Xiaomi’s financial report from the first quarter of 2020 – 13.6% annual revenue growth
from Did Lei Jun, founder and CEO of Xiaomi, although the smartphone industry has faced serious challenges, the Xiaomi group has continued to experience growth in all sectors despite the market stagnation; This fully reflects the flexibility, resilience and competitiveness of the company’s business model. He further added: “In the first quarter of 2020, we successfully completed the first financing based on US dollar bonds, the demand for which was 7.5 times the supply. Also, this year we were included in the Forbes Global 2000 list again, which shows the recognition of Xiaomi by the capital market. We believe that a crisis is the ultimate benchmark for a company’s growth potential, business model and value. “As the impact of the [coronavirus] pandemic is waning, we will continue to focus on our 5G+AIoT strategy and increase our investment power so that everyone in the world can enjoy a better life through innovative technology.”
Xiaomi has presented its financial report in the form of 4 business segments: Smartphones, Internet of Things and Lifestyle, Internet Services, and Business Outside China, which we will examine below.
Smartphone Business: Effectiveness of Dual Brand Strategy, Leading Market Position of 5G Products
Xiaomi has been able to sell 29.2 million smartphones in the first quarter of this year, which shows a 4.7% increase compared to the same time last year. In the same way, the company’s revenue from smartphone sales has reached 30.3 billion yuan with an annual growth of 12.3%. According to the recent report of the research institute Canalys, in the first quarter of 2020, despite the stagnation of the smartphone market, Xiaomi succeeded in supplying more than 30 million smartphones to the market, an annual growth experience 9 percent. Canalys statistics show that this company had 11.1% of the smartphone market share in the period from January to March this year, and by taking the fourth place in the table of the top smartphone manufacturers, it was one of the two manufacturers that was able to grow in terms of supply. to achieve In addition, the penetration rate of this company’s 5th generation phones in China is 25.9%, which according to the company’s announcement exceeds the industry average, and Xiaomi has achieved this with its leading position in the 5th generation smartphone market and the effective implementation of the dual-engine strategy. Related understands that it is a combination of 5G and the Internet of Things based on artificial intelligence.
It seems that the continuation of the company’s dual brand strategy has been very effective in the recent season, because the amount of Mi 10 5G and Mi 10 Pro 5G just two months after its launch in February 2020 from 1 million The unit has been exceeded. Xiaomi’s Redmi brand continues to introduce competitive products with different prices, and about two months ago, the K series flagship phones included Redmi K30 Pro and Redmi K30 Pro Zoom Edition has been introduced. In addition, Canalys reports indicate that the series smartphones Redmi Note 8 were the second best-selling phones in the world in the first quarter of 2020, and Xiaomi, based on the popularity of these phones, recently Redmi Note 9S and then Redmi Note 9 Pro has launched in markets outside of China .
According to this report, the average selling price (ASP) of Xiaomi smartphones has increased by 7.2% compared to last year due to the release of advanced models in the last quarter. Also, the average sales price of the company’s smartphones in China and global markets has grown by 18.7 and 13.7 percent, respectively.
Internet of Things and Lifestyle: Solid Business Foundations, Driving the Continuous Growth of the Internet of Things
In the first quarter of 2020, the income of Xiaomi In the Internet of Things and lifestyle products sector, despite the COVID-19 pandemic, sales increased by 7.8% to RMB 13.0 billion. According to this report, the number of devices connected to the company’s Internet of Things platform, excluding smartphones and laptops, has reached 252 million units by the end of March this year, which shows a growth of 42.6% compared to the same time last year. . In the same way, the number of users who have more than 5 IoT products of the company, excluding smartphones and laptops, has reached 4.6 million people with an annual growth of 67.9%. Also, in March, the number of active users of Xiaomi’s smart assistant called Xiao AI and the Mi Home application were 70.5 and 40.0 million, respectively, which shows an annual growth of 54.9 and 53.3 percent.
The supply of Xiaomi smart TVs in the quarter ending in March 2020, despite the global drop caused by the corona virus epidemic in the supply of TVs, continued to grow and reached 2.7 million units with an annual increase of 3%. According to the AVC Research Institute, in the last quarter, Xiaomi ranked first in terms of smart TV sales in China for the fifth consecutive season and is among the top five manufacturers in the global market.
This company introduced the AX3600 router in February and became the first brand in China to support Wi-Fi 6 technology from communication terminals to routers. The sales of the company’s routers experienced a 124% annual growth in the last quarter, and according to the AVC report, Xiaomi has won the second place in terms of online router supply in China. Also, not only the sales of Mi Band fitness bracelets saw a 56.0% year-on-year increase, the company’s other products such as fully wireless Bluetooth (TWS) headsets, electric scooters and the Mi robot vacuum cleaner also saw significant sales growth.
Business outside China: Half of the company’s total revenue
Xiaomi business outside China Borders experienced a very successful quarter, as half of the company’s total revenue was the result of this segment’s performance. According to this report, Xiaomi’s annual revenue from global markets has reached 24.8 billion yuan with a 47.8% year-on-year growth in the latest quarter. According to IDC, Xiaomi had a brilliant presence in India in the first quarter of 2020, and with a 31.2% market share, it has become the top smartphone supplier in the country for the 11th consecutive season. The Chinese company has taken advantage of its prominent position in the Indian market and has established its position in the neighboring countries as well, so that during the last season in Nepal, with 30.9% of the market, it has taken the first place in terms of supply. Is. On the other hand, Xiaomi has appeared successful in the European markets and according to Canalys report, in the last quarter with a 58.3% increase in supply compared to last year, it was able to take over 14.3% of the market in this region. The Chinese company is among the top four smartphone suppliers in Italy, France and Germany, and in Spain, with 28% of the market share, it has been ranked as the top supplier. Despite the stagnation of the global smartphone market, in the quarter ending March 2020, Xiaomi not only saw an annual growth of 236.1% in Latin America, but also experienced an increase of 55.2% and 284.9% respectively in the Middle East and Africa.
Internet services: continuous growth of income
Xiaomi’s income in the Internet service sector in the last quarter amounted to 5.9 billion yuan, which indicates an annual growth of 38.6%. According to this report, active users of Xiaomi’s MIUI user interface reached 330.7 million people in March of this year, which shows an annual growth of 26.7%. Active users of smart TVs and Mi Box converters in March increased by 46.8% to 30.4 million people. Also, the number of paid subscribers of these services is reported to be 4.3 million, which has grown by 53.7% compared to last year.
The Chinese company has been able to increase its income from advertising to 2.7 billion yuan by using various methods of earning money, including search, news feeds and optimization of recommender algorithms. It shows a 16.6% increase compared to last year. Also, in the past quarter, Xiaomi’s online game revenue has also increased to 1.5 billion yuan with a significant growth of 80.5%.
Income from the company’s internet services (excluding advertising and online games in China) including the income of the Youpin e-commerce platform, fintech business, TV internet services and internet services outside of China in the quarter. First, this year, it has experienced 71.5% annual growth. The
Xiaomi According to this collection It is considered one of the first manufacturers that took action to deal with COVID-19 and not only donated essential medical supplies to 30 hospitals in China, but also provided personal protective equipment and ventilators to people in 30 countries around the world. have given. Xiaomi is now trying to increase the production of its products with the help of its supply chain partners, as the effect of Corona has faded in China, and it has announced the gradual return of the supply of smartphones and also smart TVs in China to the level before the global pandemic.