Xiaomi’s overseas earnings have returned to pre-pandemic levels, its acting CFO has stated, as it declared profit had more than doubled in the second quarter on the back of strong growth in its high-end smartphone enterprise.
Revenue rose 3.1% in the quarter ending June 30, while sales climbed to 53.54 billion yuan (approximately $7.77 billion), beating analysts’ expectations.
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.
“This reveals our smart phones have achieved a significant breakthrough in Q2,” Wang Xiang, Xiaomi’s acting Chief Financial Officer, said on the earnings call.
The company’s high-end phone saw “explosive growth” in Europe, where smartphone shipments were up by 64.9%, Wang said.
Profit rose 129.8% to 4.49 billion yuan.
Xiaomi Corp reported an adjusted net profit of 3.37 billion yuan, beating the average market estimate of 2.24 billion yuan, according to Refinitiv data.
Xiaomi has relied increasingly on overseas markets such as India to boost growth as it struggles with competition from Huawei Technologies, the market leader in China.
The company’s revenue from overseas markets grew 10% year on year in the second quarter, accounting for 44.9% of its total revenue.
While sales in India started to recover as its lockdown was gradually lifted during the second quarter, production constraints have dragged on sales, Wang said. The number of new smartphone activations in July was still 72% of pre-pandemic levels, he said.
Xiaomi has also found itself caught in a backlash against Chinese technology businesses in India, where the government last month banned several mobile apps from a range of Chinese companies, including two from Xiaomi.
Wang said Xiaomi remained confident in the India market, saying the company would continue “to promote the mutual knowledge and confidence between individuals in India and China.”
The team at Platform Executive hope you have enjoyed this news article. Initial reporting via our official content partners at Thomson Reuters. Reporting by David Kirton in Shenzhen and Josh Horwitz in Shanghai. Editing by Andrew Heavens and David Evans.
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