Stellar performance highlights Xiaomi’s agility and efficiency in business operations
Xiaomi Corporation (“Xiaomi” or the “Group”; stock code:1810), a leading consumer electronics and smart manufacturing company known for its smartphones and smart hardware interconnected by an Internet of Things (“IoT”) platform, has announced its audited consolidated results for the fiscal year ending December 31, 2023 (“the Period”).
In 2023, the Group achieved a total revenue of RMB271.0 billion, with its adjusted net profit surging by an impressive 126.3% to reach RMB19.3 billion. This remarkable increase in adjusted net profit surpassed market expectations and represented the second-highest level of profitability since the Group’s listing. Expenses related to the smart Electric Vehicle (“EV”) business and other new initiatives amounted to RMB6.7 billion (excluding share-based compensation expenses associated with smart EV and other new initiatives, totaling RMB0.8 billion for the year).
During the fourth quarter of 2023, Xiaomi experienced consecutive growth in total revenue, reaching RMB73.2 billion, a notable 10.9% increase year-over-year (“YoY”). Furthermore, its adjusted net profit surged by an impressive 236.1% YoY, reaching RMB4.9 billion.
Throughout 2023, Xiaomi diligently pursued its key operational strategy of “dual emphasis on scale and profitability.” This period also marked the inauguration of the Group’s enhanced corporate strategy known as the “Human × Car × Home” smart ecosystem. Regarding business performance, the first half of 2023 witnessed accelerated profit growth, followed by a quarterly revenue rebound in the latter part of the year. Both metrics underscore the Group’s remarkable resilience and operational efficiency.
In terms of ecosystem development, Xiaomi introduced its new operating system, “Xiaomi HyperOS,” and hosted the Xiaomi EV Technology Launch event. The upcoming Xiaomi SU7 Series product launch event is scheduled for March 28, 2024, aiming to further enrich the Group’s ecosystem portfolio.
Premiumization drives robust demand for flagship smartphone models
In the smartphone sector, Xiaomi achieved global smartphone shipments of around 145.6 million units in 2023, resulting in annual smartphone revenue of RMB157.5 billion and a gross profit margin of 14.6%. According to Canalys, Xiaomi maintained its position as the third-largest global smartphone vendor for three consecutive years. In the fourth quarter of 2023, the Group’s global smartphone shipments reached 40.5 million units, marking a 23.9% year-over-year increase.
Amidst intense market competition, Xiaomi continued its commitment to technological innovation and made significant strides in the premium smartphone market. In 2023, the average selling price (“ASP”) of Xiaomi smartphones in mainland China surged by over 19% year-over-year. Third-party data revealed that Xiaomi captured a 16.9% market share of smartphone sales in the RMB4,000-RMB6,000 price segment in mainland China in 2023, representing a 9.2 percentage point increase year-over-year. Additionally, Xiaomi secured the top spot in sales within the same price segment during the fourth quarter. Notably, premium smartphones (models priced at or above RMB3,000) accounted for over 20% of Xiaomi’s total smartphone shipments in mainland China for the year.
As one of China’s most successful global brands, Xiaomi smartphones maintained a robust presence in the global market last year. According to Canalys, Xiaomi ranked among the top three smartphone vendors in 51 countries and regions globally and among the top five in 65 countries and regions. Specifically, Xiaomi secured the second position in the Middle East and the third position in Latin America, Africa, and Southeast Asia, with notable market share growth in these regions. The Xiaomi 14 series flagship smartphone received widespread acclaim for delivering an exceptional user experience.
Xiaomi’s new retail operating strategy, known as “storefront integration,” yielded positive results, with a significant enhancement in the efficiency of its offline retail stores. Third-party data indicated that Xiaomi’s market share of smartphone shipments through offline channels in mainland China increased to 8.4% over the course of 2023.
The number of connected IoT devices on the AIoT platform hit a record high and garnered widespread acclaim in overseas markets
In 2023, Xiaomi’s revenue from IoT and lifestyle products reached RMB80.1 billion, achieving a record-high gross profit margin of 16.3%. By December 31, 2023, the number of connected IoT devices (excluding smartphones, tablets, and laptops) on Xiaomi’s AIoT platform surged to 739.7 million, marking a 25.5% year-over-year increase. Moreover, the number of users with five or more devices connected to the AIoT platform reached 14.5 million, reflecting a 25.3% year-over-year rise. The monthly active users (MAU) of the Group’s Mi Home App grew to 85.8 million by December 2023.
Xiaomi continued to expand its smart living ecosystem, earning increasing global recognition. Additionally, Xiaomi TV implemented its premiumization strategy, with All View Cloud reporting that Xiaomi’s TV shipments ranked among the top five globally in 2023. The sales of Xiaomi’s smart large home appliances experienced significant growth momentum, with revenue soaring by nearly 40% year-over-year in 2023. Global tablet shipments exceeded 5 million units for Xiaomi, witnessing a remarkable increase of over 50% year-over-year, particularly with annual tablet shipments in overseas markets doubling year-over-year. In the wearable products sector, Xiaomi maintained its industry-leading position through comprehensive features and a diverse product portfolio. According to Canalys, Xiaomi’s wearable band shipments ranked second both in mainland China and globally in 2023, while its TWS earbud shipments secured the second position in mainland China.
Embracing collaboration to fuel sustained growth in the Internet services segment
In 2023, Xiaomi’s internet services achieved unprecedented levels of revenue and gross profit margin, with internet services revenue soaring to RMB30.1 billion and its gross profit margin reaching 74.2%. Leveraging its global presence, Xiaomi’s monthly active users (MAU) worldwide and in mainland China (inclusive of smartphones and tablets) surged to 641.2 million and 155.6 million, respectively.
Through its global partnerships, Xiaomi adopts an open approach, unlocking business monetization potential. In 2023, revenue from its overseas internet services surged by 24.1% year-over-year to RMB8.4 billion, hitting a record high and constituting 28.0% of the Group’s total internet services revenue.
As Xiaomi continued to enhance efficiency across its platform, advertising revenue reached RMB20.5 billion, marking an 11.2% year-over-year increase. Concurrently, with the advancement of its smartphone premiumization strategy, the number of active users and paying users in the Group’s gaming business continued to rise, driving gaming revenue to RMB4.4 billion in 2023, reflecting a 7.0% year-over-year increase.
Setting new goals for 2020–2030, committing to invest in foundational core technologies to emerge as a leader in global cutting-edge technologies
In 2023, Xiaomi announced its new objectives for the period from 2020 to 2030. The Group is steadfast in its commitment to sustainable investments in fundamental core technologies and aspires to emerge as a frontrunner in the rapidly evolving landscape of global cutting-edge technologies. In the same year, Xiaomi’s research and development (“R&D”) expenditures amounted to RMB19.1 billion, representing a 19.2% year-on-year increase. As of December 31, 2023, the Group employed 17,800 R&D personnel, constituting 53% of its total workforce.
On December 28, 2023, Xiaomi unveiled its inaugural electric vehicle (EV) product, the Xiaomi SU7 Series, during the Xiaomi EV Technology Launch event. The event spotlighted Xiaomi EV’s five core technologies, signaling a pivotal step forward in Xiaomi’s new venture.
