Top Performers

ByteDance, Xiaomi, and SHEIN lead the list, showcasing the strength of Chinese brands in the entertainment, electronics, and fashion sectors.

Lenovo, Huawei, and AliExpress also remain strong contenders, emphasizing the diversity and innovation in China’s tech and e-commerce industries.

Sector Growth

Smart devices, automobiles, and e-commerce experienced the fastest brand power growth, with China’s industrial ecosystem and technological innovations providing a competitive edge.

Consumer electronics, entertainment apps, and online fashion account for a substantial portion of the brand power growth.

Brand Expansion

Chinese brands have successfully penetrated international markets, with notable growth in regions like Europe, North America, and Southeast Asia.

Brands like BYD and NIO in the automotive sector, and OPPO and Vivo in consumer electronics, have expanded their global footprints, contributing to the increasing brand power.

Market Trends

The report highlights a shift in consumer preferences towards brands that offer meaningful differentiation and high engagement. Brands that have successfully created unique and compelling brand experiences have seen significant growth.

There has been a notable increase in the brand power of mid-sized brands, indicating a shift from the dominance of top-tier brands to a more competitive landscape.

Notable Brand Highlights

• ByteDance: As a global leader in digital content and social media, ByteDance’s platforms like TikTok have become household names worldwide, driving significant brand recognition and engagement.
• Xiaomi: Known for its high-quality yet affordable electronics, Xiaomi continues to expand its product lines and market reach, solidifying its position as a leading global brand.
• SHEIN: The online fashion retailer has disrupted traditional retail with its fast-fashion model, capturing a significant global market share and expanding rapidly across multiple regions.
• BYD: In the automotive sector, BYD’s focus on electric vehicles has positioned it as a key player in the global shift towards sustainable transportation solutions.
• OPPO and Vivo: These smartphone giants have continued to innovate and expand their international presence, offering advanced technology and appealing to a broad consumer base.

Strategic Insights

The report suggests that the key to the success of Chinese global brands lies in their ability to offer meaningful differentiation and engage deeply with consumers. Brands that can innovate and adapt to changing consumer preferences will continue to thrive in the competitive global market.

• Consumer Engagement: Successful brands have invested in understanding and meeting the functional and emotional needs of their consumers, creating strong brand loyalty and advocacy.
• Technological Innovation: Continuous investment in technology and innovation has enabled Chinese brands to stay ahead of the curve, offering cutting-edge products that resonate with global consumers.
• Global Strategy: A tailored approach to international markets, considering local preferences and cultural nuances, has been crucial for the expansion and acceptance of Chinese brands abroad.

Top 50 Brands from Kantar BrandZ 2024 China Global Brands

1. ByteDance
2. Xiaomi
3. SHEIN
4. Lenovo
5. Huawei
6. AliExpress
7. Haier
8. TEMU
9. OPPO
10. Hisense
11. TCL
12. Tencent
13. vivo
14. Chery
15. BYD
16. Anker
17. DJI
18. MiHoYo
19. OnePlus
20. Kuaishou
21. realme
22. GWM
23. TP-LINK
24. HONOR
25. Lynk & Co
26. MAXUS
27. Insta360
28. WORX
29. Lilith
30. Century Games
31. JAC
32. Roborock
33. CHANGAN
34. Geely
35. Midea
36. DiDi
37. POCO
38. ECOVACS
39. Trip.com
40. Magic Tavern
41. Habby
42. Tsingtao Beer
43. EcoFlow
44. Infinix
45. IGG
46. Kunlun
47. eufy
48. 37Games
49. NetEase Games
50. LightInTheBox

BCG: The most innovative Chinese companies

Strategic Moves: EV Sector and Smartphone Market

Xiaomi’s entry into the smart Electric Vehicle (EV) market and continuous innovation in the smartphone segment have been central to its financial success.

The company retained its position as the third-largest smartphone vendor globally, with a total shipment of approximately 145.6 million units.

A notable strategy was the premiumization of its smartphone offerings, which led to an over 19% increase in the average selling price in mainland China.

Growth in IoT and AIoT Platforms

Revenue from Xiaomi’s IoT and lifestyle products reached RMB 80.1 billion, with a gross profit margin of 16.3%.

The number of connected IoT devices on Xiaomi’s AIoT platform as of December 31, 2023, stood at 739.7 million, a 25.5% increase year-over-year.

This expansion is reflective of Xiaomi’s strong position not only in the domestic market but also internationally, with significant presence and market share growth in various regions including the Middle East, Latin America, Africa, and Southeast Asia.

Future Directions: R&D and Global Technology Leadership

Xiaomi announced its strategic goals for 2020–2030, emphasizing long-term investment in foundational core technologies to assert its leadership in global tech innovations.

The company’s R&D expenses for 2023 amounted to RMB 19.1 billion, a 19.2% increase from the previous year, highlighting its commitment to innovation.

About Xiaomi Corporation

Xiaomi Corporation was founded in April 2010 and listed on the Hong Kong Stock Exchange in July 2018. With its core in smartphones and smart hardware connected by an IoT platform, Xiaomi aims to create quality products that enhance global living standards through innovative technology.

Introduction to Xiaomi e-commerce platform Youpin

The top 5 smartphone vendors in the Chinese market in the fourth quarter of 2022 are Apple (20.6%), Vivo (17.5%), Honor (17.1%), Oppo (15.6%), and Xiaomi (11.6%).

In 2022, the top five smartphone vendors in the year are Vivo (18.6%), Honor (18.1%), Oppo (16.8%), Apple (16.8%), and Xiaomi (13.7%).

China smartphone shipment in Q3 2022; total shipments down 12%

In the third quarter of 2022, the Chinese smartphone market shipped approximately 71.13 million units, down 11.9% year-on-year, according to data from IDC.

Although the decline narrowed for the first time this year, market demand continued to be sluggish following the first half of the year; thanks to the early release of Apple’s iPhone 14 series and the return of Huawei’s Mate 50 series, the domestic smartphone market achieved a quarter-on-quarter growth of 6.0% in the third quarter.

In the third quarter, Vivo returned to first place in China’s domestic smartphone market in terms of shipments, with a market share of 20.0%. The sub-brand iQOO has been continuously recognized by the market with its good product strength and competitive pricing, and its market share has continued to increase, reaching 4.6% of the domestic market in the third quarter.

The Vivo X series continued the excellent performance of the previous quarter and maintained its leadership in the mid-to-high-end market of US$400-600

Honor and Oppo’s shipments ranked 2nd and 3rd in Q3 2022 with 17.9% and 16.3% market share respectively..

Apple’s ranking rose one place, and its market share increased month-on-month to 15.1%, the only top smartphone vendor to maintain year-on-year growth. Although the two models of the iPhone 14 Pro are still very popular, the iPhone 14 and the iPhone 14 Plus, which were only officially shipped in October, have limited appeal to consumers due to their small upgrades compared to the previous generation, while the iPhone 13 series is still favored.

Xiaomi smartphones shipped about 9 million units in the third quarter, accounting for 12.7% of the market.

In Q3 2022, China’s single-quarter shipments of foldable smartphones exceeded 1 million, a year-on-year increase of about 246%, the largest single-quarter shipment in history.

Strong brand and product power helped Huawei to remain in the first position in the domestic foldable screen smartphone market, with a market share of 44.9%.

Samsung’s two new products, Z Fold4 and Z Flip4, have significantly better sales than the previous generation, ranking second, accounting for 22.2% of the market share in the foldable smartphone segment.

The newly released X Fold+ series also helped Vivo to rise to third place in this market, with a market share of 11.9%. Xiaomi’s new MIX FOLD 2 has also won a better market reputation than the previous generation due to its thin and light appearance, and its market share has increased to 9.3%, ranking fourth.

China IoT market to account for 45% of global spend by 2025

China smartphone market share in Q2 2022

In the second quarter of 2022, China’s smartphone shipment reached about 67.2 million units, a year-on-year decrease of 14.7%, according to data from IDC. In the first half of the year, the domestic smartphone shipment totaled about 140 million units, a year-on-year decrease of 14.4%.

Honor ranked first in domestic market shipments in the second quarter, and Vivo ranked second. In the first half of the year, the domestic shipments of foldable smartphones exceeded 1.1 million, with a year-on-year increase of about 70%.

China smartphone market share in Q1 2022; Apple has 16.7% share

In the first quarter of 2022, China’s smartphone market saw about 74.2 million units shipment, a year-on-year decrease of 14.1%, according to data from IDC.

The impact of the continuous rebound of the epidemic on consumers’ budgets and the small upgrading range of new products have led to the continuous downturn of market demand.

The more uncertain overseas market prospect has led many mobile phone manufacturers to adopt more stable and conservative operation strategies, and the market will face great challenges throughout the year.

Oppo ranked first in terms of domestic smartphone shipment market share in the first quarter, followed by Honor, with a very high year-on-year increase, Vivo in the third place, Apple in the fourth place, and Xiaomi in fifth place.

At the same time, the negative impact of the current domestic epidemic on the logistics and supply side of the mobile phone market is relatively controllable, which brings about the delay in meeting part of the demand.

If there is no additional positive stimulus, the capacity of China’s smartphone market may fall below the 300 million mark in 2022, according to IDC.

Vivo has the largest market share of 19.7% by total smartphone sales, according to Counterpoint, followed by Oppo (18%), apple (17.9%), Honor (16.9%), Xiaomi (14.9%), and Huawei (6.2%). In the first quarter, domestic mobile phone sales fell 14% year-on-year to 74.2 million.

There are some new “situations” in this year’s 618 festival.

On the one hand, 618 has become an important opportunity for online shopping of high value and large commodities; on the other hand, it’s also a good time for families to stock up, including the sales of home appliances, 3C, food, beauty products, and etc, which will reach the peak in the first half of the year during 618.

At the same time, many big brands lead the promotion activities, and the promotion discounts also attract many new consumers.

Smart and high-quality differentiated products have become the hot spots trends in the field of home appliances, driven by promotions from both home appliance brands and major e-commerce platforms.

Get an introduction of 618 Shopping Festival here.

80% of the enterprises, surveyed by Chinese media Yibang, participated in Tmall 618, more than half of them invested more than 30% of the 618 budget in Tmall, and 40% of the enterprises surveyed expected that more than half of the 618 sales would come from Tmall.

50% of the enterprises interviewed said that in the past year, Tmall had the highest conversion among all platforms.

CIW Dossier: 618 Shopping Festival provides a perspective of the merchants regarding the performance, advertising budget, and sales expectations on the top e-commerce platforms for 618 shopping festival.

Update (21 June 2021): During this year’s “618” (June 1-20), the State Post Bureau observed more than 6.59 billion pieces of parcels, a year-on-year increase of 24.24%, and an increase of 84.16% compared with the same period in 2019.

China’s total 618 sales in 2021 reached 578.48 billion yuan, an increase of 26.5% YoY, according to data from Syntun. Top 3 channels by total sales are Tmall, JD, and Pinduoduo. Download CIW Dossier: 618 Shopping Festival to get more sales insights.

Alibaba Tmall 618

Over 67% consider Tmall as the top platform for 618.

Among the enterprises surveyed, 51% invested more than 30% of their budgets in tmall. Among them, 10.6% of enterprises allocate more than 80% of the ad budget on the Tmall platform; most allocate 30% to 50% of their total 618 budget on Tmall.

Tmall is giving away RMB10 billion (US$1.57 billion) in consumer coupons and subsidies to help further stimulate post-Covid consumption during Tmall 618 Festival 2021.

According to the official introduction of Tmall, huge discounts will be launched from June 1 to June 20. The specific activities are as follows:

• 20 yuan off every 300 yuan purchase with a total subsidy of 10 billion yuan
• 88vip members will receive additional 520 yuan
• Beauty products at flagship stores are cheaper than duty-free stores

A total of 250,000 brands participate in this year’s Tmall 618, which is 2.5 times that of last year. A total of 13 million products participate in offering discounts, of which 1.4 million are new products.

Tmall merchants almost all started the official live streaming for this year’s 618 shopping festival. About 100 celebrities have locked in Taobao Live to interact with fans. More than 500 CEOs have already made time for Tmall 618 in the agenda to face consumers and offer more brand discounts.

For more established brands, this year’s 618 festival is all about membership engagement. Shoppers who have signed up their favorite brands’ membership on Tmall can expect more additional benefits.

Tmall 618 sales

Millions of loyalty-program members on Tmall helped drive sales for 25 brands, which had each exceeded RMB100 million in transactions on June 1.

As of June 16, brand merchants have acquired nearly 60 million new members during Tmall 618, and some saw more than 50% of the transactions come from members. On June 1 alone, the first day of Tmall 618, there were 25 brands with a turnover of over 100 million yuan from members.

Since the beginning of this year, Tmall has strengthened its membership operation. The exclusive rights and benefits of brand members will be revealed many times in the search results and commodity display pagse, and various tools such as exclusive rights and benefits of members and member interaction are also provided for merchants.

About 20 brand merchants exceeded 10 million member milestone on Tmall. Alibaba didn’t disclose detailed sales value this year.

Tmall Hey Box: Alibaba’s best seller incubator for top brands

JD.com 618

Jingdong announced it will focus on live streaming, short videos, graphics, and quiz to enrich its content marketing for the ongoing 618 Grand Promotion at a kick-off event on May 20 in Beijing.

JD.com will invite more than 300 celebrities, and executives from nearly 600 brand partners to participate in various promotions through live streaming during the promotion.

The company will also invite KOLs and celebrities to create short videos to assist promotion. More than 1,000 professional buyers or KOLs from different categories will be invited to share their favorite products to drive more traffic to JD.com.

JD will hold two galas through live streaming inviting celebrities to bring consumers the festive atmosphere of 618. Leveraging JD and WeChat’s strength, JD will offer live streaming through 10 WeChat accounts.

Over 30,000 new brands and stores were launched during 618 on JD Super, JD’s online supermarket, with over 2.4 million new products.

Shoppers in Nanjing, Jiangsu province are the most active, taking the crown for the largest order volume.

Group buying is most used in Harbin. The average amount per group buy order in the chilly capital of Heilongjiang province in Northeast China this year exceeds RMB 1,000 yuan.

Other top competitors for 618 include Kuaishou, Douyin (TikTok), Pinduoduo, and Meituan.

JD & Douyin (TikTok)

JD signed a 20 billion yuan collaboration agreement with Douyin (TikTok). And, JD’s products are integrated on Douyin in this year’s 618 festival and users can buy JD products on Douyin directly without being redirected to an external page.

JD 618 Sales

In the first three minutes on Jun. 18, JD Super, JD’s online supermarket, saw sales increase 10 times, and in the first two minutes, packaged foods exceeded RMB 300 million yuan while the maternal and baby category exceeded RMB 200 million yuan.

In the first hour on Jun. 18, JD Fresh saw sales increase 70% YOY. Looking at sub-categories, seafood, meat, eggs and poultry, and fruit and vegetables increased 160%, 105% and 80% respectively. Sales of food which require little effort to prepare increased 160%.

JD.com reported a total transaction of over RMB 343.8 billion yuan for its 18-day 618 shopping festival 2021, representing a growth of 27.7% YoY from the same period in 2020 (RMB 269.2 billion yuan).

The pet category has boomed. Post-90s consumers spent an average of RMB 507 yuan per month on pet products in 2021. During 618, smart pet products increased 47% YOY.

Luxury products. Sales of Ferragamo, TOD’s, and BALLY increased 150%, 232% and 600% respectively. In addition, over 20 designer brands saw sales increase over 15 times YoY on JD platform. Consumers continue to embrace the convenience of buying luxury products online.

