India to become manufacturing hub for SAARC, African nations: Gionee

HYDERABAD: Gionee is looking to export mobile devices from India its second largest market after China to SAARC and African nations, from the manufacturing plant that it plans to set up over the next two to three years at an investment of $50 million (Rs 300 crore).

"We aim to make India a manufacturing hub outside China to cater to demand in African and SAARC countries, including Pakistan, Bangladesh, Sri Lanka and Nepal," Gionee’s President William Lu, told ET, adding that investment would be done to establish manufacturing capability, set-up Research and Development (R&D) center and local servers.

Gionee has appointed E&Y to advise it on setting up a manufacturing facility. Arvind Vohra, country CEO and Managing Director of Gionee India, who has 26% in the Indian arm, said the company is looking at both contract manufacturing and acquiring an existing unit in the country. Vohra said that the handset maker would generate funds internally for its expansion plans.

Handset manufacturers like Samsung, Intex, Lava and the Spice Group have already unveiled investments into domestic production under PM Narendra Modi's Make in India initiative, which has the potential to create lakhs of jobs and bring billions of dollars in foreign currency.

Gionee has a market share of 4% and aims to break in to the top three vendors in the country with 100% growth in revenues. The device maker has closed the 2014-15 financial year with revenue of Rs 2,750 crore, a growth of over five times from Rs 500 crore the year before. Vohra said that the company is now targeting a turnover of Rs. 6,000 crore in 2015-16.

The company will be investing Rs 225 crore on marketing this year. It will also be expanding its retail network with 120 exclusive experience stores, up from the current 12 stores in the country.

Gionee launched a dual band, dual mode 4G LTE smartphone, ELIFE S7 in India at Rs 24,999. It plans to sell around 60 lakh mobile handset units this year, up from 40 lakh in 2014-15.

Lu said that the company will be launching around 12 smartphones this year with a majority of devices supporting 4G LTE technology.

The company is also looking at leveraging the online sales channel in the country to increase sales further. Vohra however said that the major focus would be on the offline channel.

Lu said that the company is also working towards creating an ecosystem around Internet of Things (IoT) space and would launch smartbands and smartwatches this year. "The ecosystem will be developed at the global level and would be covering the Indian market as well," he said.

The company is also putting efforts to bolster software development for its smartphones and upcoming wearable devices. Lu said that the company is developing applications and other content related services around its Amigo OS, a customised UI running on Google's Android operating system.