Chinese smartphone companies to make big changes to their Indian business structure

In response to government scrutiny and allegations such as tax evasion and money laundering, Chinese smartphone companies in India, including Vivo and Oppo, are appointing Indian distributors as a primary source of product supply. This move is part of three key changes that the Indian government wants Chinese companies to make.

One of the first things that the govt wants these brands to have is an Indian management. Second, it expects them to appoint Indian distributors to localise the distribution structure. Until now, these brands had Chinese-owned and managed distribution companies in each state, which channeled goods to retailers through local distributors.

Starting from next month, Vivo will replace its agents in Delhi, Punjab, and Haryana with Indian distributors, with plans to expand this model to other states. Oppo has also set up a similar structure in Delhi, replacing its Chinese distributor with an Indian one, and plans to roll this out nationally. Xiaomi and Realme have been using Indian entities for distribution from the beginning.

The third requirement from the government is for these companies to use local contract manufacturers. Oppo, Vivo, and Realme have started, or are in the process of starting smartphone manufacturing with Indian contract manufacturers like Dixon Technologies and Karbonn Group.