Image Source: Visual China

Beijing, July 5 (TMTPOST) – Chinese consumer electronic gadget maker Xiaomi has started making smartphones in Vietnam by engaging its business partner.    

Xiaomi's business partner DBG Technology (300735.SZ), rather than Xiaomi itself, is providing electronics manufacturing service (EMS) for producing Xiaomi smartphones in Vietnam.

Xiaomi has confirmed the news report to Hongxing Zibenju but clarified that the company is not transferring its entire smartphone production to Vietnam. According to Xiaomi, Vietnam is only a part of the company’s business operation in southeastern Asia.

“Our overseas factories are all operated by our business partners. Xiaomi does not manage them or have ownership over them,” an insider at Xiaomi said. “In India, our factories are operated by Foxconn and BYD. In Hong Kong, we have DBG Technology.”

The factory reportedly covers an area of around 200,000 square meters with an invesment of US$80 million. Besides smartphones, the factory will also produce components such as data transfer equipment and circuit boards. The factory will be supplying the local market in Vietnam as well as other markets in southeastern Asia, including Malaysia and Thailand.

Analysts said that manufacturing smartphones locally can reduce shipping time and costs associated with transportation. Xiaomi told Hongxing Zibenju that shipment costs have risen in southeastern Asia due to the impact of Covid-19 pandemic and the rising cost from exports and logistics. That is why Xiaomi is working with its manufacturing partners to reduce costs from logistics and focusing on producing locally.

Statistics from market research firm Canalys show that Xiaomi rose to the No. 2 position in Vietnam as a smartphone-making brand, surpassing Oppo, Apple and Vivo.

The report from Canalys shows that Xiaomi has been able to maintain positive growth compared with the same period in 2021. Xiaomi is the fastest growing company on the chart made by Canalys. The company now accounts for 22% of the market in Vietnam.