Undeterred by a campaign to boycott products from China, Vivo India on Thursday announced a Rs 7,500 crore investment plan to increase capacity at its Greater Noida factory to 120 million smartphones per annum, set up a design centre in the country and bump up its local sourcing from 15 to 40 per cent in the next one year.
Vivo is owned by Guangzhou-based BBK Electronics which is also the parent company for other popular smartphone brands in India such as Oppo, Oneplus, Realme and iQoo. Chinese smartphone makers have a vice like grip on India's growing smartphone market with over 80 per cent share between them. In the last few quarters, Vivo has been on a high, growing faster than the market and displacing Samsung as the second largest brand in India behind compatriot Xiaomi.
Chinese companies in India have come under the scanner in the last few months after a skirmish at the East Ladakh border between the armed forces of both countries led to the death of 20 Indian soldiers. The Indian government has since then taken a number of steps to reduce imports from China and also banned 59 Chinese applications in a clear indication that investments from across the border are no longer welcome. Vivo's fresh investment, however, shows they are not overly concerned with the geopolitical scenario.
"We wholeheartedly support our Prime Mnister Narendra Modi's vocal for local programme. All our phones are 100 per cent made in India but we want to take it up further. Our investment of Rs 7500 crore will enhance capacity at the Greater Noida factory from 30 million to 120 million making it one of the biggest smartphone factories in the country," said Nipun Marya, director for brand strategy, Vivo India.
"With this increase in capacity the number of workforce at the factory will increase to 50,000 Indians. Also, we are increasing local sourcing for our phones from the current 15 to 40 percent, that signifies a 200 percent jump in sourcing in the next one year. We will also set up an industrial design centre in India which will ensure that our phones are not only made in India but also designed in India. The first such phone will be rolled out in the market by 2021," he said.
The company also entered the high end segment of smartphones with two new products -- X50 and X50 pro, that are priced at Rs 35,000-38,000 and Rs 50,000 respectively. These are the most expensive phones by the company so far.
Vivo registered a growth of 40 per cent in smartphone shipments in the first quarter of 2020 compared to the same period in 2019 that gave it a market-share of 17 per cent. This came on the back of a 76 per cent growth in calendar year 2019.