Mired by supply concerns Jio shifts its manufacturing unit to Chennai from China

Baffled with supply concerns, Mukesh Ambani-led Reliance Jio is shifting production of its 4G feature phones from China to India. The telecom conglomerate has been engaged in talks with a Chennai-based unknown vendor.

The decision to relocate manufacturing units to India comes at a time when Jio fears to miss its sales target. The company has set a target to reach sales of 200 million phones by December 2018.

So far, Jio had received about 6 million devices from the Chinese vendors. However, the slow pace of manufacturing led the company to explore synergies with a domestic vendor.

Earlier, while launching the phone Ambani said that Jio is targeting to have 5 million Jio phones available every week. Importantly, the company had claimed to start manufacturing mobile handsets during the current quarter.

“In the second phase, we have received expressions of interest for 10 million devices and have already started manufacturing in Chennai,” mentions a Mint report quoting anonymous sources.

A quick look at RIL and Jio key developments

Meanwhile, Reliance Industries Limited (RIL) is also planning to go public by next year-end. So far, the company has invested $31 billion in its telecom venture, which was launched in September 2016.

A couple of weeks ago, Ambani said that Jio is ahead of its schedule in terms of its returns and it would break even in the next few quarters.

Besides telecom, Reliance Jio is also eyeing to disrupt e-commerce market by leveraging its vast network and subscribers in the country.

The company is reportedly working with kiranas stores and consumer brands to create an operational model that will enable shoppers to buy at neighborhood shops using digital coupons via its wallet.

A pilot project is already underway at Mumbai, Chennai, and Ahmedabad.

Reliance is also looking to set-up a factory in Gujarat and Maharashtra that would produce Lithius-Ion (Li-Ion) batteries of 25 gigawatt-hours capacity.