It has been rumored for some time that Xiaomi is at its worst. The company does not sell enough smartphones and struggles to take adequate measures.
The balance sheet of Xiaomi’s latest financial report is negative, as predicted. The turnover of the Chinese company has been in free fall for a year, and according to experts, the situation is not about to get better. This long scarcity jeopardizes the very existence of the company. Xiaomi’s sales (including smartphones) in the fourth quarter of 2022 were down 22.8% year-on-year, and profits tumbled 67.3%.
Faced with such poor results, Lei Jun, CEO of Xiaomi, sent a memo detailing the measures taken to counter the recession. It’s time for budget cuts and savingsmeasures that actually reflect a heavy trend in China where consumption fell in most areas in the fourth quarter, the abrupt lifting of very strict restrictions linked to COVID-19 led to a rapid recovery in infection across the country .
Xiaomi is the smartphone brand most affected by COVID-19, sales plummet by 37%
All smartphone manufacturers saw a drop in sales in the Middle Empire at the end of the year, and according to data published by Canalys, 2022 will go down as a black year for Chinese brands: “Smartphone sales experienced a record drop in 2022, with a 14% drop to 287 million units”. Still according to the research institute, “this is the first time in ten years that deliveries have fallen below 300 million units “.
It’s a very small consolation for Xiaomi, which has been the most impacted by this drop in consumption: the brand has sold 37% fewer smartphones compared to last year. Moreover, the lack of interest in Xiaomi devices seems to have spread to the company’s other big market, India. Not long ago, Xiaomi was the favorite brand of the inhabitants of the largest democracy in the world, in particular because it offers smartphones at a very good price/quality ratio. That said, Indian tastes seem to have changed. They have now set their sights on Samsung, which offers entry-level smartphones (the Galaxy M), mid-range (the Galaxy A) and of course more premium models such as the latest Galaxy S23, a category in which Xiaomi has an image deficit.
In Europe, and despite a drop in sales in 2022, Xiaomi’s position remains a little more comfortable: the Chinese brand is still at the top of sales in Spain, and ranks n°2 in Italy and n°3 in France. The market share of sales in the last quarter of 2022 was thus 17%, compared to 14% a year earlier (source: Counterpoint).
Source: CNCB Indonesia