“Xiaomi wants to produce 4 million mobile phones a year and be the leader in Argentina”

The Argentine mobile phone market has sales of approx 11 million units per yearof which over 90% is concentrated in just two brands, Samsung and Motorola. These two players have just had a competitor: the Chinese brand Xiaomi, number three in the world. They will start assembling their phones in Tierra del Fuego, just like Samsung and Motorola do, with the idea of ​​shipping between one million and one and a half million mobile phones in the first twelve months of production alone. And they are aiming, in the medium term, for that figure that grows up to four million units a year, almost 40% of the local market.

That countdown is already underway: the first units of the model Redmi Note 11 of Xiaomi had already been shipped from the plant that the local company Etercore-Solnik has in the Fuegian city of Río Grande.

“We started mass production in the middle of the month,” he told Clarín Giovanni Paolo Baiardi, CEO of Etercor-Solnik. It is a family business Brito, shareholders in turn of Banco Macro, which replicates the model used by the two leading brands: Samsung assembles its models through the local company Mirgor (of the Caputo family), in the Rio Grande. Meanwhile, Motorola does so at the Newsan (Cherñajovsky family) facilities in Ushuaia.

Baiardi shared the interview, at the Hotel Faena, with Song Han, country manager of Xiaomi in Argentina. The partnership between Xiaomi and Solnik has been going on for years and in April they opened a store in the Abasto shopping center, the first “Xiaomi Store”, which offers a whole range of (imported) products based on the so-called “Internet of Things”: from cell phones Even razors.

Now the challenge is to move from the niche to fight for leadership. The industrial launch was postponed due to restrictions on the import of equipment. And even after starting the assembly work on the island of Fuegian, they admit that the numbers they project are strongly conditioned by the Government authorize import orders.

“The initial investment is 600 million pesos in fixed assetswhich is a machinery oriented to the production and adaptations of the industrial plant, and an investment of $ 100 million of working capital, only for the first year, for work reasons ”, explained Baiardi. Logically, today Argentina is in a situational question, in an external restriction, for which the level of activity will be defined by virtue of how this problem will be solved. But we have announced an investment of 1,500 million pesos for next year, to expand the installed capacity ”.

-How many phones do you plan to ship?

-This is a project for the first year of about one and a half million units, in the first twelve months of production. Always conditioned by how we manage to resolve this situation, of course. But the brand’s goal is to be the leader in Argentina, which will involve incremental volume and, logically, the associated investments.

-What market share are you looking for in Argentina?

-The initial project is four million units per year. This is the goal. For this project we are hiring about 100 people, partly in Tierra del Fuego and partly in the AMBA area. Some of the staff is for the manufacturing plant, and in Buenos Aires it is the marketing, sales and administration work. In total, we have more than 400 employees at Solnik, as we manufacture air conditioners and televisions, mainly of the Hyundai brand, and on behalf of third parties at our plant in Río Grande.

-How will you compete with Samsung and Motorola, with the price?

Han Song: Xiaomi is characterized by having an honest price, which has given us global advantages, and we have been able to verify it in Latin America. In Argentina, too, we believe it will be the same. The taste of the Argentine consumer is demanding, he likes to know what he invests his money in. That’s why we are sure that by coming out with the price we have, we can supply the market and grow in the rankings.

-How is Xiaomi positioned in the region today?

– We are currently in third place, after five years in Latin America, with a market share of 17% regionally, according to the consulting firm Canalys.

–How was Xiaomi born?

-Xiaomi is a very young company, founded in 2010. In the beginning it was not a product company but a software company, with MIUI, our level of customization on Android phones. So we were called, MIUI. Each brand has a different level of customization and for Xiaomi it is MIUI. In a short time, in six months, MIUI has become the most popular Android personalization system in the world and, as a result, we have started producing hardware, namely mobile phones.

-And they weren’t limited to cell phones.

-After Xiaomi established itself as the number one mobile brand in China, we started working on Internet of Things technology, which led to an expansion of our portfolio. In addition to mobile phones, we now offer a number of smart products linked to smartphones, so-called “smart homes”, which make life easier for any user, such as “smart” vacuum cleaners, surveillance cameras and small appliances. These products are now available in our business located in the Abasto neighborhood of Buenos Aires. The founder is Lei Jung, who gave impetus to the initiative with the motto innovation for all, first in China and then in the world.

-Are there any plans from another factory for products that are not cell phones?

Tierra del Fuego is the first factory in the region where Xiaomi has a local production and we do not exclude other factories in the future, in Latin America, for products of what we call “ecosystem”.