Expect production to resume in coming weeks, see demand returning by Q3: Xiaomi

Xiaomi on Monday said it expects production of its smartphones in the country to return to normal capacity by next month, and demand returning by third quarter (July-September) as government eases restrictions during lockdown in various parts of the country.

The company has also introduced an offline-to-online solution called "Mi Commerce" for its retail partners to help customers discover and buy products offline while staying at home.

After 40 days of lockdown, certain business activities like opening of standalone stores and e-commerce delivery of non-essential items have been allowed in Green and Orange Zones (locations with few or no COVID-19 cases).

Xiaomi India Managing Director Manu Jain said Foxconn has received approval from the Andhra Pradesh government for Sri City plant and will soon commence production.

The company expects to start production through partners across factories in the next few days.

"The supply should be ramped up... we expect to start with regular capacity by June. We will keep ramping up the production," Muralikrishnan B, chief operating officer at Xiaomi India, said.

He added that while no component supply-related constraint is expected, there could be challenges around manpower at these facilities.

He said Xiaomi typically maintains a couple of weeks worth of inventory, and with production starting, the company does not anticipate any challenges.

Talking about sales, Jain said the company is resuming smartphone sales via both offline and online channels in Green and Orange Zones.

Mi.com (its e-commerce platform) is already live, and Amazon and Flipkart will also be available for customers in the zones where sales are allowed, he said.

The company also announced that it would unveil its flagship 108MP camera phone Mi 10, on May 8.

Jain said over 15 per cent of Xiaomi's partner stores are operating, and around 60 per cent of stores in the Orange and Green Zones should be operational from Monday.

Xiaomi has over 10,000 offline retail points in India under different models -- Mi Stores, Mi Homes and Mi Preferred Partners.

"We expect smartphone sales to rebound very quickly. While Q2 (April-June) would see a decline, Q3 and Q4 should be like before," Jain said.

He added that the company has retained all its 50,000 employees and partners despite the challenges brought about by coronavirus pandemic that forced closure of retail stores, malls and factories, with people being forced to stay indoors to ensure social distancing.

Talking about 'Mi Commerce' solution, Muralikrishnan said it is a product discovery platform where users will be able to see Xiaomi inventory available at nearby store.

The last mile delivery, which will be "contactless", will be carried out by retailers.

vivo had on Sunday announced that it is enabling 20,000 of its retail partners to begin smartphone sales where the company will help customers connect with retailers in their neighbourhood to make purchases.