In an aim to improve competitiveness, Chinese tech giant Xiaomi is planning to join hands with its local partners to produce locally assembled mobile phones in Pakistan. “We plan to begin local assembling from December 2021 onwards,” Mr Peter Chai, Xiaomi National Representative in Pakistan revealed to Gwadar Pro in a recent interview.
After the new MDM (Mobile Device Manufacturing) Policy was approved, many companies started taking interest in acquiring assembling licenses. Such localisation would eventually transfer technology on the local level and provide employment opportunities.
Mr Shahrukh Rohilla, Sales Manager also pointed out that the MDM Policy will decrease taxation for manufacturers if brands assemble locally in Pakistan. He further explained, “in June 2021, there was a significant increase in regulatory duties through which CBU import pricing has gone much higher. In this way, it has become almost mandatory for global brands to start assembling locally to compete while at the same time providing honest pricing to our end consumers.”
Xiaomi entered Pakistan in 2017 through its official distributor Smartlink, where it initially focused on online selling. Xiaomi is now operating in Pakistan through 4 official distributors: Smartlink, M&P/TechSirat, Airlink & Phonezo. It covers the IR Channel of 2,000+ Retail outlets and has around 40+ Preferred Partner stores and 4 Xiaomi stores. Apart from that Mistore.pk is Xiaomi’s major e-commerce portal managed through its partner Smartlink and it is also strategically aligned with Daraz.
Technology will become a major revenue generator
“Technology is one of the main areas that have recently become the cooperation focus for Pakistan and China and it can be the major revenue-generating sector in coming years,” Peter Chai highlighted, “Pakistan’s current government has been receptive when it comes to policies especially related to digitisation and tech transformation. Pakistan’s current Internet penetration is at around 27-28% while 80% of the population has mobile phones. And smartphones have played a key role in providing Internet access.”
Pakistan is going through a transitional phase where consumers have started shifting to smartphones. Regarding the digital transformation of Pakistan, Peter Chai maintained that current infrastructure is good enough for a normal consumer to shift from 2G to 4G, and mobile phone operators have also been investing heavily in this aspect by offering subsidised data plans and other offers to maximise 4G penetration.
Chai said, “The Pakistani government has already published a Mobile Manufacturing policy to increase smartphone penetration as well as affordability. What’s more, enablement of fintech and e-commerce companies which are now entering Pakistan at a high pace would also help promote digitisation.”
“3G/4G penetration in the country is less than 50% right now, and we believe this will take at least 2-3 more years to reach at 80%+ keeping in view the ongoing initiatives by the government for Digital Pakistan and creating local manufacturing policy that would make smartphone accessible for everyone,” Mr Shahrukh added.
Pakistani mobile market matters
Viewing the potential of Pakistan’s market, Mr Peter Chai said that at present, Pakistan’s mobile market is regarded as the most important market in the entire region. “The growth is phenomenal after PTA implemented DIRBS system and curbed smuggled products inflow, which also enabled official channel products to focus and invest more in this market. Currently, its market size is approximately 18-20 million units smartphone annually worth approx. US$ 2.3-2.5 billion. We expect this market to grow with an estimated 15-20% on YoY basis, keeping in view local manufacturing and growth of the smartphone segment.”
In the past 7 years, Chinese mobile brands have taken over the entire world by storm. Mr Peter Chai believed that the major reason is Chinese brands have invested quite heavily in R&D by producing quality products. Chinese mobile phone brands are committed to bringing high-quality Chinese technology, products and services to Pakistan.
“Our products are usually optimised keeping in view the mindset of Pakistani consumers, but we don’t need to launch a separate version for Pakistan yet. But if there is a need, we can surely launch some special versions for our local consumers,” Mr Shahrukh concluded.
