Xiaomi: Domestic inventory has stabilized, overseas mobile phone market continued to be affected by the epidemic in the second quarter

On May 20, Xiaomi released its financial report for the first quarter of 2020. According to the financial report, Xiaomi’s operating income in the first quarter increased by 13.6% to 49.7 billion yuan, and gross profit increased by 44.9% to 7.56 billion yuan. However, due to the impact of the new crown epidemic, shipments in the domestic market fell sharply. In the domestic mobile phone market, Xiaomi’s mobile phone shipments fell by 33.8% in the first quarter, and its market share fell to 7% from 10.6% last year. Therefore, Xiaomi’s revenue in the first quarter was mainly supported by overseas markets. From the financial report data, Xiaomi’s total revenue in overseas markets in the first quarter reached 24.8 billion yuan, an increase of more than 47.8% year-on-year, accounting for 50% of Xiaomi’s revenue in the first quarter. Not only has it maintained the number one shipment in the Indian market for 11 consecutive quarters, with a market share of 31.2%, but also increased by 58.3% year-on-year in the European market, gaining a market share of 14.3%.

But now the situation is reversed. In the second quarter, the new crown epidemic broke out in Europe and the United States, and now the number of confirmed cases in India has exceeded 100,000, entering the outbreak stage of the epidemic. Therefore, Xiaomi also suffered heavy losses in overseas markets in the second quarter. Xiaomi President and CFO Wang Xiang said that Xiaomi was at a standstill in the Indian market throughout April. But he is still full of confidence in Xiaomi’s revenue this year. On the one hand, in China, it has been a few months since the full resumption of work, production capacity has been fully restored, and domestic inventories have been completely stable. In terms of overseas markets that Xiaomi is more concerned about, the European market has recovered to 90%, and India has also recovered to 60%. Therefore, Wang Xiang believes that in the third and fourth quarters, Xiaomi will be able to resume normal production and operation in overseas markets.