Hindi Chini Mobile Mobile

Neeraj Chopra, Managing Director, Joltme Electrovision “We are emerging as new market players” India

The signs of a shift are everywhere. China, the world’s mobile phone manufacturing hub, is swiftly losing ground to India. With complete scrutinization in the e-commerce field, it has been observed by that few of the leading mobile companies have shifted their base in India.

Firstly Samsung: Not long ago, Samsung built a new mobile phone manufacturing plant in Noida, India. It’s Samsung’s second factory in the country, and is slated to become the world’s largest such plant, producing an enormous 120 Billion mobiles per year.

In fact, if we see the stats, Samsung has invested quite a lot in the Chinese Manufacturing market and now they are shifting their base towards India. Samsung strategy has been clear but we have analysed that the economic growth of China has been stagnant for some time.

Apple, Foxconn, and a host of other domestic mobile phone manufacturers have also invested in India-based manufacturing over the past couple of years. For example, last year, Apple began manufacturing some iPhones in India, and approached the Indian government about tax breaks to facilitate its suppliers manufacturing phones there.

The irony of the global players is not that withstanding but one more blow has surfaced in Chinese Market. We all aware that China has horde of local mobile manufacturing like Vivo, Oppo, Xiaomi. Virtually speaking all the local manufacturers are shifting their base in India.

Xiaomi, leading mobile manufacturers have pinned two factories in India and now envisioning the third one.

Another reason: Flexibility in Indian policies:

India’s government has eased the local production through a variety of policies, including waving off the import duties on critical parts to make direct investment in India more financially compelling to manufacturers.

And with costs in China being driven continuously upward graph by rising living standards, another factor is that demand for the smartphones slows, Chinese phone makers are finding themselves in a position where they need to make phones more cheaply even as all of their costs are rising.

China’s manufacturing industry worries

A mobile phone manufacturing units will shift away from China could cause serious problems for the Chinese economy. The manufacturing industry is an important part of the country’s economic power. Both the nations are hugely populous. Without the stability provided by the manufacturing industry, China’s economy could experience a massive capital outflow, which can have diverse impact on the Chinese economy.
If we look at the global prospective, India lack skilled labours, but the movement of Chinese phone manufacturers to India will provide an opportunity for the country to both attract and train more skilled workers, speeding the development of the entire Indian mobile phone industry, including related sectors like R&D.

We have seen this effect before in China. This was with the Foxconn, a well established and have a massive presence in Zhengzhou; an entire vertical mobile phone supply chain took shape in the region. As mobile phone manufacturing becomes more established in India, the country will have a chance to become a more influential player in the global mobile phone industry as related businesses spring up around manufacturing hubs.

The current global climate, with America shouting about the return of domestic manufacturing and firms like Foxconn, Apple, and Samsung moving manufacturing to India, is like warning to China.

Problems growing with no obvious solution

With the biggest slogan in Indian Government which has been touting as “make in India” plan since 2014, with the ultimate goal of making India the center of the global manufacturing industry. That strategy appears to be gradually coming to fruition

Smartphones market is plagued

India’s smartphone market has enormous varieties of low cost mobile phones, which are from the local domestic stallions like Lava, Intex, and Micromax, as well as Chinese firms like Xiaomi, Oppo, Lenovo, and Vivo. In the past, the Indian firms had trouble competing with Chinese companies on quality because they lacked access to a strong local supply chain, and many local factories like Micromax’s depended on Shenzhen subcontractors to meet their numbers. But as India’s domestic manufacturing industry grows, that’s becoming less true.

As far as concerned about Samsung and Apple, the Chinese consumer market remains crucially important. But their changes in supply chain strategy pose a definite risk to the Chinese manufacturing industry.

Finding a solution may be difficult. While America’s manufacturing industry dropped off naturally along with a corresponding boom in technology, research, and R&D, China’s manufacturing industry may not be as easily replaced, as the economic sectors needed to replace it are still developing.

And the mobile phone industry is but one signal is that Chinese manufacturing moving abroad. Electronics maker are also bid adieu into China and they are hitting Indian shores. Even domestic manufacturers are moving more of their operations abroad in a bid to become more globally relevant and competitive.

Indeed, Hindi Chini Bhai Bhai is repeating the history.

Are we providing ground for the new market players and appearing as the antidote to China