturing.。Optiemus said: "Wistron wants to expand its business in India, while Optiemus wants to take advantage of the government's incentive program in the electronics manufacturing industry, which is a win-win situation, so the cooperation between the two sides is justified."。"

OEL is also full of confidence in its cooperation with Wistron.。OEL expects the company to expand from a small business with 300 employees to a large business with more than 10,000 employees by 2025.。

Xiaomi India said in a statement that the audio equipment of the cooperation will be produced at the OEL factory in northern India, but the company did not say what specific products will be produced at the Indian factory, but the company claimed that it will "work on establishing more such cooperation for a wider category in our product line."。At the same time, the company reiterated its goal to increase the production of locally sourced parts by 50% by 2025.。

It is reported that at present, there are only two products of headphones sold locally by Xiaomi India branch, namely RedmiBuds 3 Lite and Redmi Earbuds 2C。

 

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