Xiaomi reports 3.1% revenue growth in Q2 despite restricted production in India
Xiaomi reported a revenue of $7.77 billion for the quarter that ended in June this year, up 3.1% since the same period last year and up 7.7% over the previous quarter as the Chinese smartphone maker sees recovery in most of its overseas markets.
The company, which appointed Alain Lam (former APAC senior executive from Credit Suisse) as its new CFO this week, said its profit in the second quarter stood at $650 million, up 129.8% year-on-year and 108% compared to Q1 2020.
Its smartphone sales, which still account for the bulk of its revenue, has recovered in most of its international markets. Excluding India, the average daily number of overseas smartphone activations reached 120% of the pre-pandemic level recorded in January 2020, it said.
India, its biggest market outside of China, is a different story. New Delhi ordered a nationwide lockdown in late March that resulted in closing of most shops across the nation. Package delivery of non-essential" items ordered online were also restricted for weeks.
Even as India, where Xiaomi has been the top smartphone vendor for the last 12 quarters, has eased lockdown restrictions in the months since, daily number of smartphone activations were still at 72% (compared to January 2020) as of last month, Xiaomi said in its quarterly earnings presentation today.
Xiaomi said local production yields are to be blamed. As the production capacity had not yet returned to the normal level, our sales were still limited by the production constraints," it said.
The company has found a silver lining in Europe. In the second quarter of 2020, according to research firm Canalys, Xiaomi's smartphone shipments grew by 64.9% year-on-year in Europe, achieving a total market share of 16.8%.
In Western Europe, Xiaomi's smartphone shipments grew 115.9% year-on-year, accounting for a 12.4% market share. Similarly, according to Canalys, Xiaomi commanded the top smartphone vendor position in Spain, second in France, and 4th in Germany and Italy.
The company said shipment of its premium smartphones - those that sell at retail price of 300 ($350) or more - grew 99.2% year-on-year in international markets. Driven by the higher proportion of sales from mid- to high-end smartphones, the average selling price of the company's smartphones increased by 11.8% YoY and 7.5% QoQ," it added.
The smartphone giant, which has been attempting to grow its advertisement business, said there were 343.5 million MIUI users as of June 30 this year, up 23.3% year-over-year. MIUI is Xiaomi's custom Android operating system that runs on the vast majority of its smartphones. (Xiaomi has also launched a handful of smartphones with pure Android version.)
As the company's smartphone install base grows, its advertising revenue is also surging. In the second quarter of 2020, its advertising revenue increased by 23.2% year-on-year to $450 million, it said.