- Smartphone sales are affected by several factors: problems with inputs, something that has been dragging on since the exit of the pandemic; rising prices, due to global inflation; and falling purchasing power of consumers, who must save money for food and energy bills.
- In this market, Xiaomi is following the trend: less sales, less revenue, less profit. The good news for the Chinese brand is that it still remains third in global market share, behind only Samsung and Apple.
- The Chinese brand has managed to improve its sales in other markets outside its home country, which is helping it to avoid the fluctuations resulting from the single dependency.
Xiaomi posted losses of more than 1.47 billion yuan (200 million euros) in the three months of this year between July and September, compared to a net profit of 790 million yuan (107 million euros) in the same period of 2021, according to the quarterly accounts published by the company on Wednesday, November 23.
In the Chinese company’s data, it highlights a negative impact of 2.4 billion yuan (325 million euros) due to the detriment in the value of the investment in preferred shares.
The smartphone maker’s sales from July to September have reached 70.475 billion yuan (9.597 billion euros), which is 9.8 percent below this period of 2021.
Specifically the area of cell phones, had a turnover of 42,515 million yuan (5,790 million euros), down 10 percent; in the sector of the Internet of things (wearables) has generated 19,057 million yuan (2,594 million euros); and in the Internet services sector achieved 1,834 million yuan (249 million euros), representing a 6.5 percent below a year ago.
Xiaomi sales and revenue
Xiaomi noted that in this period the money earned in the other countries outside China exceeded 35 billion yuan (4.8 billion euros), which is more than half of the total figure.
This shows a strong growth of the company in markets other than its home country, diversification that is allowing it to sustain its structure when sales are not good in China.
In these same months, shipments of Xiaomi branded smartphones (and its derivatives, such as Redmi) were in the top 3 in more than 50 countries and regions; and in the top 5 in 65 countries. This last figure is included in Xiaomi’s report and belongs to the technology market analysis firm Canalys.
Xiaomi said that its market share of cell phones in the Eurozone, Latin America and the Middle East has increased in the months of July to September compared to 2021.
Xiaomi’s Q3 2022 results.
In the first three quarters of 2022, the Chinese company had losses of 678 million yuan (93 million euros), compared to profits of 16,854 million yuan (2,294 million euros) in the same months last year, and turnover is down almost 12 percent year-on-year to 213,997 million yuan (29,141 million euros).
The Chinese brand’s strategy
Since its founding more than a decade ago, Xiaomi has had a very rapid growth to reach the top of the technology market in China.
Its strategy has been so powerful that it is currently among the most important smartphone manufacturers worldwide.
The marketing strategy is focused on smartphones but also on other electronic devices such as the Xiaomi Band smartwatches.
In recent years, Xiaomi has grown phenomenally to be on par with technology giants such as Samsung and Apple.
Through the second quarter of 2021, it has a market share of 14 percent, an increase of 1.4 percentage points versus the first three months of this year.