A recent article in Economic Times on the theme ‘Boycott China’ evaluated what the impact of the movement has had on Xiaomi, the Chinese smartphone manufacturer. Manu Kumar Jain, the MD of Xiaomi India, uses the article to express how the protests against the company were actually done by “fringe elements” and were the result of mere “mob mentality” that wouldn’t have any real impact on the company’s business. In the possible PR piece, he also explains how Xiaomi is actually “more Indian than Indian handset companies”.
For us, this was the starting point of what would be an investigation into ascertaining the truth behind the various claims that were made in the article. Here are our findings:
Quote: “Xiaomi India sourced, on average, 65% of its components locally.”
Our Findings: In essence the statement is true, but what is conveniently left out is the fact that these local suppliers could very well be Chinese companies that have manufacturing or assembling units in India. In April 2018, Xiaomi invited its suppliers to set up bases in India and even highlighted Uttar Pradesh and Andhra Pradesh as potential locations for the same. Subsequently, Holitech Technology, a key component supplier for Xiaomi set up shop in Tirupati. Holitech as per Bloomberg is a fully-owned Chinese company. So, the claim of procuring 65% of its components locally could very well be from such Chinese suppliers based in India.
Quote: “Xiaomi has a completely local leadership.”
Our Findings: The ‘About’ page on Mi.com lists a number of individuals that form the leadership team of the company. Interestingly, Manu Jain is the only Indian name on the list with 16 other Chinese nationals. It therefore remains to be seen in what context the claims in the statement were made.
Update: The mobile website of Xiaomi has details of the Indian leadership team of the company. This is to clearly imply that the company in India is fully run by Indians. In general, the leadership team of any leading company is answerable to its Board of Directors, which in Xiaomi’s case is largely made up of Chinese nationals.
Quote: “100% of the data of Indian users stays in India”
The Chinese link
Recently Forbes published an exclusive where Gabi Cirlig, an independent cyber security researcher found ‘that his Redmi Note 8 smartphone was watching much of what he was doing on the phone. That data was then being sent to remote servers hosted by another Chinese tech giant, Alibaba, which were ostensibly rented by Xiaomi.’
It is also worth noting that Chinese giant Alibaba is an investor in the company and it also lists Wong Shun Tak, as an independent non-executive Director in Xiaomi. Wong previously served as vice president of finance and financial controller of Alibaba Group Holding Ltd from August 2007 to September 2011. He has also acted as the chairman of the Group Financial Control Committee of Alibaba Group.
Our research indicates that the claims made by the company, keeping in mind the rising anti-China sentiment in India, have more to do with clever wordplay and mere optics. The company’s actions remind us of the various dubious tactics China uses as a country to deceive people and divert attention. It also raises serious doubts about the true intentions of a smartphone manufacturer that has its roots in China but still feels the need to portray itself as an Indian company.