Back
home in China, Lei Jun is known as a startup wizard who has sold many
businesses after building them from scratch. But, the ambitious
45-year-old's biggest claim to fame is Xiaomi, China's top phone maker
and currently the world's most valuable tech startup, pegged at $46
billion by investors. Jun, founder and CEO of Xiaomi, has plans to set
up a manufacturing plant in India and also make the company the largest
smartphone maker in the country in the next three years. However, he
doesn't have any interest in the Nokia plant. He also wants to invest in
startups since he believes India's tech startup space will soon match
that of China's in terms of scale. Excerpts from an interview:
You have invested in many Chinese companies. Do you plan to invest in Indian startups too?
We are seriously evaluating to invest here. The key objective of our investments is how it would help Xiaomi's long-term strategic business. The startups should be helping us in smart hardware, mobile internet, content, and gaming. There are no limits to investment amounts. In the last five years, we have invested in 100 companies in China. Most of them are eco-system companies that have built systems that we use in our phones. In three years, you would probably see the same here as we start investing. It will help bridge the gap between the phones we sell here and those that we sell in China.
Are you looking at manufacturing here? Are you planning to buy Nokia's Chennai plant?
We do want to set up a manufacturing facility here. It will take time to implement since it's a complicated process. We have a team, which is evaluating possibilities here. However, we have no plans to buy the Nokia plant given the legal issues.
How important is India in Xiaomi's long-term strategy?
For us, India is the most important market after China. Last year, out of the 65 million phones we sold, 3-4 million were sold in international markets. Rest was sold in China. In the long term, we expect our international business to be half of our total business.
The tech ecosystem in China has produced world-beating startups. What has pushed the growth there and what can India learn from it?
The Chinese government is very encouraging to entrepreneurs. We have a very sophisticated financing system, including the ecosystem surrounding angel investors, VCs, PEs and IPO regulations. Mobile internet innovations in China are more advanced than those in the US. And, all this happened in last one or two years. Last year, two companies that launched products are being valued at $1 billion and $3.5 billion, respectively. In three years, the same thing is going to happen in India. Mobile internet is not being driven by western countries like the US. All the action is here.
Does the air pollution in Delhi remind you of home?
The air here is beautiful. India must learn from rapidly growing economies like China about importance of the environment. When you start living in smog you will understand. Only in the last two years, China has realized the impact of pollution. It can't be reversed now. When the American media told us 20 years ago to pay attention to pollution, we didn't listen. These days, we celebrate when we see blue skies in Beijing because two-third of our time is spent in smog.
How do you keep costs low?
In the Indian market, you only have Apple or Samsung that are very expensive or a bunch of very low-cost phones. We don't profit from selling hardware. We are building mobile internet services. This year, our revenues from mobile internet services in China will be around $1 billion. We price a device very close to BOM (built of material) cost. It took us around two years to get to the number one position in the Chinese market, which is the biggest yet most competitive market in the world. Last year, we were in the list of top five phone makers in the world in terms of phone sales. In three to five years, we will work very hard to become number one in the Indian market.
You have invested in many Chinese companies. Do you plan to invest in Indian startups too?
We are seriously evaluating to invest here. The key objective of our investments is how it would help Xiaomi's long-term strategic business. The startups should be helping us in smart hardware, mobile internet, content, and gaming. There are no limits to investment amounts. In the last five years, we have invested in 100 companies in China. Most of them are eco-system companies that have built systems that we use in our phones. In three years, you would probably see the same here as we start investing. It will help bridge the gap between the phones we sell here and those that we sell in China.
Are you looking at manufacturing here? Are you planning to buy Nokia's Chennai plant?
We do want to set up a manufacturing facility here. It will take time to implement since it's a complicated process. We have a team, which is evaluating possibilities here. However, we have no plans to buy the Nokia plant given the legal issues.
How important is India in Xiaomi's long-term strategy?
For us, India is the most important market after China. Last year, out of the 65 million phones we sold, 3-4 million were sold in international markets. Rest was sold in China. In the long term, we expect our international business to be half of our total business.
The tech ecosystem in China has produced world-beating startups. What has pushed the growth there and what can India learn from it?
The Chinese government is very encouraging to entrepreneurs. We have a very sophisticated financing system, including the ecosystem surrounding angel investors, VCs, PEs and IPO regulations. Mobile internet innovations in China are more advanced than those in the US. And, all this happened in last one or two years. Last year, two companies that launched products are being valued at $1 billion and $3.5 billion, respectively. In three years, the same thing is going to happen in India. Mobile internet is not being driven by western countries like the US. All the action is here.
Does the air pollution in Delhi remind you of home?
The air here is beautiful. India must learn from rapidly growing economies like China about importance of the environment. When you start living in smog you will understand. Only in the last two years, China has realized the impact of pollution. It can't be reversed now. When the American media told us 20 years ago to pay attention to pollution, we didn't listen. These days, we celebrate when we see blue skies in Beijing because two-third of our time is spent in smog.
How do you keep costs low?
In the Indian market, you only have Apple or Samsung that are very expensive or a bunch of very low-cost phones. We don't profit from selling hardware. We are building mobile internet services. This year, our revenues from mobile internet services in China will be around $1 billion. We price a device very close to BOM (built of material) cost. It took us around two years to get to the number one position in the Chinese market, which is the biggest yet most competitive market in the world. Last year, we were in the list of top five phone makers in the world in terms of phone sales. In three to five years, we will work very hard to become number one in the Indian market.
No comments:
Post a Comment