China’s Gionee To Set Up Smartphone Manufacturing Plant In India As Supply Hub For Region: Report

Chinese smartphone maker Gionee Communication Equipment Co. Ltd. will set up a manufacturing plant in India that could serve as a hub supplying the company’s Android handsets to multiple markets in the region, according to a report by Press Trust of India that appeared in Economic Times.

Gionee already sells its smartphones in India and aims to double sales by units to 8 million smartphones in the country this year, Arvind Vohra, chief executive of Gionee’s Indian operations told Press Trust at an event in the southern Indian city of Hyderabad, where Gionee was promoting its ELife S7 handset over the weekend.

The company is evaluating locations for its plant and expects to spend 3 billion rupees ($50 million) on it, and has contracted consultancy EY to advise it on the project, according to the report.

India is the world’s third-largest smartphone market, and Gionee joins China’s Xiaomi Inc. in its plans to start manufacturing in the region, where demand far outstrips supply for affordable smartphones packed with software features, as hardware specifications become increasingly commoditized.

As software, user experience and local features become increasingly important, Chinese smartphone companies are ramping up their R&D efforts in India. Gionee will more than double its local research and development team in India to 30 from 12 people currently, Press Trust reported separately, citing William Wu, the company’s president.

Huawei Technology Co. Ltd., has its largest overseas R&D center in Bangalore and Xiaomi has recently leased a 22,000-square-foot office in one of the city’s business parks, where it is setting up its India research center.