Cheese pie explainer
Editor|Cheesepie explainer
For many years, Xiaomi, as a domestic mobile phone brand, has been developing very well in India, but according to an Indian media report on June 30, Xiaomi India, which has been gaining momentum, has recently carried out large-scale layoffs.
An employee who has worked for Xiaomi India for three years said in an interview that her branch had nearly 1,500 employees before the layoff, but now there are only about 1,000 employees left.
And just last week, 30 employees received a termination notice from Xiaomi India, and looking at the current situation, the company will continue its own downsizing plan in the coming months.
For large-scale layoffs, Xiaomi India also gave its own response, they said that Xiaomi India, like other companies, will adjust personnel according to the current market conditions and local policies, and will also optimize employees who cannot meet the needs of the company.
Why did Xiaomi, which has been mixing in the Indian market before, choose to lay off employees in the recent period? Does this have anything to do with India's policy?
①
●○Xiaomi layoffs○●
Although Xiaomi has been controversial in China in the past two years, it has been the big brother in the Indian smartphone field after entering the Indian market and gaining a foothold.
However, society has been developing, India's policies have been changing, Xiaomi, which was originally India's largest mobile phone brand, has begun to go downhill in 2022.
Since the beginning of last year, Xiaomi's market share in India has begun to shrink, and Samsung, which was originally located behind Xiaomi, has faintly shown signs of overtaking.
By the fourth quarter, Lei Jun completely lost his throne in the Indian mobile phone market and was taken the "throne" by South Korea's Samsung.
In the first quarter of this year, Xiaomi's market share in India fell again, and this second position was squeezed into the third position by the same domestic brand Vivo.
For the once leading enterprises in a region, this downward trend is very uncomfortable, according to the general people's thinking, the business has declined, the first thing to think about is how to improve their business.
But Xiaomi is different, originally although they occupied the largest market share in India, the number of employees has not been very large, less than 1500 people.
Obviously, Lei Jun has not thought about how to regain the Indian market, but has begun to reduce his share in the Indian market, and this layoff is a good example.
The reason for such a "prodded" performance is that Xiaomi has found itself that India's attitude towards Chinese companies has been relatively friendly before.
But in the past two years, Xiaomi wants to make money in India, it has become more and more difficult, this is not that India began to boycott companies from China, but Chinese companies want to make money in India, must completely listen to India, Xiaomi was fined 4.8 billion by the Indian government is a signal.
②
●○India's development strategy○●
India, as a country that was established at the same time as the new China and has a large population base, is to some extent quite similar to China.
Over the past few decades, China has become the world's factory with a large population base and low wages generated by relatively backward economic development, and you can see goods from China here no matter where you go in the world.
To some extent, the phrase "made in China" has also become a "buzzword" around the world, and China's economy has developed rapidly because it has become the world's factory, until it has become the second largest economy after the world's hegemonic United States.
This momentum of rapid development has made India, which has always considered itself not inferior to China, quite envious, and feels that it can do the same thing as China.
So a strategy called "made in India" was proposed, and it can be seen from the name that India wants to attract these factories to India and replace China as the next world factory while China's economy has developed and the factories of enterprises from various countries are moving to other countries.
However, this road is not so easy to follow, after all, in the eyes of international companies, India does not seem to be a qualified candidate, which can be seen from their choice to move their factories from China to Southeast Asia.
However, in India's view, this is not a difficult problem to solve, after all, compared with Southeast Asia, India is not without advantages.
First of all, the first point is the demographic advantage, companies in various countries choose to move factories to Southeast Asia, it is very important that the population of Southeast Asia is relatively large, and the economies of several countries are not very backward.
Such conditions ensure that after these enterprises move their factories here, the workers they can recruit are all cultural, after all, where the economy is good, people's education level will also rise.
At the same time, opening factories here will also facilitate these companies to open factories in Southeast Asia, which is very understandable, although these products are not local brands, but they are produced locally, which can make local consumers have a natural affinity for these products.
But these two points, India, as the most populous country and one of the world's top ten economies, is not weaker than Southeast Asia, and at the same time has an advantage that the entire Southeast Asian region does not have, that is, India is a whole.
Although for a long time in history, India was only a regional concept rather than a complete country, but since the British intervened in the Age of Exploration, India finally ushered in unification.