Sales of imported gaming phones on JD Worldwide increased by nearly three times. Imported dry cat food increased by 108%.

During the 18-day promotion, sales of JD’s online real estate business increased 230% YOY. Sales of housekeeping and cleaning services increased 6.3 times while the order number of car maintenance increased 285%.

Genetic testing service sales increased 23 times, making it the fastest-growing category of healthcare services on Jingdong. Oral health product sales increased 447%.

The top five international brands are Aptamil from Germany, Estee Lauder from the U.S., A2 from Australia, Nintendo from Japan, and Sulwhasoo from Korea. In the fresh food category, 5 million Zespri kiwis and 260,000 durians from Thailand were sold during the 18-day sale.

Social e-commerce Pinduoduo’s road to brand upgrade

618 Sales performance of other brands and platforms

Xiaomi 618

From June 1 to 18, the total GMV across all Xiaomi’s platforms exceeded 19 billion yuan (US$29.37 bn), with a year-on-year growth of 90%.

Its sales volume of smartphones ranked first among all Android phones, the TV category won first place in the sales volume / sales values. Xiaomi 11 Pro is the best selling model on both JD and Tmall.

Xiaomi’s offline sales channels saw 123% YoY increase in total transaction values. Live streaming delivered 1.34 billion yuan in total sales, an 92% growth YoY.

Douyin (TikTok) 618

Douyin 618 started on June 1st and ended at 8 a.m. on June 19th. The top 5 best-selling brands are:

1. Chuchu (new brand)
2. WHOO
3. China Gold
4. Shepinhui
5. Huawei

Apple ranks sixth overall or second after Huawei under “3C electronics” category.

The top five are expected to have sales of more than 100 million yuan. Unfortunately, Apple, Adidas, Nike, and other international brands are not expected to exceed 100 million yuan in sales on Douyin, according to Chinese media Yibang Dongli.

Douyin saw the largest new user growth of over 392% YoY among post-00s, followed by post-90s (+225.9% YoY).

This is Apple’s second year of participation in 618 and saw a sales increase of 16% YoY, according to data from Counterpoint Research.

You can bookmark this page or sign up for our weekly newsletter for future updates.

Social e-commerce Pinduoduo’s road to brand upgrade

Priced at RMB 49,999 (US$7,200), Mi TV LUX Transparent Edition claims to be the world’s first mass-produced transparent TV. With an edge-to-edge transparent self-luminous display transmitting images that seem to be suspended in the air.

When Mi TV LUX Transparent Edition is turned off, it looks like a mirror glass display. The pictures it displays seem to be floating in the air, merging the virtual and the real.

It embs all the processing units in its base stand, preserving the compact shape of the screen and in the meantime brings about countless technical challenges.

Xiaomi has become the world’s first mass producer of transparent OLED TVs, as well as China’s number one OLED Basic Module (OBM) manufacturer.

Its 55″ transparent OLED panel features a 150000:1 static contrast ratio and an infinite dynamic contrast ratio, offering extra rich blacks and unmatched brightness.

Leveraging its DCI-P3 93% color spectrum support, Mi TV LUX Transparent Edition is capable of restoring the awe-inspiring colors that bring images to life. Its 10-bit panel displays 1.07 billion color combinations, an extra-wide color spectrum far beyond what the human eye can perceive.

On top of that, the TV comes with a 120Hz refresh rate and 120Hz MEMC technology, providing consumers with smoother and clearer motion representation. The 1ms fast response rate also makes gaming truly lifelike with smooth controls and low latency.

Similar to its predecessor, it is is also equipped with an AI Master Smart Engine, along with the MediaTek 9650 custom-made TV chip, with over 20 optimization algorithms and dedicated optimization for 5 major use scenarios, the device intelligently refines graphic resolution to create vibrant pictures.

It adopts an aesthetic design that combines a 5.7mm ultra-thin body rectangular screen and a round base, creating an ultra-immersive viewing experience. The base stand is covered with a millimeter-grade finish that resembles compact discs blending perfectly into any surroundings.

The TV is perfect not only for homes, but also for galleries, museums, shopping malls, and theaters.

Mi TV LUX Transparent Edition runs on custom-made MIUI for TV. The user interface – including the Home page, Settings, My App – is specifically designed to better demonstrate the visual features and strength of the transparent screen, creating a unique user experience.

The system also supports Always-On display and allows users to customize display images and texts.

Mi TVs have been ranked at the top for shipments for six consecutive quarters from Q1 2019 to Q2 2020 based on data from AVC. In the past seven years, Mi TV business has grown from an industry newcomer to the first Chinese TV brand with annual shipments exceeding 10 million units.

China smartphone market update »

BCG research has shown that companies doubling down on innovation during downturns—using the opportunity to invest and position for the recovery—outperform over the long term.

Of the 162 companies that have been on BCG’s top 50 “most innovative companies” list over the past 14 years, nearly 30% appeared just once—and 57% appeared three times or fewer. Only 8 companies have made the list every year: Alphabet, Amazon, Apple, HP, IBM, Microsoft, Samsung, and Toyota.

Only 20 Companies (12%) have made the Top 50 List more than 10 times: Daimler, Dell, Facebook, Siemens, Walmart, 3M, GE, Intel, Nike, P&G, BMW, Cisco, Alphabet, Amazon, Apple, HP, IBM, Microsoft, Samsung, Toyota.

Five Chinese companies made it to the Top 50 Global Most Innovative Companies list, including Huawei (6), Alibaba (7), Tencent (14), Xiaomi (24), and JD (31).

While 60% of companies rank innovation as a top 3 priority, not all walk the talk, according to the BCG survey.

Top Mobile Apps in China

The novel coronavirus outbreak has increased the demand for telecommuting and online education, which has led to an increase in demand for tablet computers. However, the factors such as lockdown, manpower, spare parts, logistics, and others have led to the difficulty in meeting the market demand from the factory capacity, and the mainstream brand products are in a shortage for a long time.

IDC believes that affected by the epidemic, telecommuting and online education will be further normalized in the future, and the demand for tablet computers will be significantly increased.

Affected by the epidemic, in the first quarter, the shipments of business tablet markets were significantly reduced, with only 620,000 units shipped, down 47.8% year on year.

Driven by the demand for online education of students, the performance of the consumer market is better than expected, but the production capacity still restricts the supply of products. The shipment volume is about 3.1 million units, down 24.6% year on year.

Huawei’s shipment volume ranks the first, about 1.5 million, with a year-on-year growth of 4.3%, accounting for 40.2% of the market share.

Apple’s followed closely, with 1.31 million units shipped, with a year-on-year drop of 42.5%, accounting for 35.1% of the market share.

Xiaomi’s third, with a year-on-year drop of 31.3%, accounting for 5.5% of the market share; Microsoft and Lenovo are in the fourth and fifth place with shipments of about 120,000 and 60,000 units respectively, with market shares of 3.2% and 1.7% respectively.

Read China’s tablet shipment in the latest quarter here.

Benefiting from the continued expansion in its global smartphone market share, the monthly active users (“MAU”) of MIUI increased to 330.7 million, an increase of 26.7% year-over-year.

As of March 31, 2020, the number of connected IoT devices (excluding smartphones and laptops) on Xiaomi IoT platform reached 252.0 million, an increase of 42.6% year-over-year.

Xiaomi AI assistant Xiao Ai had 70.5 million MAU in March 2020, an increase of 54.9% year-over-year.

Revenue from its internet services segment in Q1 2020 increased by 38.6% year-over-year to RMB5.9 billion, accounting for a record high of 11.9% of its total revenue. Revenue from overseas markets in Q1 2020 totaled RMB24.8 billion, an increase of 47.8% year-over-year, for the first time, accounting for half of its total revenue.

According to Canalys, Xiaomi smartphone shipments in Western Europe increased by 79.3% year-over-year and it attained the largest market share in Spain for the first time.

Xiaomi Smartphone

In Q1 2020, revenue from Xiaomi’s smartphone segment totaled RMB30.3 billion, an increase of 12.3% year-over-year. It shipped 29.2 million units of smartphones in Q1 2020, an increase of 4.7% year-over-year.

According to Canalys, in the first quarter of 2020, Xiaomi ranked 4th globally in terms of smartphone shipments, and Xiaomi’s market share rose to 11.1%. Xiaomi was one of only two of the top five smartphone companies worldwide to maintain year-over-year growth in shipments.

In February 2020, Xiaomi launched Mi 10 and Mi 10 Pro. Shipments of Mi 10 and Mi 10 Pro exceeded 1 million units two months after their launch, enabling the Xiaomi brand to further strengthen its position in the premium smartphone market.

Mi 10 and Mi 10 Pro were launched overseas in late March with prices starting at €799 and €999, respectively. Boosted by Xiaomi’s premium smartphone models, the average selling price (“ASP”) of Xiaomi’s smartphones increased by 7.2% year-over-year in Q1 2020.

The ASP of Xiaomi’s smartphones in mainland China and overseas markets increased by 18.7% and 13.7% year-over-year respectively.

In April 2020, Xiaomi launched Mi 10 Lite Zoom Edition to target the younger consumer segments. With prices starting at RMB2,099, it features a 50x periscope telephoto lens camera and other advanced technologies. Mi 10 Lite 5G was launched in March 2020 in overseas markets, with prices starting at €349.

The Redmi brand continued to introduce highly competitive products at different price points. In March 2020, Redmi launched its flagship K series Redmi K30 Pro and Redmi K30 Pro Zoom Edition, sporting premium features including the Snapdragon 865 processor, LPDDR5, and UFS 3.1, while also featuring a pop-up camera, allowing Xiaomi’s customers to enjoy a full flagship experience at a reasonable price.

On the back of the highly popular Redmi Note 8 series, the second best-selling smartphone model globally in Q1 2020 according to Canalys, Xiaomi launched Redmi Note 9S and Redmi Note 9 Pro in overseas markets, carrying on the ultimate price-performance value proposition of the Redmi brand.

In April 2020, Xiaomi released MIUI 12, the latest version of Xiaomi’s smartphone operating system. Equipped with Xiaomi’s proprietary Mi Light Cone Animation Framework, MIUI 12 offers remarkable animation and a stunning visualized user interface.

In addition, MIUI 12 has introduced a privacy and data protection framework, which enables users to have full visibility of sensitive data retrieval, take control over app permissions, and mask their identity information to remain incognito. MIUI 12 is the world’s first mobile operating system to pass the TÜV Rheinland “Enhanced Privacy Protection for Android Systems” test.

Xiaomi IoT

In Q1 2020, revenue from Xiaomi’s IoT and lifestyle products segment was RMB13.0 billion, increase of 7.8%. Xiaomi’s smart TV business continued to maintain its leading position in both mainland China and overseas markets.

In Q1 2020, despite the overall decline in TV shipments globally due to the pandemic, Xiaomi’s global shipments of smart TVs still increased by 3.0% year-over-year to 2.7 million units.

According to All View Cloud (“AVC”), in Q1 2020, Xiaomi’s TV shipments in mainland China ranked 1st for five consecutive quarters and its global TV shipments ranked among the top five.

In March 2020, Xiaomi launched Redmi Smart TV Max 98”, priced from RMB19,999 (about US$2,815), significantly lower than other ultra-large TVs, bringing high-end TVs to the mass market.

In Q1 2020, Xiaomi continued to expand Xiaomi’s IoT product portfolio and promote the interconnectivity of Xiaomi’s AIoT platform.

In February 2020, Xiaomi introduced Mi AIoT Router AX3600, a WiFi 6 enabled AIoT router, which greatly improves upstream and downstream network speeds, making Xiaomi the first brand in China to support WiFi 6 technology from terminals to routers.

In addition, Xiaomi also launched Mi 65W Fast Charger with GaN Tech, Redmi Smart Display 8” and Mi Bluetooth Speaker with Wireless Charging, all of which enjoyed widespread popularity.

The sales of Xiaomi’s routers increased by 124.0% year-over-year in Q1 2020 and according to AVC, ranked 2nd in mainland China in terms of online router shipments. Sales of Xiaomi’s Xiaomi TWS Earphones, Mi Band, Mi Electric Scooter and Mi Robot Vacuum Cleaner increased by 619.6%, 56.0%, 40.7% and 40.0% year-over-year, respectively.

According to Canalys, Xiaomi ranked 1st in terms of wearable band shipments and 3rd in terms of True Wireless Stereo (“TWS”) earbuds shipments globally in 2019. According to iResearch, Xiaomi also ranked 1st in terms of electric scooter shipments globally in 2019.

Xiaomi Internet Services

In Q1 2020, revenue from Xiaomi’s internet services segment reached RMB5.9 billion, representing an increase of 38.6% year-over-year, accounting for a record high of 11.9% of Xiaomi’s total revenue.

User activity and time spent on Xiaomi’s devices increased in Q1 2020. In March 2020, the MAU of MIUI increased by 26.7% year-over-year to 330.7 million, while the mainland China MAU of MIUI reached 111.5 million.

In Q1 2020, advertising revenue was RMB2.7 billion, an increase of 16.6% year-over-year.

In Q1 2020, online gaming revenue increased by 80.5% year-over-year to RMB1.5 billion, mainly due to the fast-growing online gaming market in mainland China and higher online gaming average revenue per user from Xiaomi’s premium smartphone users.

In Q1 2020, internet services revenue outside of advertising and gaming from mainland China smartphones, including those generated from the Youpin e-commerce platform, fintech business, TV internet services and overseas internet services, increased by 71.5% year-over-year and accounted for 38.1% of Xiaomi’s total internet services revenue.

Xiaomi’s Youpin e-commerce platform continued to broaden its offerings and provide uninterrupted services to customers. The number of new users increased significantly in Q1 2020, laying a strong foundation for further expansion.

In March 2020, MAU of Xiaomi’s smart TVs and Mi Box reached 30.4 million, representing an increase of 46.8% year-over-year. As of March 31, 2020, the number of paid subscribers increased by 53.7% year-over-year to 4.3 million.

In Q1 2020, the MAU of Mi Browser on Xiaomi smartphones in the aggregated overseas market ranked 1st among all browsers. These initiatives increased Xiaomi’s average revenue per user in the overseas market.

Introduction to Xiaomi’s e-commerce platform Youpin

For Q4 2019, Xiaomi achieved the highest year-over-year growth in smartphone shipments among the top five smartphone companies, according to Canalys.

In December 2019, monthly active users (“MAU”) of MIUI increased by 27.9% year-over-year to 309.6 million. As of December 31, 2019, the number of connected IoT devices (excluding smartphones and laptops) on its IoT platform reached 234.8 million, an increase of 55.6% year-over-year.

Xiaomi’s AI assistant had 60.4 million MAU in December 2019, an increase of 55.7% year-over-year. Xiaomi further expanded its global footprint with overseas revenue growing significantly, accounting for 44.3% of its total revenue in 2019.

Overseas revenue was RMB91.2 billion, an increase of 30.4% year-over-year. As of December 31, 2019, its products were sold in more than 90 countries and regions. According to Canalys, its smartphone shipments ranked the top five in 45 countries and regions in 2019.

In 2019, Xiaomi’s research and development expenses increased by 29.7% year-over-year to RMB7.5 billion. As of December 31, 2019, its total cash resources amounted to RMB66.0 billion.

Xiaomi Smartphone

In 2019, revenue from its smartphone segment reached RMB122.1 billion, an increase of 7.3% year-over-year. In Q4 2019, revenue from its smartphone segment was RMB30.8 billion, an increase of 22.8% year-over-year.

