The Chinese are arguing about this decision of Xiaomi.
GlobalTimes reported that Chinese smartphone maker Xiaomi recently delivered the first batch of products made in Vietnam. This is a clear attempt to increase delivery efficiency in Southeast Asian markets and reduce logistics costs, the company said.
“Delivery costs in Southeast Asian markets have increased due to the COVID-19 pandemic, and logistics costs have also increased in recent years. To address these issues, Xiaomi has partnered with partners partner to realize the localization of production,” a Xiaomi spokesman said.
Xiaomi handsets made in Vietnam will be distributed domestically as well as to other Southeast Asian countries, including Malaysia and Thailand.
Citing domestic media sources, Xiaomi is working with Chinese electronics manufacturer DBG Technology, which operates a 200,000-square-meter factory in Thai Nguyen, Vietnam.
Ma Jihua, a veteran technology analyst, told Global Times that setting up production lines in Vietnam or other Southeast Asian markets could improve both the cost and delivery efficiency of the Chinese handset maker.
“ASEAN has become China’s largest trading partner, and increasingly close industrial cooperation between China and ASEAN will be a long-term trend for many industries, including smartphones,” Ma said.
Several other labor-intensive industries have also started moving to Vietnam and ASEAN countries such as footwear, clothing and furniture manufacturers.
Several electronic product manufacturers have also noticed this trend in recent years, including top Chinese home appliance maker TCL and display panel maker BOE. One of China’s leading solar panel manufacturers, Trina Solar, also set up a production line in Vietnam in early 2017.
Currently, “Xiaomi makes phones in Vietnam” is becoming a hot topic on Chinese technology forums. There are mixed opinions on this issue. A person named Xu Shilin expressed: “We have lost a lot of production lines to Apple, Samsung and now Xiaomi. Even domestic brands are looking to move production abroad. It’s worrisome!”
There are also positive comments. “It’s nonsense to blame Xiaomi. Let’s look at it positively. If they move production to another country, our home brand will go global. Setting up a factory in Vietnam is an important step to help Xiaomi can compete with Apple and Samsung.”
Currently, Samsung is also producing about half of its output in Vietnam. In February this year, the Korean company continued to pour another 920 million USD to invest in this market to support the production of circuit boards and camera modules.