For years, India has been a crucial market for global smartphone manufacturers, and Oppo, the Chinese tech giant, is no exception. But beyond just selling devices, there’s a significant shift happening: Oppo is increasingly looking to India for its manufacturing needs, particularly when it comes to sourcing components locally. Is this a strategic pivot that could redefine Oppo’s global operations and solidify India’s position in the global electronics supply chain?
Recent reports indicate a strong push from Oppo, alongside other Chinese smartphone makers like Vivo and OnePlus, to deepen their local value addition in India. This move isn’t just about cost savings; it’s a multifaceted strategy driven by a combination of government regulations, supply chain resilience, and a growing ecosystem of Indian component suppliers.
The Indian government’s “Make in India” initiative has been a key catalyst in this transformation. Stricter foreign direct investment (FDI) norms and mandatory clearances from the Bureau of Indian Standards (BIS) for certain components have made it imperative for companies like Oppo to reduce their reliance on imports, particularly from China. This regulatory pressure, coupled with a desire to avoid potential supply disruptions, has pushed Oppo to actively seek local sourcing options.
Tasleem Arif, Oppo India’s managing director for R&D, recently shared insights into the company’s vision. He emphasized Oppo’s active pursuit of “strategic engineering partnerships” with Indian gaming companies to enhance the user experience on their devices. More significantly, he highlighted Oppo’s ambition to double its smartphone local value addition from 18-20% by 2026. This indicates a serious commitment to embedding deeper within the Indian manufacturing landscape.
Oppo’s efforts aren’t happening in isolation. The broader trend shows that Chinese brands are currently sourcing around 15% of their smartphone components locally in India, and this figure has the potential to double in the next couple of years. This growth is fueled by the proactive steps these companies are taking to cultivate a robust local supplier base.
Satish NS, president at Haier India, a Chinese refrigerator and television maker, echoed this sentiment. He mentioned that Haier has committed to certain levels of consumption from local suppliers and is even encouraging component manufacturers to set up plants near their production units in India. This kind of collaborative approach suggests a long-term vision for building a self-sufficient electronics manufacturing ecosystem in the country.
Oppo already boasts a significant manufacturing presence in India. Their 110-acre “super factory” in Greater Noida, established in 2016, is a testament to their existing commitment. This facility reportedly produces one smartphone every three seconds during peak season and employs over 10,000 individuals. This scale of operation underscores India’s importance in Oppo’s global manufacturing strategy.
Furthermore, Oppo’s “Vihaan” initiative, announced in July 2022, demonstrates their long-term commitment to strengthening the local supply chain. Under this program, Oppo India pledged to invest USD 60 million over five years to empower small and medium enterprises (SMEs) and micro, small, and medium enterprises (MSMEs) to amplify their operations. This initiative aims to foster a robust smartphone ecosystem in India by partnering with more local suppliers. Oppo has already collaborated with around 30 Tier-1 suppliers to establish their operations in India, creating numerous jobs and contributing significantly to the growth of the electronics industry.
The company’s manufacturing prowess in India is not just about assembly. The Noida factory incorporates advanced Surface Mount Technology (SMT) machines capable of placing thousands of micro components per hour, showcasing their investment in sophisticated manufacturing processes. Each Oppo smartphone undergoes rigorous testing procedures, including durability tests that simulate real-world usage scenarios, ensuring high-quality products are rolled out of their Indian facility.
While Oppo has made significant strides in local manufacturing, reports suggest they are still exploring broader, long-term partnerships with major Indian Electronics Manufacturing Services (EMS) firms. This indicates a desire to further diversify their manufacturing model and potentially reduce reliance on their existing joint venture for production. Collaborations with established Indian players could provide Oppo with greater flexibility, cost-effectiveness, and stronger relationships with the Indian government.
The Indian government’s increasing scrutiny of Chinese firms operating in the country, focusing on financial practices and ownership structures, adds another layer of complexity. Oppo’s ongoing efforts to deepen its local manufacturing and sourcing are likely aimed at addressing these concerns and ensuring smoother business operations in the long run.
The push for local component sourcing isn’t just a regulatory necessity; it also presents significant opportunities. By developing a strong local supply chain, Oppo can potentially lower production costs, reduce lead times, and gain greater control over its manufacturing processes. This increased self-reliance can be a significant competitive advantage in the dynamic smartphone market.
Moreover, this localization drive can have a profound impact on the Indian economy. It fosters job creation, encourages the growth of local component manufacturers, and enhances India’s standing as a global manufacturing hub for electronics. Oppo’s commitment to investing in local R&D, as evidenced by their Hyderabad center, further strengthens India’s position in the technology value chain.
The road ahead for Oppo in India seems to be paved with an increasing focus on localization. While challenges in building a comprehensive local component ecosystem remain, the company’s proactive approach, coupled with government support, suggests a promising future. Could India become Oppo’s primary manufacturing base outside of China? The signs certainly point in that direction, with the potential to reshape the global smartphone manufacturing landscape. This strategic shift could not only benefit Oppo and the Indian economy but also offer consumers more affordable and readily available devices in the years to come.