Xiaomi captured over 9% of the global smartphone market share in Feb 2020. Find out more here.

For 2019, Xiaomi shipped approximately 124.6 million units of smartphones, while in Q4 2019, shipments were approximately 32.6 million, an increase of 30.5% year-over-year.

In 2019, its dual-brand strategy showed encouraging results.

The Xiaomi brand focused on pioneering advanced technologies and successfully established a solid foothold in the premium smartphones segment.

The Redmi brand, on the other hand, continued to pursue the ultimate price-performance ratio across different price points and make innovative technologies readily accessible to the mass market.

With the launch of Mi 9 Pro, Mi CC9 Pro and the world’s first smartphone featuring surround display, Mi MIX Alpha, Xiaomi developed strong technological fundamentals in wireless charging, imaging, 5G technology, and next-generation smartphone design and are well poised to capture opportunities brought about by 5G technology in 2020.

In February 2020, Xiaomi launched its flagship 5G smartphone models the Mi 10 and Mi 10 Pro.

According to Canalys, the Redmi Note 7 was the best-selling smartphone model among all models made by Chinese companies in terms of global shipments in 2019.

In December 2019, Redmi launched its first 5G smartphone, the Redmi K30 5G, with pricing starting from RMB1,999, making it the first 5G smartphone priced below RMB2,000. Xiaomi believes the competitive pricing will accelerate the adoption of 5G smartphones by a larger population, enabling more people to enjoy leading technologies.

In 2019, the average selling price of its smartphones increased by 2.2% compared to 2018 and the gross margin of the smartphone segment increased to 7.2% from 6.2% in 2018.

In 2020, Xiaomi will continue to focus on 5G smartphones development and strengthen its presence in the premium smartphones segment, which will lead to further ASP expansion.

IoT and lifestyle products

In 2019, revenue from its IoT and lifestyle products segment was RMB62.1 billion, an increase of 41.7% year-over-year.

In Q4 2019, revenue from its IoT and lifestyle products segment was RMB19.5 billion, an increase of 30.5% year-over-year.

AIoT market in China has reached 380.8 billion yuan in 2019, with an increase of over 47%; check out the forecast for 2020-2022 here.

Xiaomi achieved leading positions in key IoT products that are controlling hubs for its AIoT platform, including TVs, wearable devices and smart speakers.

In 2019, its global TV shipments reached 12.8 million units, an increase of 51.9% year-over-year. In mainland China, its annual smart TV shipments exceeded 10 million units, which Xiaomi believe set an unprecedented record in China’s TV industry.

According to AVC, its TV shipments ranked first in mainland China and fifth globally in 2019. Xiaomi also ranked first in India in terms of smart TV shipments for seven consecutive quarters as of Q4 2019 according to IDC.

According to Canalys, Xiaomi is the world’s largest smart wearable device (including smartwatch and wristband) brand in 2019 by shipments. Xiaomi also ranked the top three in terms of smart speaker shipments in mainland China in 2019 according to IDC. Check out China’s wearable device in 2019.

Xiaomi also continued to expand its product portfolio in key smart home products by launching new products including washing machines and refrigerators.

In 2019, its IoT products won over 50 renowned design awards around the world. Recently, its Mijia Smart Baseboard Heater won the 2020 Red Dot: Best of the Best Award and Mijia Handheld Wireless Vacuum Cleaner won the 2020 iF Design Gold Award.

Xiaomi Internet services

In 2019, revenue from internet services reached RMB19.8 billion, an increase of 24.4% year-over-year. For the fourth quarter, revenue was RMB5.7 billion, an increase of 41.1% year-over-year.

In December 2019, MAU of MIUI increased by 27.9% year-over-year to 309.6 million with mainland China’s MAU of MIUI standing at 109.0 million.

In Q4 2019, advertising revenue was RMB3.0 billion, an increase of 17.8% year-over-year.

The MAU of its news feed service increased by 32.6% year-over-year to 78.7 million in December 2019. This was further bolstered by its efforts in increasing monetization through the optimization of its recommendation algorithms and diversification of its advertising customer base by expanding into more vertical industries.

In Q4 2019, online gaming revenue increased by 44.4% year-over-year to RMB874.4 million, mainly due to the strong performance of many popular games operating on its platform.

Diversification of its internet services has become a key growth driver of its internet services revenue.

In Q4 2019, its internet services revenue outside of advertising and gaming from mainland China smartphones, including those generated from the Youpin e-commerce platform, fintech business, TV internet services and overseas internet services, increased by 112.6% year-over-year and accounted for 43.0% of its total internet services revenue.

In 2019, the GMV of its Youpin e-commerce business grew rapidly, with annual GMV surpassing RMB10.0 billion. During the year, Xiaomi has enlarged its merchandise portfolio, insisted on selecting high-quality goods that appeal to its customers and increased its efforts in new customer acquisition.

As a result, the number of active buyers on Youpin showed strong growth momentum.

In Q4 2019, its fintech business delivered strong revenue growth, mainly driven by the growth in its consumer finance business. In January 2020, Xiaomi Finance successfully obtained a consumer-financing license from the China Banking and Insurance Regulatory Commission.

Xiaomi will continue to strengthen risk controls and strictly follow regulatory rules to maintain the healthy growth of its fintech business.

In Q4 2019, its TV internet services grew quickly primarily driven by the growth of its subscription business. In December 2019, MAU of its smart TVs and Mi Box were approximately 27.7 million, an increase of 49.1% year-over-year.

As of December 31, 2019, Xiaomi had 3.7 million paying subscribers, an increase of 62.9% year-over-year. Lastly, its overseas internet services business also witnessed rapid growth.

In India, 10 of its mobile apps recorded MAU of over 50 million in December 2019, including its Mi Browser, Mi Video and GetApps (an overseas version of Mi App Store).

Overseas markets

In 2019, overseas revenue was RMB91.2 billion, an increase of 30.4% year-over-year.

In Q4 2019, overseas revenue increased by 40.7% year-over-year to RMB26.4 billion, accounting for 46.8% of total revenue for the period. In Q4 2019, Xiaomi was the largest smartphone brand in India by shipments for the tenth consecutive quarter, capturing a market share of approximately 28.7%, according to IDC.

In Western Europe, Xiaomi continued to expand its market share.

According to Canalys, its smartphone shipments in the region grew 115.4% year-over-year in Q4 2019. In Spain, Xiaomi was the second-largest smartphone maker by shipments, achieving 65.7% year-over-year growth with a 22.8% market share.

Xiaomi ranked fourth in both France and Italy, with its smartphone shipments increasing by 69.9% and 206.2% year-over-year, respectively.

In 2019, its overseas IoT revenue grew rapidly, driven by the robust sales of its best-selling IoT products in overseas markets, including its smart TVs, wristbands, TWS earphones, and electric scooters.

In 2020, Xiaomi plans to step up its efforts in promoting its popular IoT products to more countries and regions.

Impact of the COVID-19 outbreak

In terms of the supply chain, Xiaomi experienced a temporary disruption in production in February and March 2020, due to the extended shutdown of Chinese factories.

However, its production capacity has recovered to 80%–90% of normal levels as of the date of this announcement. For its mainland China market, during the peak of the outbreak, its offline sales were affected as most of its stores were closed or operated at shortened hours with significantly lower customer traffic.

However, Xiaomi was comparatively less impacted due to its strength in online channels.

Xiaomi has seen smartphone shipments rebounding quickly in late March 2020, showing the resilience of smartphone demand.

For its overseas market, given that the epidemic is still affecting countries and regions around the world as of the date of this announcement, Xiaomi is closely monitoring and assessing its impact, which will likely defer the overall consumption in the affected countries.

While its overseas demand will undoubtedly be affected, particularly in the second quarter of 2020, Xiaomi believes the overall impact is currently manageable.

Investments

As of December 31, 2019, Xiaomi had invested in more than 290 companies with an aggregated book value of approximately RMB30.0 billion.

Xiaomi expanded its investment into supply chain companies to strengthen its partnership with key component suppliers, enhance its sourcing and manufacturing abilities in advanced technology and facilitate the development of the industries, in particular around 5G, IoT, AI, integrated circuits, advanced manufacturing, and industrial internet.

An increasing number of its investee companies have gone public.

In February 2020, Roborock, one of its investee companies, was successfully listed on the Science and Technology Innovation Board of Shanghai Stock Exchange (“STAR Market”) in China, becoming its first ecosystem investee company to list on the STAR Market.

In Q4 2019, net gains on disposal of investments (after tax) were RMB869.0 million.

Mi 10 Pro achieved a score of 124 for camera and 76 for audio on DXOMARK, ranking the flagship smartphone first in both the camera and audio categories.

The Mi 10 series starts from RMB 3,999 (US$572), and will be available in mainland China starting February 24, 2020.

The Mi 10 series is powered by the Qualcomm Snapdragon 865. As the flagship mobile platform of the year, the Snapdragon 865 is the leading 5G platform to-date, offering staggering multi-gigabit 5G connectivity, it also delivers top-notch performance in terms of CPU, GPU, camera, and AI capabilities.

The Snapdragon 865 uses a three-cluster architecture and has a maximum clock speed of 2.84GHz. With the new Kryo 585 being based on the Cortex-A77 architecture, which is the latest generation of ARM processor architecture, CPU performance is increased by 25% compared to its predecessor.

The new Adreno 650 graphics processor also has a 25% upgrade in rendering speed, with a decreased energy consumption of 35%.

The fifth-generation AIE artificial intelligence engine enables AI capabilities that is 2x more powerful than the predecessor, which provides Mi 10 with better performance in videography, imagery, and AI processing applications.

Mi 10 series comes with the latest LPDDR5, supporting a maximum transmission rate of 5500Mbps, and boasting up to 50% improvement in performance while still remaining power efficient.

Paired with the industry’s fastest UFS 3.0 flash memory, and adopting the new Write Turbo technology, Mi 10 series can achieve a maximum sequential write speed of up to 730MB per second.

The series also uses the latest Wi-Fi 6 technology, with speeds up to 9.6Gbps which provides an 2.7x increase compared to Wi-Fi 5, also supporting 8×8 MU-MIMO technology, the download speed for multiple connected devices increases by 100%.

In terms of heat dissipation, Mi 10 series offers the most sophisticated cooling system to date: a 3000mm² super large vapor chamber, graphene, and 6-layer graphite structure. It also includes copper foil heat sinks and thermal gel to improve the overall cooling capability of Mi 10, and ensures the device stays cool for extreme performance and 5G high-speed download.

Mi 10 series features a 108MP main camera with a 1/1.33” ultra large sensor. It is also among the first to support 8K ultra-clear video recording in 7680×4320 ultra-high-resolution, users can also capture ultra-clear 33MP photos while recording in 8K by simply tapping on the screen. With both OIS and EIS support, Mi 10 series ensures stable video capture even in extreme conditions.

In addition to a 108-megapixel main camera, Mi 10 Pro also includes a classic 50mm portrait lens with 2x optical zoom, a telephoto lens with 10x hybrid zoom, and a 20MP ultra wide-angle lens, each of which is of flagship level, and with the camera system supported by dual OIS.

Aside from camera, Mi 10 series offers by far the strongest audio configuration and capabilities of any Xiaomi device. The audio system is equipped with symmetrical dual 1216 linear speakers with large 1.2cc sound cavity, which makes the output volume 100% higher than its predecessor.

Mi 10 series offers AI audio tuning to adapt to the different usage and playback scenarios for better sound quality, delivering an unmatched immersive audio experience.

Mi 10 series sports a 6.67 ”AMOLED curved DotDisplay, with up to 800nit typical and a peak brightness of up to 1200nit, and a contrast ratio of up to 5,000,000:1, which delivers lively and vivid images.

The display also supports 90Hz refresh rate and 180Hz touch sampling rate, delivering an unprecedented smooth experience.

Mi 10 Pro also offers the highest level of color accuracy in the industry, with a JNCD <0.55 and △E <1.1. Each device undergoes careful calibration with seventy-two color analyzers and two spectroradiometers in eighteen production lines prior to sales.

This ensures Mi 10 series displays can accurately reproduce colors as they are intended.

In addition, Mi 10 Pro comes with a 4500mAh high-capacity battery and features 50W wired fast charge, 30W wireless fast charge, and up to 10W reverse charging. The 50W wired fast charge supports charging to 100% in 45 minutes while the 30W wireless charging can charge to 100% in 65 minutes. A 65W charging adapter comes in-box.

Mi 10 comes in glossy black, blue, and gold, with a thickness of 8.96mm and bottom bezel as small as 3.32mm. Mi 10 Pro, on the other hand, features a matte design in blue and white with AG coating for a more premium hand feel and minimizes the chance of leaving fingerprints behind.

Other notable features on the Mi 10 series include in-screen fingerprint sensor for quick unlock, IR blaster for easy home appliances remote control, multifunctional NFC for swift payment, and a linear haptic motor for realistic touch response.

Mi 10 starts at RMB 3,999 and will officially launch on February 14 in three variants: 8GB + 128GB, 8GB+256GB, and 12GB+256GB.  Mi 10 Pro starts at RMB 4,999 and will be available in three variants: 8GB+256GB, 12GB+256GB, and 12GB+512GB.

Mi AIoT Router AX3600: The first router to support Wi-Fi 6 and Qualcomm platform

The event also introduced Xiaomi’s first router that supports Wi-Fi 6 technology – the Mi AIoT Router AX3600.

Packed with Qualcomm’s quad-core processor, six-channel quality signal amplifiers, and an independent AIoT smart antenna, the Mi AIoT Router AX3600 provides blazing connection speeds of up to 3000 Mbps, leading the router products in the 5G era.

It also supports network connection in one simple click for Xiaomi smart products. Priced at RMB 599, Mi AIoT Router AX3600 is available for purchase at Xiaomi authorized channels, starting February 13.

Mi Bluetooth Speaker with Wireless Charging

Xiaomi introduced a Bluetooth speaker that combines wireless charging for smartphones and Bluetooth speakers.

The device incorporates a built-in wireless charging function and a 20° elevation design on its front, allowing users to charge their smartphones while consuming media with ease.

Aside from charging Mi 10, Mi 10 Pro, and Mi 9 Pro with a maximum 30W wireless charging, Mi Bluetooth Speaker is also capable of charging Qi compatible devices, such as Samsung S10 and iPhone 11.

Mi Fast Link Technology is also enabled to ensure smooth connection with NFC and MIUI smartphones. Moreover, when the device is charging Mi 10 or Mi 10 Pro, the smartphone will automatically switch on XiaoAi AI ambient display after the screen is locked, turning the smartphone and the speaker into a XiaoAi AI assistant with touch screens.

Priced at RMB 249, Mi Bluetooth Speaker with Wireless Charging will be available for purchase from mi.com and Mi Home beginning February 18.

Xiaomi Financial Results

In Q3 2019, Xiaomi achieved RMB53.7 billion in total revenue, representing an increase of 5.5% YoY. Gross profit increased to RMB8.2 billion, representing a year-over-year increase of 25.2%. Adjusted net profit increased by 20.3% year-over-year to RMB3.5 billion. As of September 30, 2019, Xiaomi’s total cash resources amounted to RMB56.6 billion.

In Q3 2019, Xiaomi continued to execute Xiaomi’s “Smartphone + AIoT” dual-engine strategy and it yielded positive results. Xiaomi’s user base and the number of devices connected to Xiaomi’s platform have continued to grow robustly.

