Foxconn, which once led the largest foundry giant in China's manufacturing industry, is now in an unprecedented predicament. Its founder, Terry Gou, once vowed to move Foxconn's factories away from China and into emerging markets such as India, in an attempt to replicate China's successful model.
However, what he did not expect was that India was not the promised land he imagined, but a place full of traps and crises. Foxconn has been hunted by a super consortium in India, facing a grim situation of losing customers, losing the market, and losing control. Terry Gou, the former king of manufacturing, can he still be crazy now?
1. Foxconn's Indian dream is shattered.
Foxconn's development in China can be said to be a legend. Relying on China's reform and opening up policy, low-cost labor, perfect industrial chain and efficient management, it has rapidly grown into the world's largest electronic product OEM, providing services for well-known brands such as Apple, Dell, and HP, with annual revenue of more than 200 billion US dollars and more than 1 million employees. Foxconn's factory in China is known as the epitome of "the world's factory" and the pride of China's manufacturing industry.
However, with China's economic transformation and upgrading, Foxconn's advantage in China has gradually weakened. Rising labor costs in China, increased environmental protection requirements, intensified market competition, declining profit margins, and changes in customer demand have impacted Foxconn's business. In this case, Foxconn's founder, Terry Gou, began to seek a new way out.
He set his sights on India, a country with a population of 1.3 billion, a huge market potential, cheap labor, and preferential policies. He believes that India is a new opportunity for Foxconn and a new China for Foxconn.
As a result, Foxconn began to invest heavily in India. It has set up several factories in India to produce mobile phones and other electronics for brands such as Apple, Xiaomi, and others. It also announced that it will invest $10 billion in India to build an electronics manufacturing park, and plans to increase the number of employees in India to 1 million over the next five years, making India the world's largest production base for Foxconn. Gou even said that Foxconn will gradually move its Chinese factories to India, transfer China's production capacity to India, and replace Chinese manufacturing with Indian manufacturing.
However, Foxconn's Indian dream was soon shattered. It has encountered a variety of problems in India, whether it is infrastructure, ** chain, human resources, market demand, or policy environment, social order, and legal system, all of which are very different from China.
Foxconn's factories in India often have power outages, water outages, work stoppages, strikes, fires and other accidents, resulting in low production efficiency, unstable quality, untimely delivery, and customer dissatisfaction. Foxconn's employees in India also often have problems such as high mobility, low quality, poor efficiency, poor discipline, and strong destructiveness, resulting in high management costs, tight human resources, and difficult training.
Foxconn's business in India is also often affected by policy changes, tax adjustments, exchange rate fluctuations, market competition, and consortium interference, resulting in high operating risks, low profit margins, and poor return on investment.
Foxconn's biggest blow in India came from its peer Wistron. Wistron is Foxconn's main competitor and one of Apple's important foundries. Wistron sold its factory in China to Luxshare Precision in 2020 and set up a factory in India to manufacture for Apple.
However, Wistron's development in India has not been smooth, its factories are small, the number of employees is small, the production efficiency is low, and it has suffered many shutdowns, strikes, fires and other accidents, which led to Apple's Indian ** chain in crisis.
In March this year, Wistron's Indian factory was wholly acquired by Tata Group, India's largest super consortium, and Tata Group also announced that it would continue to acquire other foundries in India to enter Apple's ** chain and compete with Foxconn. Wistron's failure in India has left Foxconn feeling unprecedented pressure and threat.
2. Foxconn's China complex.
Foxconn's predicament in India has forced Gou to re-examine his strategy. He found that the China he once wanted to abandon was actually Foxconn's biggest capital and Foxconn's biggest advantage.
China has the world's most complete electronics industry chain, the most stable policy environment, the broadest market demand, the most advanced technological innovation, and the best talent pool. China's manufacturing industry is no longer a low-end OEM, but a high-end creation, no longer an imitation to follow, but a leading innovation.
Chinese consumers are no longer passively accepting, but actively choosing, no longer a single demand, but a pluralistic personality. China is the root and soul of Foxconn.
Gou realized that he could no longer blindly move away from China's factories, but stick to the Chinese market, reshape China's image, and enhance China's value. He began to adjust Foxconn's strategy, from pure foundry to integrated services, from low-value-added products to high-value-added solutions, and from simple manufacturing to complex innovation.
He began to increase Foxconn's investment in China, establish R&D centers, cultivate talents, develop new technologies, launch new products, expand new businesses, and establish closer cooperative relations with China's leading enterprises, enterprises and society.
He began to attach importance to Foxconn's social responsibility in China, improve the welfare of employees, improve the quality of employees, enhance their sense of belonging, share the results with employees, and grow together with employees. He began to reshape Foxconn's brand image in China, build its own brand, improve its own quality, increase its own influence, and win the recognition and trust of Chinese consumers.
3. Foxconn's future path.
Foxconn's transformation has brought it back to life in China. Its performance began to pick up, its customers began to increase, its market began to expand, and its competitiveness began to improve. It not only kept Apple's orders, but also won the cooperation of Chinese brands such as Huawei, Xiaomi, OPPO, and vivo.
It not only continues to produce mobile phones and computers, but also enters new fields such as automobiles, medical care, education, and smart homes. It not only provides OEM services, but also provides a full range of services such as design, R&D, testing, logistics, and after-sales. It not only manufactures products, but also creates value and contributes to China's industrial upgrading and social progress.
Foxconn's transformation has also allowed it to re-establish its position in the world. Its influence began to spread, its partners began to increase, its ability to innovate began to emerge, and its leadership began to emerge. It not only has a solid foundation in China, but also has a wide range of layouts in the United States, Europe, Japan, Southeast Asia and other regions.
It not only serves brands across the globe but also provides products to consumers across the globe. It not only participates in the global industrial chain, but also leads the global technological trend and contributes to global economic development and social well-being.
The future of Foxconn is full of opportunities and challenges. It will face a more complex and changeable market environment, more fierce and brutal competitive pressure, more stringent and high standards of social requirements, and more diverse and personalized customer needs. It will require constant innovation and change, continuous Xi and progress, continuous optimization and improvement, continuous adaptation and leadership.
It will need to adhere to its core values, adhere to its own strategic direction, adhere to its own brand concept, and adhere to its own social responsibility. It will need to maintain close ties with China's enterprises, society, employees, and consumers, keep pace with China's development, align with China's interests, and achieve a win-win situation with China's future.
Conclusion: Foxconn, once the leading foundry giant in China's manufacturing industry, has now become a comprehensive service provider, an innovative value creator, and a leading technology leader. Its founder, Terry Gou, once wanted to move Foxconn's factories away from China and into emerging markets such as India, in an attempt to replicate China's successful model.
However, he eventually found that China is Foxconn's biggest capital, Foxconn's biggest advantage, and Foxconn's biggest opportunity. In the end, he chose to stick to China, reshape China, improve China, develop with China, progress with China, and prosper with China.
Only the Chinese can handle China's affairs well. "We believe that Foxconn, only on the land of China, can continue to write new legends, continue to create new value, and continue to show new style.