Recently, the news of Foxconn's departure from India has been making a lot of noise.
Foxconn's $19.5 billion factory construction operation, which was scheduled to be promoted with Indian mining company Vedanta, was halted by Foxconn without warning.
The reason for leaving is said to be that India previously said that the factory construction subsidy was suddenly canceled, and Foxconn did not stop doing two and ran away directly.
India's business environment, everyone understands, "India makes money Indian flowers, each wants to take home", foreign companies as pigs, is India's "fine tradition".
There are far more than one Foxconn in foreign companies in India who are slaughtered and run, but also Harley-Davidson, Ford Motors, General Motors, Glory...
The company that has not yet run away, there is a particularly concerned one, "Brother Jun, everyone else has run, when are you running?" ”
In mid-June, Indian regulators announced the confiscation of $680 million (about 4.8 billion yuan) from Xiaomi India on the grounds of "illegal transfer of funds to foreign entities."
This is not the first time Xiaomi has been slaughtered, in January 2022, the Indian Tax Intelligence Agency asked Xiaomi India to pay an additional $76 million (about 558 million yuan) in taxes on the grounds of tax evasion and false accounts.
Just a few months later, the "third brother" once again went on the move, seizing 725 million US dollars (about 5 billion yuan) of assets belonging to Xiaomi Technology India Pte Ltd. on the grounds of foreign exchange remittance violations.
Endlessly slaughtered, Xiaomi, which entered the Indian market with great enthusiasm, must not have imagined the current situation.
In 2010, Nokia collapsed in the field of smart phones, vacating its global share, the high-end was dominated by Apple, and the low-end was Samsung's world.
However, Chinese mobile phone brands take advantage of the local supply chain and excellent cost performance, not only defeating Samsung's market in China, but also continue to enter overseas.
In 2014, Modi was elected prime minister of India, determined to develop the manufacturing industry and attract foreign companies to India, hoping to exchange the market for technology.
In this context, Xiaomi, OPPO, vivo and other Chinese mobile phone brands have entered India, of which Xiaomi is the most valued by Modi and personally received Lei Jun.
On July 15, 2014, Xiaomi mobile phones were sold on Indian e-commerce Flipkart, with a price of 13999 rupees (about 1100 yuan) of Xiaomi 3, which was sold out in half an hour.
Smartphones led by the Indian local brand Micromax are just feature phones with smartphone skins because of technical problems.
The price of Xiaomi Mi 3, although it is more expensive than Indian mobile phones, but smart phones are dimensionality reduction blows to feature phones.
Xiaomi's mobile phones sold in India are generally priced at 5,000 to 20,000 rupees (about 470 to 1,880 yuan).
Even the lowest-priced Redmi phone has 16GB of memory and a camera, which other brands of the same price do not have.
Cost performance is the foundation of Xiaomi's life in China, and it is still killing all sides in India.
Xiaomi has good intentions for the Indian market, they not only copy China's marketing strategy, but also constantly advertise "Made in India".
In 2015, at the Xiaomi 4i conference, Xiaomi Global Vice President Hugo. Barra said that the "i" of the Xiaomi Mi 4i is the "i" of "India".
Xiaomi fully grasps the Indian mentality, and they put the label "made in India" on the back of each phone case.
Xiaomi's operation has gained a large number of fanatical Indian "rice noodles", and the share of Xiaomi mobile phones in India has soared like a rocket.
In 2017, Xiaomi's share in India was about 13.1%, and a year later it exceeded 30%, directly surpassing Samsung and becoming India's best-selling mobile phone brand.
In 2019, in order to commemorate the sales of Xiaomi mobile phones in India exceeding 10 million in a single season, the Xiaomi India team used 10,000 light bulbs to create a Xiaomi LOGO, which also set a Guinness World Record.
And Xiaomi's front and back foot into India's blue-green factory, also adopted a similar strategy, using cost-effectiveness, punching the brand, kicking Apple Samsung.
Even if affected by the epidemic, in 2020 and 2021, Xiaomi's share in India still exceeded 20%, and Bluegreen Factory and Redmi also maintained a double-digit share.
Chinese mobile phone manufacturers can be described as infinite scenery in India, but Indian Prime Minister Modi's face has gradually become gloomy.
According to Modi's vision, the introduction of Chinese mobile phone companies is not only to learn advanced technology, but also to produce a "catfish effect" and force the progress of local Indian brands.
But Modi did not expect that for so many years, Indian local brands not only did not progress, but went in the direction of others without looking back.
Since Indian local brands do not compete with themselves, then Modi Laoxian must exert "magic power" and let Chinese companies also "not compete".
Moreover, according to India's "business tradition", foreign companies in India are pigs to be slaughtered, and Nokia, Ericsson, and Samsung have all been slaughtered before, and now it is the turn of Chinese companies.
In 2016, India increased the tariff on mobile phone parts from 5% to 20%, and discerning people can see who this is aimed at.
In April 2020, India required investors from countries with "land borders" with India to be approved by the government, doesn't this mean a large eastern country?
In October 2021, India's Ministry of Telecom simply named Vivo, OPPO, Xiaomi, and OnePlus to provide data and details of the phones and components.
Coupled with this year's sanctions, India has entered the stage of open robbery for Chinese companies, so these companies have no countermeasures?
Xiaomi India recently announced an "explosive" decision, that is, a large-scale layoff of Indian employees, from the original 1,500 layoffs to the current 1,000.
This is Xiaomi's response, if you me, I will fire people, anyway, it is your employees in India.
Xiaomi India has more than 1,000 employees at its headquarters in Bangalore and more than 30,000 employees in five regions in India.
Xiaomi has built a large number of factories in India, and in 2019 alone, Xiaomi built 7 factories in India.
Xiaomi has also invested in a number of Indian companies, including KrazyBee, an online microloan platform, and Cashify, a second-hand phone recycling and repair company.
This means that Xiaomi has not only created a large number of jobs in India, but also cultivated a large-scale industrial chain.
Once Xiaomi has any trouble, these jobs and industrial chains will all be affected, and India itself will never be safe.
On the other hand, although it has been slaughtered the most, Xiaomi is still unwilling to withdraw from the Indian market.
Xiaomi is not Foxconn, Foxconn's chip industry in India is just getting started, and it can be given up without scruples, but Xiaomi cannot.
In this country, Xiaomi has been working hard for nearly a decade, and the Indian market is one of the most important sources of overseas income for Xiaomi.
In 2022, Xiaomi's overseas market revenue was 137.8 billion yuan, accounting for 49.2% of the group's total revenue, of which 29.4 million units were shipped in the Indian market, accounting for about 20% of Xiaomi's global shipments.
If you quit easily, you will not only lose ten years of hard work, but also lose the most important source of overseas income.
The point is that the huge sunk cost, as well as the aftercare cost of supply chain disruption, is by no means what Xiaomi can bear, the lesser of two evils, Xiaomi can only choose to stay.
The future of millet in India depends on what India itself will do, whether it chooses to continue to cut leeks or gradually stop.
With the consistent urine nature of the "third brother", they will most likely choose to continue cutting leeks, so the fate of millet in India can only be blessed.
Resources:
Brain-burning finance: Foxconn's "Indian retreat", what about Xiaomi?
Economic Observer: Fighting the Indian market, China's mobile phone army retreats or defends?
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Editor: Chen Zhanxiang