In September 2019, monthly active users (“MAU”) of MIUI reached 291.6 million, representing an increase of 29.9% over the corresponding period in the previous year.

The number of connected IoT devices (excluding smartphones and laptops) on Xiaomi’s IoT platform reached 213.2 million as of September 30, 2019, representing year-over-year growth of 62.0%. Meanwhile, Xiaomi’s AI assistant had 57.9 million MAU in September 2019, representing a year-over-year increase of 68.6%.

Xiaomi’s products were well received by consumers during the Double 11 Singles’ Day shopping festival in China. Xiaomi’s total payment for sales across all platforms and channels surpassed RMB6.1 billion in China.

Xiaomi’s flagship store on the Tmall platform achieved a total payment for sales of more than RMB2.1 billion, ranking 1st among all brand flagship stores on Tmall for the 7th consecutive year since Xiaomi first participated in the Singles’ Day shopping festival in 2013.

In October 2019, Xiaomi made its debut on the Fortune Future 50 list, ranking 7th, and was the second-highest ranked among all Chinese companies on the list. Furthermore, Xiaomi ranked 57th on Forbes’ Top 100 Digital Companies List.

Xiaomi Smartphones

Xiaomi’s smartphone segment recorded RMB32.3 billion in revenue in Q3 2019. Xiaomi’s smartphone sales volume in Q3 2019 reached 32.1 million units. According to Canalys, Xiaomi ranked 4th globally in terms of smartphone shipments in the third quarter of 2019, with a market share of 9.2%.

Following the introduction of Mi MIX 3 5G in Europe in February 2019, Xiaomi launched Xiaomi’s first 5G smartphone in China, Mi 9 Pro 5G, in September 2019, marking another milestone in its 5G technology development. Mi 9 Pro 5G was well received by the market.

In 2020, Xiaomi expects to launch ten or more 5G smartphone models to capture the 5G smartphone replacement cycle, starting from China.

In Q3 2019 , Xiaomi continued to advance technologically and create breakthroughs. In September 2019, Xiaomi released Xiaomi’s concept smartphone, Mi MIX Alpha, a futuristic 5G smartphone featuring the world’s first surround display and a screen-to-body ratio of 180.6%, demonstrating Xiaomi’s continuous efforts in exploring cutting-edge technology. Xiaomi introduced Mi CC9 Pro in November 2019, which is the first mass-produced smartphone to carry a 108MP penta-camera.

It is also capable of up to 10x hybrid zoom and up to 50x digital zoom. Mi CC9 Pro Premium Edition achieved a DXOMARK score of 121 for overall camera performance, ranking 1st globally at the time of launch. It also achieved a DXOMARK score of 102 in the video category, the highest among all smartphones at the time of launch. Xiaomi also released an overseas version of this smartphone, Mi Note 10, in Spain in November 2019.

According to Canalys, Redmi Note 7 was the best-selling smartphone model among all models made by Chinese companies in terms of global shipments in Q3 2019. Xiaomi launched Redmi Note 8 and Redmi Note 8 Pro in August 2019, Redmi 8A and Redmi K20 Pro Premium Edition in September 2019, and Redmi 8 in October 2019.

The average selling price (“ASP”) of Xiaomi’s smartphones in mainland China continued to increase in Q3 2019, achieving year-over-year growth of 4.6%. The ASP of Xiaomi smartphones in overseas markets recorded a quarter-over-quarter increase of 7.8% and a year-over-year decrease of 4.1% in Q3 2019. The decrease was primarily due to a different product mix compared to the third quarter of 2018.

The gross profit margin of Xiaomi’s smartphone segment further increased from 8.1% in the second quarter of 2019 to 9.0% in Q3 2019.

Xiaomi IoT and lifestyle products

In Q3 2019, the revenue of Xiaomi’s IoT and lifestyle products segment rose by 44.4% year-over-year to RMB15.6 billion.

Xiaomi’s smart TV business maintained its leading edge in both mainland China and overseas markets. In Q3 2019, global shipments of Xiaomi smart TVs reached 3.1 million units, representing a year-over-year growth of 59.8%.

According to All View Cloud (“AVC”), Xiaomi ranked 1st in terms of TV shipments in mainland China in Q3 2019, with a market share of 16.9%. With Xiaomi’s consistent efforts to expand Xiaomi smart TV business globally, Xiaomi ranked top five in terms of global TV shipments in Q3 2019 according to AVC.

Xiaomi further expanded Xiaomi’s product offering in the high-end segment and launched Mi TV 5 and Mi TV 5 Pro in November 2019. Mi TV 5 Pro utilizes a 4K quantum dot display panel that covers a 108% NTSC wide color gamut and comes with HDR10+ support and built-in MEMC technology, enabling a premium picture quality.

Xiaomi has positioned large home appliances as strategic components of Xiaomi’s AIoT strategy. Focused on cutting-edge innovation, superior design and interactive experiences, Xiaomi is dedicated to enhancing the connectivity and compatibility of the whole suite of Xiaomi’s smart home appliances.

Following the successful launch of Xiaomi’s air conditioners and washing machines, Xiaomi launched Mi Refrigerator in October 2019, further expanding Xiaomi’s spectrum of products in the large home appliances category.

In October 2019, Redmi introduced the RedmiBook 14 Ryzen Edition and Xiaomi introduced Mi Laptop 15 Pro, both of which enjoyed widespread popularity.

Following the success of Xiaomi’s Mi Band, Xiaomi launched Xiaomi’s new wearable product, Mi Watch, in November 2019. Equipped with an independent eSIM and supported by MIUI For Watch, Mi Watch is dedicated to bringing Xiaomi’s customers the ultimate user experience in both hardware and software.

Many of Xiaomi’s IoT products have been well received by the market. For example, according to AVC, for the nine months ended September 30, 2019, Xiaomi’s fresh air ventilator was the top fresh air ventilator in mainland China in terms of several measurement aspects, including online brand sales, online single-product sales volume and value, while Xiaomi’s Mi Water Purifier ranked top two in terms of online sales value.

Xiaomi’s AIoT products won multiple domestic and international awards. Xiaomi’s Mi AI Touchscreen Speaker won multiple design awards, including the International Design Excellence Award (IDEA), the Red Dot Design Award, and the Good Design Award.

Meanwhile, Xiaomi’s Mi Router Mesh received a 5-star recommendation in the China Mobile 2019 Smart Hardware Quality Report, and Xiaomi’s Mi Electric Scooter Pro won the Expert Imaging and Sound Association’s Best Product (Electric Vehicle) Award.

Xiaomi Internet services

In Q3 2019, Xiaomi’s user base continued to expand. The MAU of MIUI increased by 29.9% year-over-year to 291.6 million in September 2019. Xiaomi’s mainland China MAU of MIUI remained flat year-over-year in September 2019 at 112.8 million.

The MAU of Xiaomi’s smart TVs and Mi Box achieved 50.1% year-over-year growth, reaching 23.9 million in September 2019.

Revenue from Xiaomi’s internet services segment grew by 12.3% year-over-year to RMB5.3 billion in Q3 2019. Advertising revenue decreased by 9.0% year-over-year to RMB2.9 billion, which was mainly due to pre-installation revenue decreasing to RMB376.6 million from RMB825.4 million YoY. This decrease partly reflected a shift in advertiser preference for non-pre-installation advertising. Excluding preinstallation revenue, advertising revenue grew 6.9% year-over-year in Q3 2019.

In Q3 2019, Xiaomi continued to diversify Xiaomi’s advertiser base by expanding into more vertical industries, including financial services and small- and medium-sized enterprises, to develop a more robust and healthier advertising business.

Revenue from gaming increased by 26.0% year-over-year to RMB822.3 million in Q3 2019. Xiaomi’s other internet value-added services grew by 78.2% year-over-year to RMB1.6 billion, primarily as a result of the strong growth in revenue of Xiaomi’s fintech business and Youpin e-commerce platform.

In Q3 2019, Xiaomi launched MIUI 11, featuring a minimalistic design with efficient office and smart travel application suites. Combining the improvements in efficiency with the new optimized modern user interface design, MIUI 11 provides an all-rounded upgrade to Xiaomi’s users.

With Xiaomi’s continuous efforts to diversify Xiaomi’s internet services business, Xiaomi’s internet services revenue outside of advertising and gaming from mainland China smartphones, including those generated from the Youpin e-commerce platform, fintech business, TV internet services and overseas internet services, increased by 87.8% year-over-year and accounted for 37.2% of Xiaomi total internet services revenue in Q3 2019 .

In Q3 2019, the gross merchandise volume of Xiaomi’s Youpin e-commerce platform maintained a strong year-over-year growth primarily due to the expansion of Xiaomi’s product categories on the platform and the continued growth and diversification of Xiaomi’s user base.

In Q3 2019, the revenue from Xiaomi’s fintech business increased by 91.2% year-over-year to RMB1.0 billion. The increase was mainly due to the strong growth achieved in Xiaomi consumer loan business.

In Q3 2019, Xiaomi’s revenue from TV internet services continued to grow, driven by the increase in both subscription revenue and advertising revenue. In September 2019, the MAU of Xiaomi’s smart TVs and Mi Box reached 23.9 million, representing a year-over-year increase of 50.1%.

As of September 30, 2019, Xiaomi had more than 3.2 million paid subscribers, representing year-over-year growth of 68.8%.

Xiaomi’s AIoT Strategy

In Q3 2019, Xiaomi continued to execute Xiaomi’s “Smartphone + AIoT” dual-engine strategy and maintained Xiaomi’s leading position.

As of September 30, 2019, the number of connected IoT devices (excluding smartphones and laptops) on Xiaomi’s IoT platform reached approximately 213.2 million, representing a year-over-year increase of 62.0%.

The number of users who have five or more devices connected to Xiaomi’s IoT platform (excluding smartphones and laptops) increased to 3.5 million, representing a year-over-year increase of 78.7%.

In September 2019, Xiaomi’s AI assistant had 57.9 million MAU with a year-over-year increase of 68.6% and continued to be one of the most used AI voice interactive platforms in mainland China. Meanwhile, Xiaomi’s Mi Home app had 32.1 million MAU in September 2019, with 63.0% of these active users being non-Xiaomi smartphone users.

Xiaomi continued to strengthen the connectivity across devices on Xiaomi’s AIoT platform. Xiaomi smartphones, smart TVs, AI speakers, and smartwatches can all act as controlling hubs for Xiaomi’s AIoT platform.

Xiaomi Smartphones: Mi CC9 Pro, Mi Note 10

Mi CC9 Pro

Following the groundbreaking concept phone Mi MIX Alpha, Mi CC9 Pro sets another important milestone for the industry to become the world’s first mass-produced smartphone shipping a 108MP camera.

The 108MP main camera offers a 1/1.33″ large image sensor – twice as large as the mainstream 48MP cameras. It supports OIS and features an industry leading resolution of 12032 x 9024.

It also incorporates a 4-in-1 (1.6μm) Super Pixel with the latest RAW multi-frame noise reduction algorithm to capture rich detail, even in low-light conditions.

Mi CC9 Pro sports a penta camera setup that includes a 12MP telephoto camera, a 5MP telephoto camera, a 20MP ultra wide-angle camera, and a 2MP macro camera.

The 12MP telephoto camera supports 2x optical zoom with dual PD autofocus, while the 5MP telephoto camera supports 10x hybrid zoom. All cameras cover day-to-day needs for smartphone photography from landscape, portraits, close-up shots, and even for 1.5cm super macro photography.

A premium offering – the Mi CC9 Pro Premium Edition was also announced at launch. It comes with an 8P lens that produces images that are clearer and of higher definition. It also surged to the top of DxOMark camera rankings with an overall score of 121 and broke the record for video segment with a world’s highest score of 104.

On the hardware front, the Mi CC9 Pro dresses to impress with the flagship two-sided curved screen and a 6.47’’ 19.5:9 Full-HD Display. Adopting a COP sealing technology, Mi CC9 Pro has a 3.43mm chin bezel, making it the most narrow Xiaomi smartphone apart from the Mi MIX Alpha. Mi CC9 Pro also supports 30W fast charge, which brings its 5260mAh high-capacity battery to 100% under 65 minutes.

Mi CC9 Pro and Mi CC9 Pro Premium Edition will be priced at RMB 2799 and RMB 3499 respectively. Three color variants Aurora Green, Glacier White and Midnight Black will be available on official Xiaomi channels in Mainland China starting November 11, 2019.

Mi Note 10

Xiaomi also announced the return of its Mi Note series with Mi Note 10, the latest device of its premium flagship lineup.

Xiaomi’s Mi Note 10 encompasses five different lenses – a 108MP wide-angle lens, 5MP telephoto lens, 12MP telephoto lens, 20MP ultra wide-angle lens, and a macro lens. This setup enables a seamless zoom experience from 0.6x to 50x without compromising image quality.

With the Samsung ISOCELL Bright HMX 108MP sensor, Mi Note 10 features the highest resolution of any smartphone on the market – 12032 x 9024.

For the first time ever, the 108MP camera can produce billboard-level prints up to 4.24 meters high. The device offers a 1/1.33″ large image sensor that supports 4-in-1 pixel binning to capture more detail in low-light conditions, while the 4-axis OIS enables unmatched clarity.

Photography enthusiasts who look to produce the most natural looking portrait photos will be pleased with the Mi Note 10’s 12MP 2x telephoto lens at 50mm focal length, which is one of the most popular focal lengths used by professional portrait photographers. Under low light conditions, the 1.4μm large pixel size and dual PD autofocus allows for sharper and brighter portraits.

The 5MP 5x telephoto lens is also capable of 10x hybrid and 50x digital zoom to complete the epic zoom range. In addition, the lens is equipped with OIS and a f/2.0 aperture for better images under non-optimal lighting environments.

With its 117 degrees field of view, the 20MP ultra-wide angle lets users capture epic landscapes and large group photos without having to cut people out; while the macro lens offers autofocus for closeups images.

Also presented today is Redmi Note 8T, the latest smartphone to join the Redmi family. The device offers a 48 MP quad camera setup and features high-end specifications, starting from €179.

Mi Watch

Featuring a flagship 1.78’’ AMOLED square screen, Mi Watch offers an immersive viewing experience with a 326 PPi pixel density and an elegant four-side curved design.

Being the world’s first wearable to sport a Qualcomm®️ Snapdragon WearTM 3100, Mi Watch guarantees a robust device performance and low power consumption. The device also boasts independent speakers, NFC function, and supports WiFi and Bluetooth connection.

Equipped with a built-in six-axis sensor and a 3rd generation heart rate monitor (HRM) sensor, Mi Watch is able to precisely detect complex motion gestures and heart rate fluctuations during physical activities.

With these capabilities, Mi Watch offers up to 10 pro-sport modes such as outdoor running, outdoor biking, open water swimming, and mountain climbing. It also works with professional sports analytics provider FirstBeat to closely track users’ sleep quality, blood pressure levels, heart rate, and physical energy.

Mi Watch also comes with eSIM, a built-in chip that allows users to make phone calls and connect to the internet effortlessly without inserting a physical nano-SIM. With such technology, users can either share the same phone number with their smartphone for seamless connectivity or have a new private number for the Mi Watch exclusively.

Adding on to all these flagship features, Mi Watch provides a revolutionary UI experience with the MIUI For Watch system, offering 100+ dial plate selections and 40+ of the most used apps for downloading. It also remains an open system for developers to create tremendous possibilities.

