Xiaomi recorded a 4% fall in revenue in the second quarter, tracking a continued sales decline in China’s handset market.

Sales dropped to C¥67.4-billion, down from ¥70.2-billion in the same quarter a year earlier, but beating analysts’ estimates of ¥65.1-billion.

Net income rose to C¥5.1-billion over the period, an increase of 147% from C¥2.1-billion a year earlier, also beating analysts’ expectations.

Consumer demand in China’s smartphone market continued to shrink in the second quarter, dropping 5% to 64.3 million units, according to research firm Canalys.

Xiaomi’s shipments declined by 19% to 8.6 million, while in major overseas market India, Xiaomi shipments also fell 22% to 5.4 million units, Canalys said.

In light of declining handset sales, Xiaomi is planning to manufacture electric vehicles and has received approval from China’s state planner, Reuters reported this month.