The Chinese smartphone companies are attempting to push into other emerging markets around the world in order to grow their businesses. Taking the example of Xiaomi, whilst this business saw smartphone shipments more than triple last year, the majority of these sales have been within China. Its attempts to sell devices in other smartphone developing markets, such as Brazil, India, Indonesia, Russia and Turkey have been hampered by difficulties, setbacks and frustrations. And now Foxconn, one of the more prominent Chinese handset manufacturers, is seeking to help its Chinese handset clients expand their sales in these areas.
How is Foxconn going to do this? By setting up local production plants in the market that its partner wishes to sell into. Foxconn may build a factory in India or Brazil in conjunction with Xiaomi; the Indian plant could be operational by the end of the year. The advantage of building the smartphone in the home market is that it does reduce some of the manufacturing costs but perhaps more importantly, it demonstrates a level of commitment beyond simply bringing crates of smartphones into that country to be sold. It may also stop the potential embarrassment of only selling a smartphone into a market for a very limited amount of time, before taking it off sale and substituting it with another – this is what Xiaomi did last year with the Mi3 device in the Indian market, which was on sale for just five weeks.
This plan also seems to provide a signal that Xiaomi are changing how they market their devices. Xiaomi have been fans of the flash sale, by announcing the availability of a limited number of a certain handset on their website, putting the devices up for sale and a few hours later, announcing to the world how successful a given sale was, because they sold 60,000 devices in five seconds. This form of “hunger marketing” has been broadly successful so far because Xiaomi have threaded the needle of maintaining customer interest. The trick is to keep the device attainable and desirable so that customers keep on trying to buy it, which means carefully managing the media and the number of devices being sold into that market. If Xiaomi are going to increase production of particular smartphones models within the markets they’re going to be sold into, this could mark the end of their hunger marketing, at least for these regions.
Of course, there are many more Chinese smartphone manufacturers than Xiaomi, and this is a pattern that Foxconn may be planning to duplicate across the industry. By combining Chinese design and technology with locally assembled products, for that all important “Made In Brazil” sticker (for the Brazilian market), Foxconn’s plans certainly appear perfectly sensible. Over to our readers; what do you make of Foxconn’s plans to expand in conjunction with their device partners? Is this a good thing for the industry? Will it help push towards the next billion smartphone users? Let us know in the comments below.