XiaoAi AI Assistant can be activated for users to easily use voice commands for music playback, phone calls, and navigation. When connected to the Xiaomi AIoT system, Mi Watch is capable of operating thousands of Xiaomi smart home appliances.

Along with the standard Mi Watch, Mi Watch Special Edition was also announced, with a limited offering of 30,000 units worldwide.

Featuring a major upgrade to blue sapphire glass as the screen material, the Mi Watch Special Edition adds a classy, aesthetic touch to your day-to-day look. The package also comes with an in-box magnetic charger, an adapter, laser-printed limited product code, suede cleaning cloth, certification for limited collection, and a personalized nameplate.

Mi Watch will be available at RMB 1999 for the Black and Silver color variants. Pre-orders start on November 5 via official Xiaomi channels in Mainland China. Mi Watch Special Edition will be priced at RMB 2999 and has a limited number of 30,000 units worldwide, pre-orders will start around mid-December.

Mi TV 5

The newly released Mi TV 5 series features a 1.8mm ultra-narrow metal bezel and a 5.9mm slim body, delivering a compact, futuristic design that is perfectly fit for a modern home.

On the performance front, Mi TV 5 series adopts a flagship 12nm T972 chip that is jointly developed by Xiaomi and Amlogic.

It has a core frequency of up to 1.9GHz, allowing a 63% improvement of overall performance compared to its predecessor, while concurrently supporting 8K content decoding. For storage, Mi TV 5 and Mi TV 5 Pro both provide industry-leading large memory capacity of 3GB+32GB and 4GB+64GB respectively.

Mi TV 5 Pro boasts a 4K quantum dot TV panel and an amazing 108% NTSC color spectrum compared to the industry standard of 72%.

It also meets one of the most outstanding HDR standards – HDR 10+ to provide a stunning graphic display for both game players and Blu-ray lovers. MEMC technology is also adopted to ensures a smooth and high-definition motion picture playback.

All Mi TV 5 variants are enabled with a Far-field Voice Recognition technology that allows users to wake theXiaoAi AI Assistant from a distance without the need of a remote control. Hence, it only takes a simple voice command to conduct film searching, weather checking, or smart device operations.

Built-in microphones are located right in the middle of the bottom frame and are on stand-by 24 hours a day, ensuring the Mi TV 5’s “XiaoAi AI speaker” is ready even during screen-saver mode.

Mi TV 5 Pro 55’’, 65’’ and 75’’ variants will be priced at RMB 3699, RMB 4999, and RMB 9999 while Mi TV 5 55’’, 65’’, 75’’ priced at RMB 2999, RMB 3999, and RMB 7999 respectively. Pre-orders start at 18:00 China time on November 5, and sales on official Xiaomi channels in China will start on November 11.

Xiaomi’s monthly active users (“MAU”) of MIUI reached 278.7 million, an increase of 34.7% YoY. AI assistant “ Xiao’ai ” had 49.9 million MAU; Xiaomi ranked 4th globally in terms of smartphone shipments; and, global shipments of its smart TVs reached 2.7 million units.

Xiaomi financial performance

In the second quarter of 2019, Xiaomi recorded RMB52.0 billion in revenue, representing an increase of 14.8% over the corresponding period of 2018. Gross profit margin increased to 14.0% from the 12.5% achieved in the corresponding period of 2018. Adjusted Net Profit increased by 71.7% to RMB3.6 billion. As of June 30, 2019, its total cash resources amounted to RMB51.1 billion.

The “Smartphone + AIoT” dual-engine strategy that Xiaomi adopted at the beginning of the year has borne fruit. Its user base has continued to expand and the number of devices connected to its platform has continued to grow.

In June, 2019, monthly active users (“MAU”) of MIUI reached 278.7 million, an increase of 34.7% over the corresponding period of 2018. The number of connected IoT devices (excluding smartphones and laptops) on its IoT platform reached approximately 196 million units as of June 30, 2019, representing year-over-year growth of 69.5%.

Meanwhile, its AI assistant “ Xiao’ai ” had 49.9 million MAU in June 2019, representing a year-over-year increase of 88.3%.

Xiaomi has won a number of international recognitions in 2019 to date. It took Xiaomi only 9 years to debut on the Fortune Global 500 list of 2019, becoming the youngest company on the list this year. Furthermore, Xiaomi made it into the 2019 BrandZ Top 100 Most Valuable Global Brands ranking for the first time, ranking 74th with a brand value of US$19.8 billion. Xiaomi has also been recognized as one of the 2019 Forbes China’s 50 Most Innovative Companies.

Xiaomi Smartphones

Its smartphone segment recorded RMB32.0 billion in revenue in the second quarter of 2019, representing an increase of 5.0% over the corresponding period of 2018. Its smartphone sales volume in the second quarter of 2019 reached 32.1 million units.

According to Canalys, Xiaomi ranked 4th globally in terms of smartphone shipments during the second quarter of 2019 and its market share in terms of global smartphone shipments increased from 9.5% in the second quarter of 2018 to 9.7% in Q2 2019.

Both its Xiaomi brand, which focuses on pioneering advanced technologies, establishing itself in the mid- to high-end markets, and building online and offline new retail channels, and its Redmi brand, which is positioned to pursue the ultimate price-performance ratio and focus on online channels have performed well.

After the launch of the new flagship model K20 series under the Redmi brand, Xiaomi has established a comprehensive Redmi smartphone product portfolio that covers a wide price range. In particular, the global sales volume of the Redmi Note 7 series reached 20 million units as of the date of this announcement, achieving this milestone in only around 7 months since its launch on January 10, 2019.

In addition, the global shipments of the K20 series already recorded more than 1 million units within the first month of its launch.

On July 2, 2019, Xiaomi launched the CC series under the Xiaomi brand, which includes Mi CC9, Mi CCe9, and Mi CC9 Meitu Edition. The CC series is positioned as a fashionable series targeting younger customers. The CC series places an emphasis on being visually appealing in terms of both form and function, offering stylish product design and enhanced photography experience.

Mi CC9 Meitu Edition is a joint development with Meitu Inc. which specifically targets the female user market. Leveraging its product development and supply chain management capabilities, as well as Meitu’s image-related algorithms and its deep understanding of female users, the Mi CC9 Meitu Edition offers outstanding photographic experiences and builds a solid foundation for its ongoing expansion into more diversified user markets.

Its products have been strongly recognized by the market as a result of the successful implementation of its multi-brand strategy. The average selling price (“ASP”) of its smartphones has continued to increase, achieving year-over-year growths of 13.3% and 6.7% in mainland China and overseas markets, respectively. In Q2 2019, the revenue generated by smartphones sold for RMB2,000 or more accounted for 32.3% of the total revenue of the smartphones segment.

Following the granting of 5G business licenses in mainland China, 5G technology has officially started to be implemented for commercial use. The commercialization of 5G technology could potentially lead to a new smartphone replacement cycle and boost the overall demand of the domestic market.

Xiaomi established a research and development team back in 2016 for advanced research on 5G technology and are now well-prepared for the commercialization of 5G. The Mi MIX 3 5G, its first 5G model was already available in various European countries, and its second 5G smartphone model will also be launched in China in the second half of the year.

The gross profit margin of its smartphone segment increased from 3.3% in the first quarter of 2019 to 8.1% in Q2 2019. During the early transition period from 4G to 5G technology, Xiaomi will continue to invest in research and development of relevant technologies while remaining prudent with its cash flows and profitability.

IoT and lifestyle products

In Q2 2019, the revenue of the IoT and lifestyle products segment rose by 44.0% to RMB14.9 billion over the corresponding period of 2018. Its smart TV business continues to have a leading edge in both mainland China and overseas markets.

Global shipments of its smart TVs reached 2.7 million units, representing year-over-year growth of 41.1%. According to AVC, Xiaomi ranked 1st in terms of TV shipments in mainland China for the six months ended June 30, 2019.

Xiaomi ranked 1st in terms of smart TV shipments in India for five consecutive quarters as of the second quarter of 2019. With its efforts in expanding its smart TVs globally, Xiaomi achieved a top 5 position in terms of global TV shipments for the six months ended June 30, 2019, according to AVC.

Xiaomi has positioned large home appliances as an important element of its AIoT strategy. Xiaomi will focus on innovation and product design, offering intelligent user experiences and promoting the enhanced connectivity and compatibility of its smart home appliances.

For the six months ended June 30, 2019, the shipments of its air conditioners amounted to approximately 1 million units. At the same time, Xiaomi has also entered the smart kitchen appliances market.

In Q2 2019, Xiaomi continued to enrich its IoT product portfolio. The market share of its laptops has been steadily increasing following the launch of its new products. On May 28, 2019, the Redmi brand introduced its first 14” slim notebook and enjoyed widespread popularity.

According to IDC Consulting (Beijing), the market share of its laptops in mainland China in terms of shipments increased from 5.5% in the second quarter of 2018 to 8.7% in Q2 2019. Its Mi Band ranked 1st in the global wearables market in terms of shipments in the first quarter of 2019.

Meanwhile, the Mi Band 4 recorded shipments of more than 1 million units within 8 days of its launch on June 14, 2019. In addition, Xiaomi has also launched several new products, including its AI Translator “Xiao’Ai Teacher”, Mi Smart Door Lock and Mi Smart Combo Wash and Dryer Pro, which are supported by its AI assistant “Xiao’Ai”. These product launches illustrated its continuous
the pursuit of excellent product design and quality.

Xiaomi has continued to improve the device-to-device interaction and enhance its users’ smart home experience. For example, when a user opens the door through a Mi Smart Door Lock, its
AI assistant will welcome him/her home. At the same time, the Mi Air Purifier, Mi Air Conditioner, and other smart devices could be switched on automatically. The Mi Smart Combo Wash Dryer Pro can be operated by the voice control function through its AI assistant

Xiaomi Internet services

In the second quarter of 2019, its user base continued to expand. The MAU of MIUI rose by 34.7% year-over-year from 206.9 million in June 2018 to 278.7 million in June 2019. The MAU of MIUI in mainland China was 115.1 million in June 2019. The MAU of its smart TVs and Mi Box achieved 53.8% year-over-year growth, reaching 22.6 million in June 2019.

Revenue from its internet services segment grew by 15.7% year-over-year to RMB4.6 billion in Q2 2019. Advertising revenue slightly decreased by 0.6% year-over-year to RMB2.5 billion due to a soft mainland China advertising market, particularly due to reduced advertising spending from other internet companies which contributed a meaningful portion of its advertising revenue.

Over the course of the last few quarters, Xiaomi has continued executing its strategy to diversify its advertising customer base. Through expanding into more vertical industries, such as finance and small and medium-sized enterprises, Xiaomi is developing a more robust and healthy advertising business to capture more future growth.

Revenue from gaming decreased by 4.1% year-over-year to RMB675.1 million. However, its gaming gross profit increased to RMB408.2 million in Q2 2019 from RMB212.5 million in Q2 2018, representing an increase of 92.1%. Its gaming gross profit margin increased from 30.2% in Q2 2018 to 60.5% in Q2 2019 as Xiaomi optimized its gaming distribution and had higher gaming revenue growth from content providers with a high gross profit margin. Its other internet value-added services grew by 89.9% year-over-year to RMB1.4 billion, primarily due to the strong growth in revenue from its fintech business and Youpin e-commerce platform.

Introduction to Xiaomi’s e-commerce platform Youpin

Xiaomi has been focusing on enriching its internet services and content to strengthen its advertising business. Many of its internet services are leading on its smartphones, its Mi App Store, Mi Browser, Mi Security, and Mi Music ranked 1st and Mi Video ranked 2nd in their respective categories in mainland China in terms of MAU on its smartphones in June 2019.

Furthermore, its news feed service ranked 1st in terms of MAU on its smartphones in mainland China, reaching 71.0 million MAU in June 2019, representing a year-over-year increase of 31.0%. Its search service also ranked 1st on its smartphones in mainland China in terms of search query volume in the second quarter of 2019.

Xiaomi developed various entry points for its search function, including browser, negative one screen, launcher searchbox, and its AI assistant. Leveraging its increasingly diversified services and
multi-dimensional data, Xiaomi is able to further improve its algorithm and enhance its users’ experience. Services like news feed and search allow Xiaomi to diversify its advertising customer base.

Internet service revenue outside of advertising and gaming from mainland China smartphones, including those generated from the Youpin e-commerce platform, fintech business, TV internet services and overseas internet services, increased by 108.8% over the corresponding quarter in 2018, accounting for 36.0% of the total internet service revenue in the second quarter of 2019.

For the six months ended June 30, 2019, the gross merchandise volume (“GMV”) of its Youpin e-commerce platform grew to RMB3.8 billion, an increase of 113.9% YoY. In June 2019, more than 65% of Youpin’s GMV came from non-Xiaomi smartphone users.

Revenue from its fintech business increased to RMB792.0 million in Q2 2019, representing year-over-year growth of 62.7%. Its current fintech business focuses on consumer loans and supply chain financing. With its sophisticated risk management model and technology capability, and extensive user base and supply chain partners, Xiaomi had a solid business foundation and potential to grow. In the meanwhile, Xiaomi is also actively exploring other fintech business opportunities.

Its TV internet services are also fast-growing and increasingly diversified. TV internet services revenue is mainly generated from advertising, paid subscription, and app distribution. In June 2019, Xiaomi had over 3 million paid subscribers, representing a year-over-year increase of 83.1%. Xiaomi offers a variety of membership services, including video membership, sports memberships, and children membership. Its subscription services have expanded to other non- Xiaomi TVs to serve a wider user base.

Xiaomi’s Overseas markets

With the overseas expansion of its smartphone business, its overseas internet service revenue also increased significantly. Xiaomi continued to build and strengthen its service offerings in overseas markets. In June 2019, its browser ranked 1st among all browsers in India in terms of MAU on its smartphones. In the second quarter of 2019, the average revenue per user (“ARPU”) in overseas markets recorded a year-over-year increase of 133.0%.

Xiaomi has maintained strong growth in the overseas markets in the second quarter of 2019. Its revenue from the overseas markets grew 33.1% year-over-year to RMB21.9 billion in the second quarter of 2019.

Xiaomi will continue to build and expand its new retail channels in the overseas markets. As of June 30, 2019, there were a total of 520 Mi Home stores overseas, representing a 92.6% year-over-year growth, of which 79 stores were located in India. Furthermore, in India, Xiaomi had more than 1,790 Mi Stores that cater to tier two and rural areas of India as of June 30, 2019.

According to Canalys, in the second quarter of 2019, Xiaomi ranked among the top five in over 40 countries and regions in terms of smartphone shipments. According to IDC, its smartphones have ranked 1st in India in terms of shipments for eight consecutive quarters. In addition, according to Canalys, in Q2 2019, Xiaomi ranked 4th in terms of smartphone shipments for Western Europe, representing a year-over-year increase of 53.2%.

Xiaomi ranked 2nd in open market channels in Spain in terms of smartphone shipments in Q2 2019. Xiaomi has been developing operator channels in Europe. Its flagship smartphones, such as Mi MIX 3 and Mi 9 series, have been launched in operator channels in the United Kingdom, France, Spain, Italy, and Switzerland.

AIoT

In Q2 2019, Xiaomi continued the implementation of its “Smartphone + AIoT” dual-engine strategy and its AIoT platform continued to maintain its leading position. As of June 30, 2019, the number of connected IoT devices (excluding smartphones and laptops) on its IoT platform reached approximately 196 million units, representing a year-over-year increase of 69.5%.

