Chinese smartphone maker Xiaomi on Tuesday reported a lower-than-expected 8.2 percent growth in third-quarter revenue, hurt by sharp competition from domestic rivals Oppo and Vivo.
Refinitiv data shows that sales rose to CNY 78.06 billion (approximately Rs 90,910 crore) in the three months to September 30. Analysts had expected CNY 79.20 billion (about Rs 92,300 crore).
Profit fell 84 per cent to CNY 788.6 million (about Rs 920 crore), which Xiaomi attributed to changes in valuations of companies in its investment portfolio.
Excluding one-time profit and loss, Xiaomi made CNY 5.18 billion (about Rs 6,040 crore) in profit, which is roughly in line with average analyst expectations for CNY 5.09 billion (about Rs 5,930 crore).
Xiaomi’s smartphone revenue grew just 0.4 percent to CNY 47.8 billion (about Rs 55,655 crore).
According to research firm Canalys, overall smartphone sales in China declined by 5 percent in the July-September period.
Xiaomi managed to garner market share this year due to the backlash of its major rival Huawei, which saw its smartphone business tank following US sanctions.
But the company hasn’t grown at the same rate as top-selling rivals Oppo and Vivo, while Honor – a spin-off brand of Huawei – surpassed Xiaomi in the third quarter to become China’s third-largest smartphone maker in terms of market share .
Canalys said Xiaomi’s shipments to China grew just 4 percent year-on-year in the third quarter.
Faced with stiff competition in a shrinking market, the company has responded by making an aggressive push into brick-and-mortar retail, an area in which it has long been lagging behind.
In late October, Xiaomi announced that it had opened its 10,000th store in China, and is committed to tripling that count over the next two to three years.
© Thomson Reuters 2021