Xiaomi’s Profits Increased in the Second Quarter, Despite the Resistance in India

August 27, 2020 3:06 am

Beijing (PingWest)—Chinese smartphone manufacturer Xiaomi, released a better-than-expected Q2 2020 financial report.

According to the company, for the quarter that ended in June this year, its revenue hit 53.54 billion yuan ($7.7 billion), which is higher than the market expectation of 51.4 billion yuan ($7.4 billion). Revenue was up from 51.95 billion yuan in the same period a year earlier.

Overall revenue from the company’s smartphone business, which accounts for nearly two-thirds of its revenue, fell 1.2% to 31.6 billion yuan ($4.59 billion). Xiaomi sold 28.3 million handsets in the quarter, down from 32.1 million units a year earlier.

However, sales of premium phones in overseas markets were up by 99.2% year on year, with average selling prices rising 11.8% in that period.

The company’s high-end phone saw “explosive growth” in Europe, where smartphone shipments were up by 64.9%, Wang Xiang, Xiaomi’s acting CFO, said on the earnings call.

The company’s revenue from overseas markets grew 10% year on year in the second quarter, accounting for 44.9% of its total revenue.

India is one of Xiaomi’s most important overseas markets. In 2019, Xiaomi’s global mobile phone shipments reached 125 million units, and India accounted for 43.6 million units. Recently, due to the sentiment of boycotting China caused by the China-India border conflict, a bunch of apps developed by Chinese tech firms, including two from Xiaomi, were banned by the Indian government. Some Indians even launched campaigns to boycott China-made products.

But, Wang said Xiaomi remained confident in the India market, saying the company would continue “to promote the mutual understanding and trust between people in India and China.”

Meanwhile, revenue from the Internet service sector hit 5.9 billion yuan ($856 million), a year-on-year increase of 29.0%, accounting for 11.0% of total revenue. Advertising, games, and other value-added services all achieved growth.

In addition, other Internet value-added services contribute 1.8 billion yuan ($261 million) in revenue, a year-on-year increase of 27.0%. This is mainly due to the growth of its financial business, Youpin e-commerce platform, and TV membership revenue.

The financial report also shows that the revenue of IoT and consumer products is 15.3 billion ($2.2 billion). This is an increase of 2.1% from the same period last year.