The number of users who have five or more devices connected to Xiaomi’s IoT platform (excluding smartphones and laptops) increased to approximate 3 million, representing a year-over-year increase of 78.7%. In the six months ended June 30, 2019, the shipments of its AI speakers exceeded 4 million units.

In June 2019, its AI assistant had 49.9 million MAU, making it one of the most used AI voice interactive platforms in China. In June 2019, 45% of its AI speaker MAU used voice control to interact with their IoT devices at least once that month.

Xiaomi continued to open up its AIoT platform to build a more vibrant AIoT ecosystem. Its Mi Home app had 30.4 million MAU in the second quarter of 2019 and more than half of the MAU in mainland China were from non-Xiaomi smartphone users. Xiaomi will continue to invest in the development of its open AIoT platform to attract more third parties and users to join this AIoT platform.

The Group’s AIoT Strategy committee will further enhance the development of its AIoT technology, by building a comprehensive AIoT ecosystem, strengthening its research and development, and realizing synergies across business units to improve its smart devices’ connectivity and user experiences.

For example, Xiaomi continues to develop technologies for files to be seamlessly transferred between its smartphones and laptops, as well as for intelligent projection to be enabled between its smartphones and smart TVs.

Xiaomi’s Investments

As of June 30, 2019, Xiaomi invested in a total of over 270 companies with an aggregated book value of RMB28.7 billion, representing year-over-year growth of 20.8%. Xiaomi also expanded its investment into supply chain companies to strengthen its partnership with key component suppliers and to enhance its abilities in advanced technology sourcing and manufacturing.

As of the date of this announcement, Xiaomi invested in 12 supply chain companies. Among those, three of the investee companies were listed on the STAR Market in China. Xiaomi believes its investments not only allowed Xiaomi to establish close partnerships with the investee companies but also provided Xiaomi with recurring investment income.

In the second quarter of 2019, Xiaomi generated net gains on disposal of investments (after tax) of RMB551.8 million.

Over the recent years, smart products appeared in many daily life scenarios, smart home living, including smart TV, vacuum robot, smart lock, and smart speakers, are expected to receive good market recognition in 2019.

In 2019, the price range of the smartphone that majority of China internet users purchase is between 2001 and 3000 yuan (US$291-436) as well as 3001 and 5000 yuan (US$436-727).

Out of the brands that online users consider on top of their minds, Huawei ranks the first. While Xiaomi and Apple take the second and the third place, Xiaomi is favored by male and Apple is favored by the female.

According to Tencent research by Penguin Intelligence, Huawei enjoys the highest loyalty, 62.2%. When replacing the smartphone, 69.4% of online users are expecting better battery performance; also, the core features such as operating system experience and hardware performance are priorities.

When making a purchase, more online users prefer online purchase to offline purchase (54.8% vs 45.2%). The percentage of males, younger customers who do not deny the idea of purchasing used phones are higher.

Regionally, Apple users in first-tier cities take the highest percentage, and user ratio of Xiaomi in tier-2 cities, Huawei in tier-3 cities are the highest. OPPO and Vivo’s user ratios are higher in lower-tier cities.

In 2019, 88.5% of online users plan to purchase at least one smart device of which smartphone accounts the most, with 66.7% of online users are thinking of buying one. Users’ purchase intention for other mobile devices such as smartwatches is 25.6% in term of penetration ratio.

Over the recent years, smart products appeared in many daily life scenarios, smart home living, including smart TV, vacuum robot, smart lock, and smart speakers, are expected to receive good market recognition in 2019.

When choosing smart devices, 80.2% online users prioritize the practical features while the price is an aspect that nearly sixty percent of online users will consider. Other than that, branding, convenience, technical features are considered by over forty percent of China online users.

Premium features as branding, technical features, and design are significantly less considered compared to practicality and price. online users’ purchase of smart devices is more rational in 2019, which can even be regarded as a sign of consumption downgrade.

Among the most expected smart products, security and vacuum products rank the first and the second respectively. Other than that, 56.5% of online users are looking forward to household products that can aromatically adjust the living environment.

For online users more willing to buy foreign smart products, 51.2% of them are considering smartphone and over thirty percent of them are considering foreign smart locks, vacuum robot, and smart TV.

When making a purchase of smart products, online users in the tier-1 cities are most willing to buy foreign products, accounting for 55.8%. In general, the difference in preference of foreign smart devices among online users of different cities is not significant.

Although the willingness of tier-4 and lower-tier cities online users for buying foreign smart products is the lowest, the percentage is still close to the half, reaching 48.5%.

Meanwhile, the younger the online users, the more recognition for foreign products, the percentage of post-00s who are more willing to buy foreign products is as high as 61%.

This is an excerpt from eBook Purchase Intention of Smart Device in China

In the first quarter of 2019, Xiaomi recorded RMB43.8 billion in revenue, representing an increase of 27.2% over the corresponding period of 2018. Profit for Q1 2019 grew to RMB3.2 billion and Adjusted Net Profit grew 22.4% year-on-year to RMB2.1 billion.

Xiaomi continued to focus on their “Smartphone + AIoT” dual-engine strategy and greatly expanded the number of devices connected to its platform.

As of March 2019, monthly active users (“MAU”) of MIUI reached 260.9 million, representing a year-on-year increase of 37.3%. The number of connected IoT devices (excluding smartphones and laptops) on Xiaomi IoT platform has reached approximately 171.0 million units, representing year-on-year growth of 70.0%.

Xiaomi AI assistant “Xiao Ai Tongxue” had over 45.5 million MAU in March 2019, representing a year-on-year increase of 247.2%.

Xiaomi Smartphones

Xiaomi smartphone segment recorded approximately RMB27.0 billion in revenue in Q1 2019, representing an increase of 16.2% over the corresponding period of 2018. Its smartphone sales volume in Q1 2019 reached 27.9 million units.

According to Canalys, Xiaomi ranked 4th globally in terms of the volume of smartphone shipments during the Q1 2019.

In Q1 2019, Xiaomi released several smartphone models under each brand, including Mi 9, Mi 9 SE, Redmi Note 7, Redmi Note 7 Pro and Redmi 7. The market response was positive with regard to the respective product launches.

In particular, Redmi Note 7, which was released on January 10, 2019, and launched in overseas markets on February 28, 2019, was in high demand. The shipments of its Redmi Note 7 series exceeded 4 million units in Q1 2019.

In addition, its new flagship model Mi 9 series, which was released on February 20, 2019, and launched in overseas markets shortly thereafter, has also been very popular to date. The Mi 9 is powered by the Snapdragon 855 processor, equipped with an ultra-wide-angle AI triple camera with the main camera using a 48-megapixel Sony sensor, and has an all-curved holographic back design.

The Mi 9 is also the world’s first smartphone to feature 20W wireless quick charging. As of March 31, 2019, the supply of Mi 9 series smartphones surpassed 1.5 million units while the sales volume of Mi 9 series smartphones exceeded 1.5 million shortly thereafter in early April 2019.

Xiaomi’s smartphone market share in mainland China increased for three consecutive months throughout the first quarter of 2019, from 9.5% in January 2019 to 11.8% in March 2019.

Moreover, due to the continuous optimization of Xiaomi’s product portfolio, the average sales price (“ASP”) of its smartphones in mainland China and in overseas markets achieved year-on-year growth of 29.9% and 12.1%, respectively, in Q1 2019.

Xiaomi IoT and lifestyle products

During Q1 2019, the revenue of the IoT and lifestyle products segment rose by 56.5% to RMB12.0 billion over Q1 2018, maintaining a rapid growth rate.

Xiaomi’s smart TVs continued to lead the way, ranking 1st in terms of shipments for two consecutive quarters in mainland China. As of March 31, 2019, global shipments of Xiaomi’s smart TVs reached 2.6 million units, representing a nearly two-fold year-on-year growth of 99.8%.

Xiaomi has also recently launched a variety of large home appliances. In April 2019, it released Mi Mural TV, Mi LED TV 4 Pro and Mi Internet Vertical Air Conditioner C1, all of which have been perceived positively by the market.

Mi Mural TV is its first smart TV that uses far-field microphone technology, enabling users to activate voice control features even at a distance. Users can switch on their smart TVs, search for movies, check the weather, and control other smart home products without the need of a mic-enabled remote control.

Xiaomi’s smart TVs can also display smart device notifications and act as control hubs for compatible smart home products.

During Q1 2019, Xiaomi’s ecosystem products, such as Mi Band, Mi Air Purifier and Mi Electric Scooter, continued to enjoy wide popularity and achieved robust sales growth.

Xiaomi also launched a variety of other popular products this year, such as Mi Smart Door Lock, Mi Wireless Power Bank, Mi Photo Printer, Mi Wireless Car Charger, and Mi AirDots.

Xiaomi’s Redmi brand also launched various IoT and lifestyle products, such as Redmi AirDots. The designs of Xiaomi’s IoT products have continued to receive significant market recognition.

In Q1 2019, Xiaomi won 25 international design awards. For example, Xiaomi’s Mi Washing Machine was awarded the iF Design Award and Xiaomi’s Mi Smart Door Lock was awarded the Red Dot Award.

Xiaomi Internet Services

Revenue from Xiaomi’s internet services segment grew 31.8% year-on-year to RMB4.3 billion in Q1 2019. Advertising revenue grew 21.8% year-on-year to RMB2.3 billion.

Revenue from gaming grew 6.8% year-on-year to RMB823.1 million. Xiaomi’s other internet value-added services grew 96.4% year-on-year to RMB1.2 billion, primarily due to the rapid growth in revenue from Xiaomi’s internet finance business and Youpin e-commerce platform.

The MAU of MIUI rose 37.3% from 190.0 million in March 2018 to 260.9 million in March 2019. The MAU of MIUI in mainland China also achieved quarter-on-quarter growth. The MAU of Xiaomi’s smart TVs and Mi Boxes achieved 55.1% year-on-year growth, reaching 20.7 million in March 2019.

Xiaomi has continued to diversify Xiaomi’s internet services revenue. Internet services revenue outside of advertising and gaming from China smartphones, including those generated from TV internet services, overseas internet services, Youpin e-commerce, and internet finance business, accounted for 31.8% of the total internet services revenue in Q1 2019, representing year-on-year growth of 167.3%.

Xiaomi’s overseas internet services revenue grew rapidly as they continued to strengthen Xiaomi’s internet services in key markets. For example, we have been actively developing Xiaomi’s internet finance business in India and launched Mi Pay, a payment product, in India in March 2019.

The number of connected devices (excluding smartphones and laptops) on Xiaomi’s IoT platform reached approximately 150.9 million units in 2018, a year-on-year increase of 193.2%. Xiaomi AI assistant Xiaoai had been installed and activated on more than 100 million smart devices as of December 31, 2018, and had over 38.8 million monthly active users in December 2018. 

Xiaomi recorded 174.9 billion yuan (US$26.04bn) in revenue for the year ended December 31, 2018, a year-on-year increase of 52.6%. Revenue from international markets grew 118.1% year-on-year to 70.0 billion yuan (US$10.42bn), accounting for 40.0% of the total.

• 65.1% of revenues were from smartphones (US$16.94bn),  an increase of 41.3% year-on-year;
• 25.1% of revenues were from IoT and lifestyle products (US$6.52bn), an increase of 86.9% year-on-year;
• 9.1% of revenues were from internet services (US$2.38bn), an increase of 61.2% year-on-year.

For the fourth quarter of 2018, revenue increased by 26.5% to 44.4 billion yuan (US$6.61bn) on a year-on-year basis.

Revenue from the smartphones segment increased by 7.0% year-on-year to 25.1 billion yuan, driven by growth in the ASP of smartphones.

Revenue from IoT and lifestyle products segment increased by 75.4% year-on-year to 14.9 billion yuan, primarily due to the rapid growth in demand of smart TVs and several sought-after ecosystem products such as Mi Band, Mi Electric Scooter, and Mi Robot Vacuum Cleaner.

Revenue from internet services segment increased by 39.3% year-on-year to 4.0 billion yuan, primarily due to growth in the advertising business.

For the year ended December 31, 2018, Xiaomi’s gross profit increased by 46.4% to 22.2 billion yuan (US$3.31bn) from 15.2 billion yuan for the prior year. Overall, Xiaomi’s gross margin decreased from 13.2% to 12.7%.

• The gross profit margin from the smartphones segment decreased from 8.8% to 6.2%.
• The gross profit margin fromIoT and lifestyle products segment increased from 8.3% to 10.3%, mainly due to the improvement of gross margin in smart TVs.
• The gross profit margin from internet services segment increased from 60.2% to 64.4% as the percentage of revenue from higher margin advertising business was larger.

For the fourth quarter of 2018, gross profit increased by 55.5% to 5.7 billion yuan. The overall gross margin increased from 10.4% to 12.7%.

• The gross profit margin from the smartphones segment decreased from 7.3% to 6.1%.
• The gross profit margin from IoT and lifestyle products segment increased from 3.6% to 10.6%.
• The gross profit margin from internet services segment increased from 57.4% to 62.9%.

Smartphones

Smartphones segment generated approximately 113.8 billion yuan (US$16.94bn) in revenue, an increase of 41.3% year-on-year. Compared with the 4.1% year-on-year decline of shipments in the global smartphone market, according to IDC, Xiaomi smartphone sales volume reached 118.7 million units, an increase of 29.8% over the prior year period.

To strengthen its market position in the mid- to the high-end range smartphone market in mainland China, Xiaomi launched several flagship smartphones such as Mi 8 and Mi MIX 3, which enjoyed widespread popularity. The average selling price (ASP) of Xiaomi smartphones in mainland China increased by 17.0% year-on-year.

In the fourth quarter of 2018, the revenue generated by smartphones sold for 2,000 yuan or more accounted for 31.8% of the total revenue of the smartphones segment. As Xiaomi shipped increasingly more smartphones in developed markets, the ASP of smartphones in international markets also recorded a year-on-year 9.7% growth.

Xiaomi continued to focus on innovation with increasing investment in smartphone R&D and achieved great progress. Taking the smartphone camera as an example, the new flagship smartphone Mi 9, launched in February 2019, achieved a DxOMark score of 107 for its rear camera, ranking top three globally at the time of launch.

It also achieved a DxOMark score of 99 for the video category, which is the highest among all smartphones at the time of launch. Xiaomi is also one of the early movers in 5G, launching our first 5G smartphone, Mi MIX3 5G, at World Mobile Congress in February 2019.

China smartphone brand loyalty compared for Q4 2018: iPhone, Huawei, Oppo, Vivo, Xiaomi

IoT and lifestyle products

Revenue of the IoT and lifestyle products segment increased by 86.9% to 43.8 billion yuan (US$6.52bn) over the previous year. 2018 was the year when Xiaomi’s large home appliances emerged from a nascent vertical to a robust business unit. The global shipments of Xiaomi smart TVs were 8.4 million units, representing a 225.5% year-on-year growth. Xiaomi also entered the white goods market, launching the Mi Air Conditioner and the Mi Washing Machine in July and December 2018, respectively.

In addition to smart TVs and laptops, Xiaomi ecosystem products such as Mi Band, Mi Electric Scooter, and Mi Robot Vacuum Cleaner experienced robust sales growth. Xiaomi Mi Robot Vacuum Cleaner ranked second in terms of shipments in mainland China in 2018. Xiaomi was ranked second in terms of wearables shipments across the world in the fourth quarter of 2018 according to IDC.

Xiaomi received 43 international industrial design awards in 2018, including iF Design Awards, Red Dot Awards, International Design Excellence Awards, Good Design Awards, and Design for Asia Awards. Two such accolades went to Mi Sphere Camera which was awarded the iF Gold Award and Mi Rearview Mirror which was awarded the Red Dot: Best of the Best award.

