Xiaomi's India biz turns around, revenue grows over 9% in FY22

Xiaomi turned around its India business in FY22 with the company‘s turnover growing more than 9% to Rs 39,099 crore, topping the pre-pandemic revenue achieved in FY20, as per regulatory disclosures made to the Registrar of Companies.

According to analysts, the financial performance reveals that the anti-China rhetoric in social media and the strict actions by Indian authorities had no impact on the business of the Chinese company in India. The filings, made on Thursday, did not mention Xiaomi Technology India’s profit or loss for FY22. Xiaomi Technology India had posted sales of Rs 35,705 crore in FY21 and Rs 38,196 crore in FY20. In FY21, Xiaomi’s net profit was Rs 275 crore, which had declined from ₹401 crore in the previous year.

“Xiaomi’s business model works on razor-thin margins and leveraging volumes in sales. Their brand has positioned itself as an affordable brand and has not done very well in the premium segment and, as a result, there is constant pressure on the margins,” said Mohit Yadav, founder of business intelligence firm AltInfo.

Yadav said a new strategy is needed to increase margins or otherwise the company’s business model will come under scrutiny if the demand slows down or there is a sudden surge in prices of consumables.

The filings also show Manu Jain, Xiaomi Technology India’s former managing director, had resigned from its board in February 2022, while Enforcement Directorate raids started in December 2021. In November 2021, Jain had become a director of the company, after stepping down as its MD. He announced his resignation from the Xiaomi Group in January this year. Muralikrishnan B became an additional director and then a director at Xiaomi Technology India, both in November 2021. He is currently president of the company.

An email sent to Xiaomi Technology India did not elicit any response till Friday press time.

Xiaomi sells smartphones, televisions, laptops, tablets, small appliances and lifestyle products in India, competing with Samsung, LG, Oppo, Vivo and Lenovo, among others.Samsung India’s revenue from operations was ₹82,451 crore in 2021-22, with the cell phone business alone contributing ₹55,201 crore, while LG India’s sales were ₹17,171 crore. LG does not operate in the mobile phone segment.

As per market tracker Counterpoint Research, Xiaomi’s market share in the Indian smartphone market was 20% in calendar 2022 as compared to 24% in 2021.