Xiaomi touches $5-billion revenue milestone in India in 2018-19

KOLKATA: China’s leading electronics start-up, Xiaomi continued its high pace of growth in the Indian market in 2018-19, where it is the largest smartphone maker by sales volume, touching the $5-billion revenue mark.

As per Xiaomi Technology India’s latest regulatory filings with the Registrar of Companies (RoC), the company’s total revenue in 2018-19 grew by 54% to Rs 35,426.92 crore as compared to Rs 23,061.11 crore it had clocked in FY18.

By revenue, Xiaomi continues to be behind Samsung India which had clocked mobile phone sales of Rs 43,087.9 crore in FY19, as per RoC data. On a consolidated basis, Xiaomi is the third largest smartphone maker in India by revenue after China’s BBK Electronics group which owns brands like Oppo, Vivo, Realme and OnePlus. In FY19, BBK Electronics group had posted sales of Rs 38,726 crore generated by the four brands together.

However, Xiaomi India plunged into losses last fiscal which analysts attributed to price war in smartphones and smart televisions where it had forayed last year, and for expansion of the business into brick-and-mortar stores which involves higher spending on distribution network and lower margin unlike e-commerce which was the company’s mainstay till FY18.

As per RoC data, Xiaomi India reported net loss of Rs 148.48 crore in 2018-19 as compared to a net profit of Rs 301.62 crore in FY18. The company in its RoC filings said the net loss was due to “increase in the expenditure overhead and competition in the local and global market.” Xiaomi said it will take all efforts to increase revenue and retain earnings in the upcoming years.

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Mayank Sharma, co-founder at Veratech Intelligence, which analysed the financials for ET, said Xiaomi’s explosive growth in India shows no sign of stopping anytime soon.

“The company’s manpower expenses too have increased by 200% in FY19 showing that the company is in for the long haul and expects continuous growth in the foreseeable future,” he said.

As per market tracker International Data Corporation (IDC), Xiaomi continues to be the largest smartphone maker in India by shipment volumes with 27.1% share as of September 2019 which declined marginally from 27.3% in the year ago period.

Samsung is at the second slot by shipment volumes with 18.9% share in September, followed by Vivo at 15.2%, Realme at 14.3% and Oppo at 11.8%, as per IDC. Xiaomi continues to lead in the online channel with a market share of 40% during the period accounting for four out of the five models sold in e-commerce, as per the researcher.

When contacted, Xiaomi India chief finance officer Sameer Rao said the company has launched multiple successful smartphones in 2019 which are priced extremely competitively. The company has also expanded its TV, soundbar, beard trimmer, water purifier and shoes.

“It has been a significant year with us witnessing highest mobile shipments of 12.6 million units in the third quarter of calendar 2019 as per IDC, whereas during festive season sale we witnessed 40% year-on-year growth and expansion of infrastructure leading to extensive investment,” said Rao. He said Xiaomi currently has the largest exclusive retail brand network in India.

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Rao said the company has made significant investment in supporting product categories, building the largest exclusive retail network in India, scaling up manufacturing for smartphones and televisions along with PCBA manufacturing of smartphones which are done locally.

“We have also scaled up our after sales network to over 2500 service centres ensuring maximum support for all products. These are all one time investments to support next few years to come,” he said.



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