2018 marked the commencement of its overseas IoT business expansion. Xiaomi launched smart TVs in India in February 2018 and were ranked first in terms of online TV shipments in this market.

As of December 31, 2018, there were about 2.3 million users who own more than five Xiaomi IoT devices (excluding smartphones and laptops), representing a 16.2% quarter-on-quarter growth and a 109.5% year-on-year growth.

Related: Xiaomi sold 100 million power banks as of Jan 2019

Internet services

Revenue from internet services segment grew by 61.2% year-on-year to 16.0 billion yuan (US$2.38bn).

• Advertising revenue grew by 79.9% year-on-year to 10.1 billion yuan.
• Revenue from value-added internet services also grew 36.7% year-on-year to 5.9 billion yuan, of which revenue from gaming accounted for 2.7 billion yuan, a 7.3% year-on-year increase. Revenue from other internet value-added services grew 79.9% year-on-year to 3.2 billion yuan, primarily due to an increase in revenue contribution from internet finance business and Youpin e-commerce platform.

In the fourth quarter of 2018, over 30% of internet services revenue was from internet
services outside of advertising and gaming from China smartphones. Xiaomi overseas internet services revenue accounted for 6.3% of all internet services revenue in the fourth quarter of 2018, growing 1,295.6% year-on-year.

Xiaomi continued to enhance its overseas internet services and launched popular internet services in international markets.

For example, it launched video, app store, and news feed services in India and Indonesia. The MAU of Xiaomi smart TVs and Mi Box achieved 55.3% year-on-year growth, reaching 18.6 million in December 2018.

TV internet services revenue accounted for 8.2% of the total internet services revenue in the fourth quarter of 2018, a 119.1% year-on-year increase.

The revenue from internet finance business and the Youpin e-commerce platform accounted for 11.9% and 4.1% of total revenue of internet services in the fourth quarter of 2018, with year-on-year growth rates of 80.5% and 427.6%, respectively.

The MAU of MIUI increased 41.7% from 170.8 million in December 2017 to 242.1 million in December 2018. ARPU for internet services increased from 57.9 yuan for the year ended December 31, 2017, to 65.9 yuan for the year ended December 31, 2018.

International markets

Revenue from international markets grew 118.1% year-on-year to 70.0 billion yuan (US$10.42bn), accounting for 40.0% of the total, compared with 28.0% for the prior year.

According to Canalys, Xiaomi smartphones achieved the number one market share position by shipments for six consecutive quarters in India, with year-on-year growth of 59.6%. In Indonesia, Xiaomi was ranked second in terms of smartphone shipments, with year-on-year growth of 299.6%.

Xiaomi smartphone shipments for Western Europe grew 415.2% year-on-year and ranked fourth. Xiaomi IoT business also achieved good progress in its expansion in international markets.

Xiaomi Business Strategy update

AIoT

As of December 31, 2018, the number of connected IoT devices (excluding smartphones and laptops) on Xiaomi IoT platform reached approximately 150.9 million units, a quarter-on-quarter increase of 14.7% and a year-on-year increase of 193.2%.

Xiaomi is encouraging more third-parties to join its open IoT platform. In December 2018, Xiaomi entered into a strategic partnership with IKEA, under which IKEA’s full range of smart lighting products will be connected to Xiaomi IoT platform.

Xiaomi IoT user base is diversified across smartphone platforms. Xiaomi Mi Home app had 20.3 million MAU in December 2018 and over 50% of the users are from non-Xiaomi smartphones.

Through the empowerment of AI, Xiaomi greatly enhanced the user experience of IoT devices.

As of December 31, 2018, Xiaomi AI assistant Xiaoai had been installed and activated on more than 100 million smart devices and had more than 38.8 million MAU, making it one of the most used AI voice interactive platforms in mainland China. Xiaomi AI speakers have accumulated shipment of over 9 million units.

Multi-brand Strategy

Xiaomi adopted a multi-brand strategy for its smartphones in 2018. Xiaomi and Redmi have become independent brands since January 2019. The Xiaomi brand will focus on pioneering advanced technologies, establishing itself in the mid- to high-end markets, and building online and offline new retail channels.

The Redmi brand will pursue the final price-performance ratio and focus on online channels. Also, XIaomi Black Shark, Meitu, and POCO brands will target games users, female users, and tech enthusiasts, respectively.

Efficiency

As of December 31, 2018, Xiaomi had 586 Mi Homes in mainland China, mainly in first-, second- and third-tier cities. Moreover, to establish its offline new retail presence in lower-tier cities and rural areas of China, Xiaomi has built a sizable authorized store network. As of December 31, 2018, Xiaomi had 1,378 authorized stores in total, comparing to 62 as of December 31, 2017.

Quality

Xiaomi won the Top Prize of “China Quality Technical Award” awarded by the China Association for Quality. Xiaomi received further prestigious awards including the “2018 People’s Ingenuity Product Award” and the “2018 China Quality Benchmark Prize”.

Xiaomi’s mainland China smartphone fault feedback ratio decreased by 43.7% year-on-year. Xiaomi redefined the quality standards of smartphones by providing an 18-month long warranty for its Redmi Note 7 series, 50% higher than the industry standard.

Xiaomi officially launched the “smartphones + AIoT” dual-engine strategy in 2019. It expects to invest over 10.0 billion yuan (US$1.49bn) in the development in AIoT in the next five years.

Read more: China’s smart speaker market insights

Xiaomi claimed to reach 100 million units of Mi power banks sales as of January 8, 2019 since its 1st generation became available in 2013. Xiaomi also took the opportunity to launch the latest 3rd-generation Mi Power Bank with a 20,000 mAh capacity and an affordable price of 199 yuan (US$29.42).

The Mi Power Bank 20,000 mAh is capable of two-way 45W fast charging with its Type-C port, which can not only provide several times’ charging to phones or tablets but also a laptop with type C USB or Nintendo Switch game console.

In addition, it is able to offer 2 USB ports output (dual Type-A ports) simultaneously up to 15W at 5.1V/3.6A. One Type-A port can provide a maximum output of 18W at 5V/2.4A, 9V/2A or 12V/1.5A, which is also available for low power charging to devices like Bluetooth headsets and smart bands.

The three can work at the same time and provide a maximum output of 45W. It is able to charge the MIX 2S 4.3 times, an iPhone 8 7.3 times, or an iPad mini 4 2.5 times. Users can top up the power bank fully in 11 hours with a 10W charger or 4.5 hours with a 45W charger. It is small and light weight of 385 grams.

Xiaomi is planning to invest more than 10 billion yuan (US$1.46 billion) on AIoT (All in the Internet of Things) in the next five years, according to Securities Daily.

Also read: China smartphone market share & top 5 users profiles

The three leading smartphone brands – Huawei (excluding Honor), Xiaomi, and iPhone – kept winning more shares in urban China market as all grew their shares over a year ago, according to the Q3 data from Kantar Worldpanel ComTech. Xiaomi Mi 8 was the most popular handset model in Q3 2018. The next three models on the best-seller ranking were all from iPhone, including the runner-up iPhone X.

As more brands followed iPhone’s suit to launch premium products, the average selling price of smartphones in Q3 increased across the industry. The proportion of sales from premium models increased by 7 percentage points from a year ago.

Huawei continued to win consumers from other brands. Huawei ranked No.1 in terms of net new consumers won (=total new consumers won – total new consumers lost) in Q3, followed by iPhone.

Among all the users leaving Huawei and Honor, the proportion of people joining iPhone camp decreased from a year ago. While the proportions of OPPO/VIVO-turned-iPhone user increased.

There is a lot in common in ex-OPPO/VIVO users, such as they’re relatively young, most of them live in tier-1 and -2 cities, not happy with chips and speed, pay attention to other people’s recommendations, etc.

It’s more important, and to some extent easier, for smartphone brands to keep existing consumers compared to win over consumers. They need to invest more in raising loyalty, according to Liang Yaguang, Consumer Insight Director of Kantar Worldpanel ComTech China.

The average Net Promoter Score (NPS) among Chinese consumers dropped in Q3. Huawei (excluding Honor), VIVO, and OPPO are above the average among mainstream iPhone. The NPS for Samsung eclipsed that of Xiaomi for the first time.

As major brands keep expanding their user bases, the user profiles began to look more like each other. OPPO and VIVO both had more male users while Huawei (excluding Honor) and Xiaomi had obtained more female consumers.

In the United States, Android lost ground to iOS in Q3. Early sales of iPhone XS and iPhone XS Max models in the United States are good news for Apple.

Combined with the continued strong momentum among iPhone 8 and 8 Plus, these sales have contributed to a 5.0 percentage point increase in OS share for Apple in the US – the biggest gain seen worldwide in Q3 2018.

iPhone 8 was the top-selling model in the US over the quarter, with a 9.4% share of the handset market, according to Dominic Sunnebo, Global Director for Kantar Worldpanel ComTech.

But in the five main European markets (UK, France, Germany, Spain, and Italy), Android made significant gains against iOS. The Samsung Galaxy S9 was the top-selling model across the big five markets in September. Meanwhile, the newly released Galaxy Note 9 has made it into the top 10 most popular models for the month. Both Huawei (P20 Lite) and Xiaomi (Mi Note 5) made it to the top five handset ranking for the first time.

European consumers are holding on to their handsets more than two months longer than they were in 2016. Huawei has consolidated its position as the second best-selling brand in Europe behind Samsung from the launch of its P20 series.

Xiaomi continued to expand rapidly in Spain and, more recently, in Italy and France. The focused push that Huawei and Xiaomi are making into Europe is causing pain for their rivals across the board. However, it is Sony, LG, and Wiko who are being disproportionally impacted as a result of their historic over-reliance on the ultra-competitive low and mid-price tiers.

In Japan, Apple continued to lead handset sales under the pressure from Sharp and Huawei, both of which has increased shares of sales by 6 percentage points and 3.2 percentage points, respectively. Sharp’s flagship Aquos R2 and Huawei’s P20 Lite were among the top five best-sellers for the third quarter.

This post was originally published on Kantar.com.

Xiaomi shipped 33.3 million units smartphones in Q3 2018, a 20,4% growth year-on-year. That recorded approximately US$5.04 billion in revenue, an increase of 36.1% year-on-year. Xiaomi Mi 8 ranked 1st in terms of sales volume on Singles’ Day shopping festival 2018. Xiaomi smartphone shipments for Western Europe grew 386% year-on-year and ranked fourth in terms of smartphone shipments in Q3 2018. The global sales volume of Xiaomi smart TVs grew 198.5% year-on-year for Q3 2018.

Xiaomi generated 50.8 billion yuan (US$7.31 bn) in revenue in Q3 2018, an increase of 49.1% year-on-year.

Revenue from international markets accounted for 43.9% of the total. Adjusted profit grew by 17.3% year-on-year to 2.9 billion yuan (US$417.58 mn). The IoT and lifestyle products segment experienced the fastest growth.

Xiaomi Smartphones

Xiaomi shipped over 100 million units smartphones for 2018 on October 26, 2018. Xiaomi smartphones recorded approximately 35.0 billion yuan (US$5.04 bn) in revenue for Q3 2018, an increase of 36.1% year-on-year. Smartphone sales volume reached 33.3 million units in Q3 2018, up 20.4% year-on-year.

Shipment of Xiaomi flagship Mi 8 series had reached 6 million units by October 9, 2018. During the Singles’ Day shopping festival in 2018, Xiaomi Mi 8 ranked 1st in terms of sales volume in the 2,000 yuan to 3,000 yuan price range in the smartphone category on Tmall.com and JD.com, as well as in the 2,000 yuan to 2,499 yuan price range in the smartphone category on Suning.com.

Xiaomi smartphone average selling price (ASP) in mainland China was 16% higher over Q3 2017 and was 4% higher over Q2 2018. The smartphone ASP outside mainland China also increased by 18%, which can be attributed to the increase in the proportion of shipments in Western Europe. The percentage of revenue from smartphones over 2,000 yuan accounted for 31% of total smartphones revenue in Q3 2018.

Xiaomi IoT and lifestyle products

Revenue of the IoT and lifestyle products segment increased by 89.8% year-on-year to 10.8 billion yuan in Q3 2018. This revenue increase was primarily due to a rapid growth in the sales of smart TVs. Besides that, laptops and several Xiaomi ecosystem products such as Mi Band and Mi Electric Scooter also experienced robust sales growth.

The global sales volume of Xiaomi smart TVs grew 198.5% year-on-year for Q3 2018. The global sales volume of Xiaomi smart TVs reached 5.2 million units in the first nine months of 2018. Xiaomi smart TVs monthly sales volume exceeded 1 million for the first time in October 2018.

During the Singles’ Day shopping festival in 2018, the sales volume and sales value of Xiaomi smart TVs both ranked 1st among all the TV brands on Tmall.com, JD.com, and Suning.com, respectively. Xiaomi launched its smart TVs in the India market in February 2018, which is now the leading smart TV brand in India, according to IDC Consulting (Beijing) Ltd. (“IDC”).

Xiaomi launched Mi Air Conditioner on July 23, 2018, which received positive reviews from users. There were about 1.98 million users who own more than five Xiaomi IoT devices as of September 2018, excluding smartphones and laptops, representing a quarter-on-quarter rise of 16.5%.

Internet services

Revenue from Xiaomi internet services segment grew 85.5% year-on-year to 4.7 billion yuan in Q3 2018. Advertising revenue grew by 109.8% year-on-year to 3.2 billion yuan. Revenue from internet value-added services also grew 49.7% year-on-year to 1.5 billion yuan, of which 652.5 million yuan were from gaming, a 12.0% year-on-year increase.

Revenue from other internet value-added services grew by 98.6% year-on-year to 892.7 million yuan, primarily due to an increase in revenue contribution from the internet finance business and Youpin e-commerce platform.

Monthly active users (“MAU”) of MIUI increased 43.4% from 156.5 million in September 2017 to 224.4 million in September 2018. The average revenue per MIUI user (“ARPU”) for the quarter under review increased by 29.4% year-on-year to 21.1 yuan.

Overseas internet services revenue accounted for 4.4% of Xiaomi’s total internet services revenue in Q3 2018. The MAU of Xiaomi Mi TV and Mi Box reached 15.9 million in September 2018. Xiaomi also saw a more significant contribution to internet services revenue from non-smartphone devices.

For example, TV internet services revenue accounted for 5.4% of its total internet services revenue in Q3 2018.

International markets

Xiaomi mainland China revenue grew 20.9% year-on-year to 28.5 billion yuan while international markets revenue grew 112.7% year-on-year to 22.3 billion yuan in Q3 2018. Revenue from international markets accounted for 43.9% of the total in Q3 2018.

Xiaomi smartphone shipments for Western Europe grew 386% year-on-year and ranked fourth in terms of smartphone shipments in Q3 2018, according to Canalys.

Xiaomi smartphone shipments for India grew 31% year-on-year in Q3 2018 and achieved the number one market share position in terms of shipments for four consecutive quarters, according to Canalys. Furthermore, Xiaomi recorded orders of more than 6 million smartphones and orders of more than US$1 billion for all of its products for the Diwali Festival in India this year, during the period from October 9, 2018 to November 8, 2018.

In Indonesia, Xiaomi ranked second in terms of smartphone shipments with year-on-year growth of 337%. It also ranked top five in the smartphone markets of 30 countries and regions in terms of shipments in Q3 2018, according to Canalys.