But for so many years since India became independent after World War II, the originally loose India has truly become a complete country, and a complete country is definitely more advantageous than a country composed of several countries in Southeast Asia.
India has also relied on its own advantages, has been issuing various policies, and Southeast Asia to compete for the throne of the next world factory, Xiaomi also entered India at this time, and gradually developed into India's largest mobile phone manufacturer.
③
●○ Targets from India ○●
However, some people may know that India has a characteristic that once it takes a leadership position in an organization, it will replace the members of the organization with Indians, which is also the unity of India.
In the past in the United States Silicon Valley, India's computer engineers because the company is very cheap and very popular, so a large number of Indians come to Silicon Valley to work, among which naturally there are outstanding people to become leaders, so slowly, Indians occupy Silicon Valley, and now one-third of Silicon Valley engineers are from India.
And after Sunak, who is of Indian origin, became the British prime minister, the proportion of Indians in the British cabinet also skyrocketed, and this is the case in other countries, especially for its own domestic foreign-funded enterprises.
Although Xiaomi is a Chinese enterprise, after so many years in India, the degree of localization of Xiaomi has been very deep.
If you look at the shareholding structure of Xiaomi India, Xiaomi India is completely an Indian industry, because its business in India has little to do with the domestic business, and even Lei Jun can't say anything there.
And most of the domestic mobile phone companies in India are the same as Xiaomi, and Xiaomi and India were previously fined 500 million yuan and 3.7 billion yuan respectively by the Indian government for tax evasion.
Not only Chinese companies, no matter which country, have suffered huge fines from India to varying degrees, and even many companies have not been able to stand the Indian government's choice and simply chose to close their business in India.
Not long ago, Xiaomi once again received a fine of 55.5 billion rupees from the Indian government, which is equivalent to about 4.8 billion yuan, or in the form of direct seizure.
Last year, Xiaomi's global net income was only 8.5 billion, which is equivalent to taking more than half of Xiaomi's annual global profits, and also six times Xiaomi's annual profits in India.
Rao Yileijun, who has actively responded to India's "Make in India" strategy and was even personally received by Prime Minister Modi, can't help but start to give up his industry in India.
And after experiencing this fine, whether Xiaomi India can still pay the starting wages to its employees has also become a problem, so layoffs have become an indispensable move.
④
●○Modi's ambition○●
The reason why India will target Xiaomi is not because of what country is different, but to pave the way for its subsequent regulations.
According to the new regulations issued by the Indian government, their purpose is to let all mobile phone manufacturers from China replace their executives with Indians.
We have also said before that the ability of the Indian Li Daitao is stiff, if the top management is replaced by Indians, in a few years, these Chinese companies in India will become Indian local enterprises controlled by Indians.
However, there are exceptions, just like South Korea's Samsung and the United States and Apple, the two companies, have not been targeted by the Indian government on such a large scale, from here it can be seen that at least in the field of smartphones, India is determined to control Chinese companies such as Xiaomi into its own hands.
In the second year of Xiaomi's entry into India, Xiaomi has been carrying out its own construction in India, not only investing in the construction of 7 projects, but also improving its supply chain in India, at that time the Indian government can be said to be responsive to Xiaomi.
Now it seems that Modi wants Xiaomi and other Chinese mobile phone manufacturers to complete their own industries in India, and then turn them into local manufacturers in India.
After that, let these local Indian manufacturers, and South Korea's Samsung, the United States' Apple form a three-legged pattern in India, so that these Chinese manufacturers in India for so many years of layout, undoubtedly become a wedding dress for others.
But the Indian government is also a little too good, so far, among the developing countries in the world, only China has established its own industrial chain with the help of enterprises from other countries, and it is not like India to use these inferior methods.
Although at present, Xiaomi's situation in India seems to be not optimistic, and even finally has a trend of completely withdrawing from the Indian market, but it is difficult for India to achieve its own goals, what do you think about this matter?
If you like my article, please click "follow", welcome to discuss with me in the comment area, may the world be peaceful.
Highlights from previous issues
The myth of the US Navy is shattered! The sudden fire of the USS Lincoln aircraft carrier exposed the fatal flaws of the Biden administration
The mainland has provided tens of billions of dollars in aid to other countries free of charge, but we refuse to provide assistance to one country.
After Blinken, the US Treasury Secretary will come to China again, and the Chinese side has said first: the United States must first change its attitude
END