Xiaomi begins making phones in Indonesia

Located in Batam, the plant has the capacity to manufacture up to 1 million units per month and its production will be sold only in the Indonesian market.

Xiaomi says it has begun making phones in a new plant in Indonesia, with the capacity to churn out up to 1 million units a month and specifically for the local market.

Located in Batam, the manufacturing facility already had produced its first device, the Redmi 3S, which was unveiled at a soft launch earlier this year, said a Xiaomi spokesperson. Because this was an update to an earlier model, production for the smartphone was in small quantities, he told ZDNet.

The next model slated to come out of the new site would be the newly launched Redmi 4A, he said. The device would be available through local distributors and retail stores from the end of February.

With the new plant up and running, Xiaomi said it now was in compliance with Indonesia's Domestic Component Level law, referring to the value or percentage of hardware and software components that must be sourced locally in order for the device maker to sell its 4G devices in the country.

This mandate states that at least 30 percent of 4G smartphones sold must be local, with this percentage increasing to 40 percent from 2019.

The new Xiaomi plant, launched in partnership with Erajaya Swasembada, Sat Nusapersada, and TSM Technologies, would have the capacity to produce up to 1 million units a month, the spokesperson told ZDNet.

The Chinese smartphone vendor launched its first phone, Redmi 1S, in Indonesia in August 2014 and since opened several service centres across the country.

When asked, the Xiaomi spokesperson declined to reveal how many of its phones were sold in the Indonesian market or how much it had invested in the new facility or in the country.

Noting that Indonesia was "an important market" for the company, Xiaomi's Indonesia country head and Southeast Asia head, Steven Shi, said in a statement: "We are committed to incorporating local manufacturing capabilities into our smartphones and we are also looking to work closely with software developers in Indonesia to further improve the user experience for Indonesian Mi fans."

According to IDC's latest market figures, Xiaomi shipped 41.5 million units in its domestic Chinese market in 2016, dipping 36 percent from the previous year. It grabbed 8.9 percent market share and just made it to the top 5 vendor list, behind leaders Oppo and Huawei which shipped 78.4 million and 76.6 percent, respectively. Vivo and Apple came in third and fourth with unit shipments of 69.2 million and 44.9 million, respectively.