Beijing-based consumer electronics company Xiaomi has started to produce smartphones in Vietnam, Nikkei reported on July 5. With a growing population and economy, Vietnam is expected to see an increase in demand. Xiaomi hopes to establish a foothold in the market to catch up with Samsung, which ranks first in the country’s smartphone sales. Xiaomi products are produced by a company in Thai Nguyen, a northern province of Vietnam. Besides this country, Xiaomi will also export to Southeast Asian markets such as Malaysia and Thailand.
Several local media outlets reported that Xiaomi had entrusted production to DBG Technology, a Chinese foundry company. The whole factory covers an area of about 200,000 square meters, with an investment of about $80 million. Besides smartphones, it will also produce various parts such as data transmission equipment and circuit substrates.
Xiaomi previously mainly produced smartphones in China and India. However, after the COVID-19 pandemic struck the world in 2020, supply chains suffered significantly, having a strong impact on sales. In order to disperse its production bases, it decided to carry out manufacturing in northern Vietnam, which is easy to transfer from China.
DBG Technology’s factory is located in the same industrial park as Samsung’s, which makes it possible to purchase parts from some suppliers that Samsung has spent more than 10 years gathering. Samsung entered Vietnam in 2009 and two factories in the north employ about 100,000 employees, undertaking about 50% of the company’s global smartphone production.
According to industry insiders, even smartphone companies that started late “can purchase parts from Vietnam, where the production cost is lower than that of China, to further reduce costs.” Launching smartphone production in Vietnam, which has a population of about 100 million, is expected to promote the brand image.
It has been reported that a Xiaomi smartphone store was found in a sales agency in Hanoi, Vietnam. The average price is 6 million to 8 million VND ($257 – $342), and the lowest price model is 2.49 million VND. The person in charge said that “the function difference of its latest models (compared with competing models such as Samsung) is very small. These models are popular because they are more affordable.”