Xiaomi reported yet another quarter of growing revenues at its earnings call today, registering RMB53.5 billion ($7.7 billion) in revenue, up 3.1% from the same time last year and 7.7% from Q1 2020. This comes at a time when its key market-India, still struggles to return to pre-COVID 19 numbers. Add to that the growing anti-China sentiment within the country, and the feat becomes even more commendable.
The Chinese smartphone manufacturer has been able to grow despite coronavirus and world wide lockdowns, with Q1 revenues growing 7.9% of the year. However, Q2 was even better, with the global monthly active users (“MAU”) of MIUI reaching 343.5 million by June 2020, an increase of 23.3% year-over-year.
Moreover, the quarter was more profitable than ever, with profit reaching $650 million, a 129.8% jump over the year, and a quarter wise increase of 108%.
The company also thinks that it is making great headway in establishing itself as a flagship provider, claiming that shipment of its premium smartphones- those that sell at retail price of $350 or more, grew 99.2% year-on-year in international markets.
Moreover, the bets it has been placing to diversify its revenue channels also seem to be working, as advertising revenue increased by 23.2% year-on-year to $450 million.
However, the company had a minor setback, which did not really affect its balance sheet much but can have long term effects. While the company managed to retain a market share of 30.7% by shipments in the Indian smartphone market, maintaining its position at the top of the table for the 12th consecutive quarter, the average daily number of smartphone activations in India returned to 72% of the pre-pandemic level recorded in January 2020.
Now, Xiaomi thinks that this is because coronavirus and India’s struggles with strict lockdown measures which were imposed in March. This affected the company’s sales, and while consumer demand started to rebound as many of these restrictions were gradually uplifted, sales were still limited by the production constraints. That is why, as the average daily number of overseas smartphone activations reached 120% of the pre-pandemic level recorded in January 2020, India did not become a part of the trend.
However, the company made up for this loss by expanding into new markets. “According to Canalys, in the second quarter of 2020, our smartphone shipments grew by 99.4%, 66.3% and 113.0% year-over year in Latin America, the Middle East and Africa, respectively, with our market share ranking among the top four in Latin America and the Middle East, respectively, and the top five in Africa,” Xiaomi said.
Moreover, the company took measures to bolster is global e-commerce channels, resulting in an increase in the proportion of its online sales and improvement in overall efficiency.