Xiaomi Suffers Big Jolt Due to Weak Smartphone Demand, Revenue Declines More than 18 Percent

Chinese consumer electronics company Xiaomi’s revenue declined by 18.9 percent in the first quarter. Weak demand for smartphones has had a big impact on the company’s revenue. The company’s sales in the first quarter stood at CNY 59.5 billion (about Rs 4,91,900 crore). This was up from CNY 73.35 billion (about Rs 6,06,400 crore) in the same period last year.

Although, company Its net income rose over 13 percent to CNY 2.86 billion (roughly Rs. 23,600 crore). China’s economy has recovered from the lifting of severe pandemic restrictions late last year, but consumers are cautious about spending. China’s smartphone market has not picked up. In the report of market research firm Canalys, it was told that the total sales of smartphones in China decreased by 11 percent in the first quarter. Xiaomi’s sales in China have decreased by about 20 percent during this period.

India used to be the top overseas market for Xiaomi, but the decline in smartphone sales in the country has caused huge losses to the company. Big companies like Samsung have made a dent in its market share. To increase the demand in India and China, the company has also reduced the prices of many of its smartphones. Xiaomi is also facing legal difficulties in India. Last month, the Karnataka High Court had upheld the Enforcement Directorate’s (ED) freeze on the company’s assets worth over $670 million. The company had challenged the freezing of assets in the court. ED had frozen the assets of the company last year. The ED alleged that Xiaomi had illegally sent money to foreign firms for payment of royalty.

However, Xiaomi denied any wrongdoing. The company had said that the freezing of its assets was unjustified and hindered the company’s operations in the country. Last year, Xiaomi’s lawyer had demanded the court to end this ban. On this, the court had said that the company should provide a bank guarantee similar to the assets withheld earlier.