Xiaomi downsizes Brazil operations

The Chinese manufacturer retrenches in the country due to changes in tax and manufacturing rules
Written by Angelica Mari, Contributing Writer

Chinese mobile manufacturer Xiaomi is losing steam in the Brazilian market less than 12 months after it launched its operations in the country.

The company has ceased its local manufacturing activity - it had an outsourcing deal with Foxconn - so devices sold in Brazil will be imported.

Staff from areas including marketing are moving to China, leaving only a nimble support base in Brazil to handle areas such as customer care and technical support.

Xiaomi's voice president for international operations, Brazilian-born Hugo Barra, told website Android Pit that the decision to retrench in the country is due to "constant changes in the rules for manufacturing and for taxation on e-commerce sales that were enforced at the end of 2015."

According to Barra, the company will only sell its devices Redmi 2 and Redmi 2 Pro in Brazil and will not launch any new products locally for now.

The Chinese company had been prioritizing the web as its only sales channel in Brazil, but the products will now be available to consumers in some large high street retailers.

Xiaomi's launch in Brazil had been highly anticipated by consumers who flocked to the company's website to secure a device. However, the underlying e-commerce infrastructure could not cope with the demand and users began to lose interest.

Barra did not respond to ZDNet's request for comment at the time of writing.

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