International markets pay off for Xiaomi

Xiaomi has released its quarterly figures with breakthroughs in the Indian and Indonesian markets paying off for the budget smartphone manufacturer.

Over the last three months, Xiaomi reported total revenues of roughly $6.6 billion, a year-on-year increase of 63%, while profit stood at $826 million, a rise of 46%. Comparisons for the first six months accounted for an even healthier boost to the coffers, with total revenues up 75% and profits boosted by 57%.

Looking at the individual business units, smartphones accounted for the lion’s share of cash. The second quarter brought in roughly $4.5 billion, a year-on-year rise of 58%, with the team pointing to both an increase in volume of shipments and average selling price. Sales volume for the quarter reached 32 million units, up 43% compared to Q2 2017, with IDC estimating the brand was the fastest growing of the major global brands.

Over the last couple of weeks, Xiaomi has been claiming headlines with victories in the developing markets. Firstly, usurping Samsung for top spot in India was somewhat of a coup, but capturing 22% of the shipments across the second quarter in Indonesia (compared to 2% in 2017) perhaps indicates Xiaomi is going to be a genuine contender on the global scene. Progress can also be seen in Western Europe with launches in France and Italy, and the team claiming shipments across the continent grew 2700% compared to the same period in 2017. Overall, the international markets accounted for 36% of total revenues.

While Xiaomi is attempting to build foundations in the budget markets internationally, in China the premium smartphone market is the big target. In mainland China, average selling price of devices increased over 25% year-on-year in the second quarter of 2018, led by the Mi 8 launch, which sold over 1.1 million units in the first month. This might be a market which has gone through a tough couple of months, though Xiaomi believes China will return to growth in 2019, and is keen to streamline the portfolio to maintain progress in the premium devices segment.

Over in the smaller business units the story was still a successful one. Revenue from the internet services segment grew 63.6% year-on-year to $580 million, primarily focused on the Chinese domestic market. The IoT and lifestyle products segment grew 104% year-on-year in revenue to roughly $1.5 billion, with  smart TVs growing over 350% year-on-year. The team also claim to have about 115 million connected Xiaomi IoT devices, excluding smartphones and laptops, representing 15% quarter-on-quarter growth. 1.7 million users own more than five Xiaomi IoT devices, offering the beginnings of a successful convergence model.

For some time there have been questions over whether Xiaomi can offer a genuine threat on the global stage, though these numbers do seem to offer credibility to the challenge.