Xiaomi Less Dependent On China, Sees Surprising International Growth

Xiaomi Group today has just announced its annual financial report for 2018. In the report, the company’s total revenue during the reporting period was CNY 174.9 billion (around $26 billion), which increases by 52.6% compared to last year. The adjusted profit was reported to be CNY 8.55 billion (around $1.3 billion), which is 59.5% increase over the last year. The total revenue met the expectations of the company while the net profit even exceeded the market expectations.

As reported by IDC, Xiaomi achieved the fourth position in the global ranking in term of total smartphone shipments. Besides, the IoT (smart home) division of Xiaomi has also accelerated, which shipped 150.9 million units, increasing by 193.2% year-on-year. In addition, the sales from the smartphone business that brings most of its profits reached CNY113.8 million ($17 billion roughly).

One major reason for the incredible annual revenue of the company is the way it sells the devices. It is known that the selling price of a Xiaomi phone was around $143 (Rs. 9,800 roughly) on average, which an affordable price. It runs the major businesses with the margins that are very slim, thereby bringing big value for money to customers with its devices. While this actually affects margins in a temporary period, it builds the long-term reputation value that the company has already achieved last year.

The Indian market is an important contributor to the overall performance of Xiaomi, in which Xiaomi has kept its position in the ranking of shipment and sales for six quarters in a row. Along with India, Indonesia, the same price-sensitive market has increased sharply 300% in Xiaomi’s sales. In the European market, Xiaomi has launched more high-end devices in order to diversify the brand proposition. As a result, Xiaomi held the fourth position in the European smartphone market with a year-on-year increase of 415% in smartphone shipments.

These above statistics have indicated Xiaomi’s independence on China. Last year, 60% of the company’s business was from China, decreasing by 12% year-on-year.