Chinese smartphone maker Xiaomi reported a smaller than expected 8.2% rise in third-quarter revenue, hurt by intensifying competition from domestic rivals Oppo and Vivo.
Sales rose to C¥78.06-billion (US$12.22-billion) in the three months to Sept. 30. Analysts had expected C¥79.2-billion, Refinitiv data shows. Profit slumped 84% to C¥788.6-million, which Xiaomi attributed to changes in the valuation of companies in its investment portfolio.
Excluding one-time gains and losses, Xiaomi earned C¥5.18-billion in profit, largely in line with the average analyst expectations for C¥5.09-billion. Xiaomi’s smartphone revenue rose just 0.4% to C¥47.8-billion.
Overall smartphone sales in China fell 5% in the July-September period, according to research firm Canalys.
Xiaomi has managed to gain market share this year due to the retreat of its key rival Huawei Technologies, which saw its smartphone business tank following US sanctions.
But the company has not grown at the same rate as top-selling rivals Oppo and Vivo, while Honor — a spinoff brand from Huawei — surpassed Xiaomi in the third quarter to become China’s third largest smartphone maker in terms of market share.
Xiaomi’s shipments in China grew just 4% year-on-year in the third quarter, Canalys said.
Facing tight competition in a shrinking market, the company has responded by launching an aggressive push into brick-and-mortar retail, a sector it has long lagged in.
In late October, Xiaomi announced it had opened its 10 000th store in China, and committed to tripling that count over the next two to three years. — Reported by Josh Horwitz, (c) 2021 Reuters