296: Chapter 296 The Reliance Group: A Very Sincere Enterprise

"Lei Jun, building a factory in India is no small matter. We need to invest at least 200 million USD to build an SMT production line and an assembly line."

"From site selection to production, it will take at least eight months at the fastest, and that's assuming Chinese infrastructure standards. If we do this in India, that timeline might be extended indefinitely..."

This skepticism didn't come from a lack of understanding of the Indian market; on the contrary, it was precisely because they understood it so well that they raised these doubts!

"And building the factory is just one aspect. India's power, logistics, and labor quality are all issues."

"It's hard to say if the yield rate can reach domestic levels; who knows, the costs might even end up being higher than they are back home?"

"I think power and logistics shouldn't be a problem. After all, they've stated their intention to build the 'Make in India' brand. Even if the execution is lackluster, the initial batch should at least be functional, right?"

Having spent these past few days visiting, Lin Bin was very clear about the local situation, and he knew everything Zhang Feng said was a fact.

"What Lao Zhang said is true, and the situation is even more severe than he described."

Wang Xiaoyan considered this for a moment and said, "But if we don't build a factory, the ten percent tariff difference will be the death of us."

"Samsung will definitely lower their prices, and Transsion will certainly follow suit to retaliate against us."

"By then, their costs will be 15% lower than ours. How are we supposed to compete?"

Seeing that the voices in favor of building the factory were growing, Lin Bin's attitude became even more cautious.

"The risk is too high. India's policy stability has always been an issue."

"Today it's the Singh administration, but who knows if it might change tomorrow? What if a new government comes in and the policies change?"

"And you all know Anil—it's impossible for him to help out for free."

Regarding the factory construction, everyone had their own ideas. They discussed it for over an hour but didn't reach any conclusion.

Lei Jun sat there listening to everyone's input, then combined it with his own thoughts, quickly calculating the numbers in his head.

Xiaomi's cash flow, the potential of the Indian market, the speed of Transsion and Samsung's actions, as well as Anil's execution plan.

Only after everyone had finished speaking did he voice his own thoughts.

"If we don't build it, how long can Xiaomi hold out against the 10% tariff difference?"

"Three quarters at most. After that, we'll have to raise prices. Once we raise prices, sales will plummet, and once they drop to a certain level, our distributors will start defecting."

"By then, it won't just be a matter of losing money; it will be a matter of our market share hitting zero."

Lin Bin had long been prepared for this question; in fact, he had more than one plan.

Before Lei Jun could speak again, he had already laid out his ideas for building the factory.

"If we build it, it will be operational in a year at most, and our costs will drop by 20%. But this year is our opportunity; perhaps the tariffs we save will be... more cost-effective than building the factory itself."

Lei Jun suddenly thought of an idea.

"Build it!" He looked at Lin Bin beside him. "But we won't build it ourselves. Let's find Anil—isn't he always thinking about building a factory?"

"We'll just go along with him, and we'll only be responsible for investing the money."

But Lin Bin frowned... Was it really reliable to go to him?

"Lao Lin, I know your concerns."

"He's a local heavyweight; he'll certainly be more reliable than us when dealing with the relevant departments, and he'll be able to secure more favorable terms."

"Since he wants our technology, we'll use our technology, capital, and management to build this factory together."

"We might even be able to get some subsidies."

"But won't they try to manipulate the equity?"

"Don't worry. If they don't agree, we'll just drag it out for a while longer."

Wang Xiaoyan then raised a new question: "What if we don't put up a single cent, and only provide technical support and the corresponding management?"

"And then we split the factory equity 50/50, and outsource our mobile phone business to the factory—would they agree to that?"

"Probably not, right?"

Just as Lin Bin finished speaking, Lei Jun glared at him and said, "We can try. He gets a factory for free—why wouldn't he agree?"

"For all we know, Reliance might have already hoarded the land years ago, just waiting for us to jump into the pit."

"Besides, what they want is Xiaomi's technology. This is the best opportunity."

Hong Feng, who hadn't spoken until now, suddenly said, "Lei Jun, we know Anil wants our technology, yet we're still cooperating with them?"

"I know," Lei Jun nodded. "But this is our last hope. We have to give it a try."

Everyone sighed, but in the end, they reached a decision.

They agreed to the plan, but they had to safeguard their technological security.

After the meeting, Lei Jun picked up his phone and dialed Anil's number.

In less than five seconds, Anil's voice came from the other end of the line, still carrying his usual laughter.

"Lei Jun, have you heard about the 'Make in India' policy?"

"I have. Mr. Anil, I was just waiting for your call, it's just a pity that... but that's not important."

Anil also laughed: "Lei Jun, we're on the same page. Tomorrow, in my office, we shall talk in detail."

After hanging up, Lei Jun felt a sense of surprise.

He knew Anil was not someone to be trifled with, and he knew that building a joint-venture factory was problematic, but he had no other choice.

Either drink this cup of poison and become the king of India, or drink nothing and wait for the next opportunity to enter the Eastern European market.

He chose the former.

...

Lei Jun went to the Reliance building once again.

This time, there was a huge map of India in the office, marked with Reliance Group's land reserves in various states.

It was densely packed, covering the entirety of India.

From Gujarat to Maharashtra... Reliance's red marks were everywhere across India.

"Lei Jun, look."

Anil pointed to a piece of land in Gujarat.

"This plot of land is only 50km from the Port of Ahmedabad and 3 miles from the highway."

"It's 500 square miles in size—more than enough to build a mobile phone factory with an annual output of 50 million units."

"If we build the factory here, we can have the government help us roll out the other infrastructure."

Lei Jun looked at the map without answering the question. He wondered if Reliance had brought out so much land because they had been waiting for this day all along.

However, these plots of land were likely intended more for real estate.

Anil continued his presentation as if he were selling a product, but his serious attitude made it feel like he was serving himself.

But it seemed correct; he was indeed planning for his own benefit.

"We can provide the land, and we'll be responsible for building the factory."

"We can also advance the funds, and we'll handle the government relations."

"We'll apply for the subsidies from the state and central governments. Lei Jun, you only need to do one thing."

He held up one finger, and the smile on his face deepened.

"Bring Xiaomi's production lines, technology, and management over. We'll make money together in the Indian market, and then split the profits according to the corresponding proportions."

Lei Jun looked at Anil's expression, surprised for a few seconds; this was actually more suitable than the plan they had discussed yesterday.

But with such sincerity, the suspicions in his heart were no longer just suspicions.