Xiaomi reports record Q4 revenue drop, loses Indian smartphone market in high-end devices to Samsung

Chinese smartphone maker Xiaomi on Friday reported a record decline in fourth-quarter revenue as the company weathered a slowdown in consumption and disruptions from China’s COVID-19 restrictions.

Early signs suggest China’s economy will rebound only slowly as consumers remain cautious about spending despite an easing of restrictions on domestic and international travel.

Xiaomi Group Chairman Lu Weibing, speaking on a company earnings call, said Chinese consumer electronics is currently seeing the first signs of a recovery, but “it will take time. “.

The year-on-year declines could continue into the first half of the year before a rebound occurs, he added.

Xiaomi’s sales in the fourth quarter of 2022 reached CNY 66.05 billion (nearly Rs 79,200 crore), down 22.8% from the CNY 85.58 billion (nearly Rs 1,02,600 crore) a year earlier.

The numbers were slightly ahead of analysts’ expectations, but they mark the company’s fourth straight drop in revenue, and the steepest on record to date.

Net income fell to CNY 1.46 billion (nearly Rs 1,750 crore) during the period, down 67.3% from CNY 4.473 billion (nearly Rs 5,360 crore) a year earlier .

The company’s revenue for 2022 was CNY 280.04 billion (almost Rs 3.35,800 crore), down 14.7%, while net profit stood at 8.52 billion CNY (almost Rs 10,200 crore), down 61.4%. Both figures are below analysts’ expectations.

Fall of smartphones

Overall consumption in China led most product categories in the fourth quarter as the abrupt lifting of strict COVID-19 restrictions led to a rapid spread of infections across the country.

All major smartphone brands experienced a drop in sales in China during the period, according to research firm Canalys. Xiaomi, however, was the hardest hit with shipments down 37% year-on-year, according to data from Canalys.

Smartphone sales in China suffered a record slump in 2022, down 14% to 287 million units, according to Canalys data. It was the first time in ten years that shipments fell below 300 million units.

Xiaomi is also facing headwinds in India, where it failed to notice a growing consumer preference for high-end devices and ended up losing its position as the top-selling phone brand to Samsung in South Korea. South in the fourth quarter.

The company, along with its rivals, could also face further security investigations from Indian authorities due to national security concerns over pre-installed apps.

India is Xiaomi’s largest overseas market and the world’s second largest smartphone market.

Xiaomi is also expanding into electric vehicles. The company said on Friday it was “on track” to meet its goal of mass-producing its first cars in the first half of 2024.

© Thomson Reuters 2023

---