Attracted by the booming demand for upgraded handsets, Chinese companies increase investment, set up more facilities

Chinese smartphone vendors are upping their ante in India as they increase investments to open more factories in the world's second largest smartphone market.

The move comes as India is seeing a record high in smartphone shipments, driven by the desire of consumers to upgrade their handsets.

Chinese smartphone brand Vivo, the No 3 player in India, is investing 4 billion yuan ($571 million) to set up a second manufacturing plant in the country. The move will likely double its local factory employee head count to about 20,000 in the next five years.

Chen Zhiyong, CEO of Vivo India, said the company has acquired land for the new factory adjacent to its existing facility in the Greater Noida area of Uttar Pradesh. Work on the new facility has commenced and will be put into operation phase by phase over the next five years.

"The first phase of the new plant is scheduled to start production in May or June," Chen said.

Vivo started manufacturing handsets in India at the end of 2015. Its existing plant employs more than 9,900 workers and has an annual production capacity of 25 million units.

Earlier last year, Chinese smartphone vendor Oppo also announced that its manufacturing facility, located in Greater Noida, has completed its first phase. The factory currently manufactures about 4 million smartphones every month, or a total of 48 million units a year.

Oppo said it aims to scale up operations at this plant and double the monthly production this year.

The efforts by Chinese smartphone vendors came as Xiaomi Corp, which is the top smartphone vendor in India, already has seven smartphone manufacturing plants in the country. Xiaomi is in partnership with Taiwanese multinational electronics company Foxconn and Singapore-based technological manufacturer Flex Ltd.

"We started manufacturing locally in 2015 with one plant and expanded to two units in 2017 and seven units in 2018. Across these seven plants, we have employed more than 25,000 people," Manu Jain, vice-president of Xiaomi, was quoted in a report by the Indo Asian News Service.

Jain said at this time, about 99 percent of Xiaomi's phones sold in India are made in the country, and the company makes three phones per second locally.

The expanding manufacturing presence of Chinese companies dovetails with their work of the past five years in tapping into the opportunities in India.