China's Xiaomi Sees 14% Q1 Sales Growth Despite COVID-19... Strong Smartphone Performance

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Joselgina] Despite the impact of the novel coronavirus disease (COVID-19), Chinese company Xiaomi recorded first-quarter earnings that exceeded market expectations. Strong smartphone sales centered in India and Europe led to an overall revenue increase of nearly 14% compared to the same period last year. This is also the first time that overseas sales accounted for more than half of total revenue.

According to major foreign media, Xiaomi's first-quarter (January to March) revenue reached 49.7 billion yuan, a 13.6% increase compared to the same period last year. This figure surpassed market forecasts (47.8 billion yuan).

By segment, smartphone revenue (30.3 billion yuan) increased by 12% compared to one year ago. The number of units sold rose 5% to 29.2 million. Xiaomi explained this as being due to "newly launched high-end 5G smartphones in China and increased overseas sales."

In the first quarter of this year, Xiaomi ranked fourth in global smartphone shipments, following Samsung, Huawei, and Apple. In the market share report for the first quarter recently released by the US market research firm IDC, Xiaomi recorded double-digit market share for the first time ever.

The economic media CNBC reported, "In recent years, Xiaomi has faced fierce competition with Huawei in the Chinese market, and the domestic smartphone market is gradually shrinking," adding, "Xiaomi is focusing on overseas market growth to offset this."

During the same period, sales of Internet of Things (IoT) and home appliances also increased by 8% compared to the same period last year.

However, Xiaomi's first-quarter net profit was only 2.1 billion yuan, down more than 30% from a year earlier. Foreign media added that this was due to increased marketing expenses for sales promotion and research and development costs.

It seems difficult to avoid the impact of COVID-19 on second-quarter earnings. One of Xiaomi's key markets, India, implemented a lockdown (city blockade) from the end of March.

This content was produced with the assistance of AI translation services.