Xiaomi continues expansion overseas despite pandemic
As Xiaomi looks to expand in Europe, Latin America and Africa, the company says shipments have returned to 90% of what they were before the Covid-19 pandemic
Xiaomi Corp said it will continue to tap into the growth potential of international markets after seeing smartphone shipments rebound to near pre-pandemic levels as countries around the world begin to relax lockdown measures.
“Lockdown measures are being relaxed in many European and Asia-Pacific countries. Our smartphone shipments have resumed to about 90% compared to pre-pandemic levels,” Wang Xiang, president and acting chief financial officer, said in a conference call on Wednesday. “This will lay a strong foundation for the recovery in the second and third quarters.”
Xiaomi, the world’s fourth largest smartphone vendor after Samsung, Apple and Huawei, is seeing increased importance from international markets with revenue from Europe, India, Latin America and other overseas markets accounting for half of total revenue in the first quarter of 2020, the company said in a statement accompanying its March quarter financial results.
In Latin America and Africa, the company said smartphone shipments in the first quarter grew 236% and 285% year on year respectively, although it only entered those markets in 2019.
Xiaomi brand smartphones captured market share of about 31% in India, its most important overseas market, and made inroads into European and Latin American markets, according to Wang. The gains come as global smartphone shipments saw an 11.7% drop in the first quarter due to supply chain and logistics disruptions caused by the Covid-19 pandemic.
Globally, Xiaomi expanded its smartphone market share to a company record of 10% in the first quarter, up from 8% in the same period a year ago, according to a report published by Strategy Analytics last month.
Revenue from Xiaomi’s smartphone segment increased 12.3% year on year to 30.3 billion yuan (US$4.3 billion) in the March quarter. Xiaomi shipped 29.2 million units in the same period, an increase of 4.7% year on year.
“Although the industry is facing severe challenges, the group still experienced growth in all segments despite the market downturn,” said Lei Jun, Xiaomi founder, chairman and CEO.
Looking ahead, analysts said Xiaomi and other Chinese smartphone brands could benefit from market share losses suffered by Huawei Technologies after the Trump Administration’s latest move to constrain the company’s ability to buy chips manufactured by foundries using US-origin technologies.
“Huawei’s decline in overseas markets provides more opportunities for Xiaomi and other Chinese vendors,” said Linda Sui, director of wireless smartphone strategies at Strategy Analytics. “This year Xiaomi will maintain a rapid growth rate in the European market.”
Huawei’s smartphone shipments overseas have been hit by the US tech restrictions so it has to rely on the domestic market for growth, according to Wang Xi, an independent digital analyst. “We will see Huawei become more aggressive in Chinese domestic market.”
Xiaomi said the domestic market will face fierce competition this year, adding that it will boost its presence by leveraging its family of mid-to-high end 5G handsets tailored to varying needs of consumers.
The company also reported double-digit growth in monthly active users of MIUI, Xiaomi’s home-grown Android-based operating system, and its Mi Home App.
Analyst Wang said this could help the company better monetize its internet services revenue with advertising and membership fees.
Hong Kong-listed Xiaomi posted better-than-expected profits and revenue results in the March quarter, with its total revenue increasing 13.6% year on year to 49.7 billion yuan.