India's largest smartphone maker Xiaomi has said it does not believe the current anti-China sentiment in some sections of the society in India will impact its long-term business in the country adding that it hopes to restart production at its factories soon.
The company has been the market leader in the smartphone category for close to three years now and had an over 30 per cent share in the first quarter of the year.
"I have seen some of those comments (anti-China) on social media but I do not think it will impact our business," said Xiaomi India managing director Manu Jain. "At this time emotions are high and people tend to look for something to blame. But as things settle down they will understand that the virus is not country-specific and they will not take it out on any specific country."
Chinese smartphone makers led by Xiaomi and followed by Vivo, Oppo, Realme, One Plus and Lenovo have made steady inroads in the domestic market in India and command more than half the share. Jain said Xiaomi is a multinational company that just happens to be headquartered in China and also played down concerns of data privacy.
"We are a multi-national company. The phones are manufactured here in India. The employees and workers are all Indians. This is an Indian company," he said. "I would also like to refute any concerns on data privacy. Our servers are all local and all the data stays in India. Nothing goes away."
The government tweaked FDI norms adding more curbs to investments coming from China is an indication of worsening trade relations between the neighbours. While it is likely to delay if not throttle money flowing in from across the border, Xiaomi said it was not dependent on its parent company.
"Beyond the first year, we have always been profitable. There has been no requirement for our parent company to put in money for our core business expansion and growth. So we are not impacted by this as we do not require any new investment," Jain said. "Even for investment in local startups (Xiaomi as an investor) it should not be a big challenge."
The lockdown in the wake of the coronavirus pandemic has brought economic activity to a standstill and Xiaomi admitted it would impact sales in the second quarter but said the recovery will be quick during the rest of the year.
"The third and fourth quarters could be as good as last year," Jain said. "This quarter will be bad. We have already lost 40 days and the ramp-up will also be slow in the next few weeks. But by all indications it will be a V-shaped recovery. Smartphone is a modern-day essential. During lockdown, we have also seen people use it more than ever before so it has become even more essential."
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