Related: 71 brands pre-sale exceeded 100 million yuan (US$14M) during Double 11

Other business highlights

AI+IOT

Artificial intelligence (“AI”) + IoT forms one of Xiaomi’s core strategies. Xiaomi AI assistant (“小愛同學”) had more than 34 million MAU, making it one of the most used AI voice interactive platforms in mainland China as of September 2018.

At the World Internet Conference in November 2018, Xiaomi’s AI Open Platform for Smart Homes won the “World Leading Internet Scientific and Technological Achievements” award. At the 2018 China Big Data Industry Ecology Conference, Xiaomi was selected as one of the “Top 50 Chinese Big Data Enterprises”.

At the third AI WORLD 2018 World Artificial Intelligence Summit, Xiaomi was selected as one of the “TOP 10 AI Leading Enterprises in China”. At the 2018 World Artificial Intelligence Conference, Xiaomi AI assistant (“ 小愛同學 ”) was shortlisted for the SAIL Award, the conference’s most prestigious award.

During the third quarter of 2018, Xiaomi announced that Mobile AI Bench, its end-to-end benchmark tool for hardware and neural network frameworks testing on mobile devices, would become a fully open source platform. Empowered by AI, Xiaomi’s IoT platform continues to grow and maintain a leading position in the industry.

The number of connected IoT devices (excluding smartphones and laptops) on Xiaomi’s IoT platform reached approximately 132 million units as of the end of Q3 2018, an increase of 13.8% from the previous quarter.

Efficiency

Xiaomi had 499 Mi Homes in mainland China as of September 30, 2018, mainly in first- and second-tier cities. Moreover, to further penetrate lower-tier cities and rural areas of China, Xiaomi had more than 1,100 authorized stores in total by the end of Q3 2018, compared with more than 360 authorized stores in Q2 2018.

Despite the rapid expansion of its offline channels, Xiaomi’s overall operation remained highly efficient with the operating expense ratio at 8.5% for Q3  2018.

Brand Strategy

Xiaomi launched POCO, a new smartphone brand. The POCO smartphone, first released in India on August 22, 2018, is now available in most of Xiao’s international markets and is widely popular among tech enthusiasts.

It also launched a gaming smartphone brand, Black Shark, through one of its investee companies. Black Shark brings together powerful hardware, cutting-edge innovation, refined build and design, polished software, and gamer-centric services to deliver the ultimate gaming experience to users.

On November 19, 2018, Xiaomi and Meitu, Inc. (“Meitu”) entered into a strategic cooperation agreement in relation to, among others, the exclusive global license of the Meitu brand and global license of certain technologies and domain names in relation to all future Meitu branded smartphones under the cooperation and certain smart hardware products.

Through this strategic partnership, Meitu’s image-related algorithms and technologies can help Xiaomi to provide better photographic experiences to its users. At the same time, the strength of Meitu’s brand among females can also help Xiaomi continue to expand and diversify its user base.

Insights of China internet users in lower-tier cities

71 brands exceeded 100 million yuan (US$14.37 million) in GMV in the pre-sale period of Double 11. Among that, 15 brands came from Tmall apparel, i.e. Nike, Adidas, Puma, Lining, Converse, Anta, Fila, Skechers, New Balance, Underarmour, Uniqlo, Eifini, Only, Vero Moda, and Bosideng. The same figure was only 40 in last year’s Double 11. 

14 brands were from consumer electronics, namely, Apple, Huawei, Xiaomi, Vivo, Honor, Haier, Midea, Siemens, Gree, Aux, Hisense, Fotile, Dyson, and Ecovcs.

The story of a Taobao celebrity who sold 300 million yuan products on Double 11

Three brands are from autos, namely, SAIC Volkswagen, Buike, and Lincoln.

17 brands came from makeups, personal care, and maternal & child, namely, Lancome, Estée Lauder, Olay, SK-II, L’Oreal, Pechoin, HomeFacialPro, Innisfree, Elizabeth Arden, Shiseido,  La Mer, Ya-Man, Whoo, Ssulwhasoo, MAC, P&G, and Purcotton.

20 brands were from home decoration, for instance, Linshimuye, KUKA, QUANU, CHEERS, Nabel, Sophia, tata, Shangpin Home Collection, and OPPEIN.

YA-MAN and MOONY were the only two brands in Tmall Global saw GMV hit 100 million yuan in pre-sale.

Consumer electronics: Apple, Huawei, and Haier all in the “100 million yuan club” On November 1st, total pre-sale GMV of Tmall consumer electronics increased by roughly 6 times year-on-year, which remained to be the top platform for smartphone and home appliances.

To be specific, GMV increased by 15 times for smartphones, 10 times for digital 3C, and 4 times for large home appliances.

Notably, Xiaomi’s flagship smartphone MIX3 was sold out at the moment the sale started, Honor’s Magic2 was sold out in the first 5 minutes, and nearly 10 thousand vivoZ3 sold out in 10 minutes.

16 thousand pieces of Haier 10KG tumbling-box washing machine sold out in two days. 20 thousand Dyson supersonic hairdryer and over 50 thousand vacuum cleaner were pre-sold accumulatively.

Apple, Huawei, Haier, Xiaomi, Midea, Siemens, GREE, Dyson, and ECOVACS had already marched to the “100 million yuan club” as of November 2nd. Among them, sales of hot items like iPhone X, iPhone XS Max, Huawei Mate 20 Pro, Apple iPad 128G, and Apple iPad 32G all exceeded 100 million yuan.

How the biggest shopping festival affects China e-commerce apps users growth, engagement, and loyalty

Top pre-sale brands as of November 2nd

Top smartphone brands were Apple, Xiaomi, Vivo, Huawei, honor, Oppo, Meizu, Samsung, Nokia, and Meitu.

Top home appliances brands were Midea, Supor, Joyoung, Ecovacs, Philips, Roborock, A. O. Smith, Flyco, Bear, and Haier.

Among them, hot items were Xiaomi Mijia Vacuum Robot Cleaner, Roborock S51 Smart Robot Vacuum Cleaner, Roborock S50 Smart Vacuum Robot Cleaner, Midea WH2202S induction cooker, A. O. Smith NL1200D Water Purifier, ECOVACS Cleaning Robots, Midea Simple301 electric cooker, ECOVACS Deebot  DT85G Robot Vacuum Cleaner, Midea Simple 101 electric pressure cooker, and OGAWA OG7508S massage sofa.

Tmall Double 11 has become the best timing for launching new consumer electronics products. iPhone XR, Huawei Mate 20 series, Xiaomi MIX3, honor Magic, Dyson Airwrap, and Beats Solo3 Mitch Limited Edition were all in a hurry to catch up with Tmall Double 11.

Apparel: sales of down jacket increased by 90%

It seems that consumers wanted to take advantage of Double 11 to buy everything they might need for a year round.

Over 60 thousand Newbalance565 and 50 thousand MiiOW long underwear suits for couples were pre-sold. Though the snow season had yet to come, 80 thousand snow boots were pre-sold. The sales of down jacket increased by 90%.

The youngest who is in pursuit of street fashion showed extraordinary consumption power. The sales of Edison Chen founded Clot grew by around 60% year-on-year; sales of celebrities Jerry Lee and Wilber Pan co-founded NPC increased by 55% year-on-year; sales of Aape that was under the brand of HK I.T group rose by 45% year-on-year.

Luxury or affordable luxury products were hot. Sales of fur were almost doubled compared with last year’s.  Limited-edition scarves by Burberry were sold out on the first day of pre-sale.

Cosmetics and toiletries: 50 thousand Philips electric toothbrush sold out

Pre-sale GMV of Lancome, olay, Estée Lauder, SK-II, L’Oréal, Sulwhasoo, Elizabeth Arden, and Procter & Gamble were all hit 100 million yuan.

Beauty apparatus generated double sales compared with the previous year. An eyeshadow that was co-branded by domestic brand Perfect Diary and the British Museum sold out at a fast speed of one in every 11.5 seconds. 100 thousand HomeFacialPro’s Hyaluronic Acid Stock Solution – last year’s most trending brand- were sold out.

140 thousand OLAY White Radiance Light Perfecting Essence 50ml sold out in just 4 days of the pre-sale period. Around 20 thousand Givenchy Le Rouge were sold in less than five days. MAC sold over 500 thousand lipsticks in the pre-sale period.

Philips sold 50 thousand electric toothbrushes in the first one minute. Crest sold 6 thousand and 80 thousand 3D White toothpaste in the first one minute and ten days, respectively. Lancome sold 10 thousand Tonique Confort in every minute.

Food & Beverage: sales of 1919 increased by ten times

Pre-sales of KFC increased by 70.4% year-on-year, 5 thousand KFC and Tmall co-branded card were sold out at the moment it launched.  1 million KFC Original Recipe were sold. Three Squirrels new product Trembling Noodle were sold 10 thousand buckets.

1919.cn, an online wine, and spirits shop that has recently received 2 billion yuan investment from Alibaba saw sales of its Tmall flagship store grew by 1,000% year-on-year.

Roughly 80 thousand cars were booked

Autos saw record sales in the pre-sale period. 90 Land Rover at a fixed price of 265.9 thousand yuan was sold out. Buick sold 7,000 cars in a week, over 1,000 consumers in rural areas placed orders through rural Taobao partners. Over 600 high-end Lincoln was booked in 5 days with 300 thousand new customers following its Tmall flagship store.

Users booked a total of 80 thousand cars on Tmall, equal to the entire years’ sales of 30 4S shops.

Alibaba Health: medical beauty services increased by 533% as of October 30th

Online celebrities played a role in the big sales of traditional tonic. The Internet celebrity Li Ziqi’s shop sold 13 thousand jars of Changbaishan honey. For the dietary supplement, BY-HEALTH sold 22 thousand cans of collagen powder, which was bundled with celebrity Cai Xukun-tailored gift.

Inspired by Chinese famous chili sauce Lao Gan Ma’  hoodies that were sold at the New York Fashion Show, several mind-blowing cooperation had sprung up in health care. For example, Durex and Cat’s Kitchen sold 8,000 items of their co-branded popping candy and ultra-thin condom gift box. TongDaoDaShu, a prominent social media influencer, and Omron sold 9 thousand pieces of their co-branded low-frequency massage device.

Fliggy: five-star hotels and business class tickets were the most popular

High-end hotels like Marriott, Hilton, Hyatt, and InterContinental sold 35o thousand night rooms. Airlines also sold 7.5 thousand business class tickets through Fliggy.

Over 200 thousand consumers paid attention to travel products about Hong Kong. Sales of Lao’s hot tourist route was increased by 4 times year-on-year. 16 thousand visas of top destinations Japan, Philippines, and Thailands were booked.

Marriott launched several hundred Double 11-tailored products. Its limited edition pass card for celebrating the coming new year was sold out in two days.

Several online travel agencies united with Tmall Double 11 to release more membership profits like shared membership system and exclusive discounts. For example, Singapore Airlines had shared its membership system with Fliggy on October 28th; the stock was running out in just half an hour after it opened the registration system.

With 180 thousand brands participating this year, which was only 27 brands in the first year of 2009, Tmall Double 11 had become the commercial Olympic for global brands, to a certain extent.

Find out Tmall Double 11 highlights or Double 11 statistics of top retailers & top 50 Tmall stores in 2018

The Double 11 rising on the popularity of China Singles’ Day (Nov 11) is growing bigger every year. Top e-commerce players all saw record-breaking sales on this very day. Sales on Tmall reached 10 billion yuan in 00:02:05, sales on NetEase Kaola exceeded 100 million yuan in 00:03:49, and GMV on Suning exceeded 100 million yuan and 1 billion yuan in 4 seconds and 50 seconds, respectively.

Orders on Vipshop hit 2 million in one hour. GMV on JD exceeded 100 billion yuan in 10 days during this shopping festival. Xiaomi new retail saw GMV reaching 100 million yuan in 36 seconds.

Tmall

This year, Tmall took 00:02:05 to hit 10 billion yuan, 01:47:26 to reach 100 billion yuan, and 10:28:30 to exceed US$20 billion. GMV totaled 213.5 billion yuan (US$30.7 billion) by the end of Double 11.

Tmall logistics orders exceeded 1 billion as of 23:18:00 on Double 11.

The first cup of Starbuck Coffee was delivered by Ele.me “Starbuck Deliver” to a Shanghai consumer in the first 9 minutes 2 seconds on Double 11. Starbuck takeaway has covered 17 cities with over 1400 stores at the very day of Double 11.

The first Tmall Supermarket parcel- a piece of spring water- was delivered to a Qingdao consumer in eight seconds. A consumer living at Putuo District, Shanghai, received a cocktail cabinet from Cainiao-cooperated RRS Logistics 12 minutes after Double 11 begins.

Top 50 Tmall Stores by GMV on Double 11

Jingdong (JD.com)

Total orders from 00:00:00 1 Nov till 22:56:00 10 Nov exceeded 100 billion yuan on Jingdong (JD), which reached 159.8 billion yuan as of  24:00:00 11 Nov, an increase of 25.7% year-on-year.

Smartphone, TV, Huawei, wash machine, and Nike were the most searched keywords. Notably, the sales of TV and air conditioner hit 100 million yuan in 36 seconds and 40 seconds, respectively. The sales of refrigerator and wash machine exceeded 300 million in 3 minutes.

The sales value of laptops in the first 10 minutes reached 2 times as much as last year’s. The sales volume of the translator, student tablet, and keyboard and mouse reached 36 times, 4 times, and 4 times as much as last year’s, respectively.

The total GMV of JD.com for the 11 days ending on 11 Nov reached record 159.8 billion yuan.

NetEase Kaola

Netease Kaola saw sales hit 100 million in the first 3 minutes and 49 seconds and exceeded the entire sales of last year’s in 78 minutes on Double 11. Total GMV reached 4.3 billion yuan, a 140% increase year-on-year.

A consumer living at Jinhua, Zhejiang received an imported paper diaper from NetEase Kaola in the first 26 minutes.

Suning.com

GMV of Suning.com on Double 11 exceeded 100 million yuan and 1 billion yuan in the first 4 seconds and 50 seconds, respectively. Its one-hour sales increased by 153% year-on-year. The sales of air conditioner hit 100 million yuan in just 35 seconds. As of 18:00:00, its online orders grew by 132% year-on-year and offline orders increased by 96% year-on-year. Total GMV was 14.8 billion yuan, an increase of 44.8% year-on-year.

Total orders on Suning Supermarket increased by 500% in the first hour. Among that, fresh food increased by 800%. The top 5 cities contributing most GMV on Suning were Beijing, Shanghai, Guangzhou, Nanjing, and Shenzhen.

Driven by free logistics and shopping coupons, Suning.com saw orders of products  (ships from and sold by Suning.com) less than 86 yuan increased by 6 times from 1 Nov till 1:00:00 11 Nov. Its first delivery on Double 11 was sent to Haikou in 9 minutes 48 seconds.

Sales on Suning Supermarket and Readbaby increased by 546% and 151% year-on-year, respectively.

Vipshop

Double 11 started from 20:00 10 Nov on Vipshop. Orders exceeded 2 million in the first hour. The first package was delivered in 12 minutes 25 seconds after 11.11 begins. Orders exceeded 8 million in 12 hours 11 Nov, 30% of which was placed by post-90s. Especially, 97% of orders were placed via mobile devices.

Post-90s accounted for 40% of Vipshop’s customers as of Q1 2018. Moreover, nearly 50% of its newly added customers were post-90s, whose favorite products were the facial mask, skin care products, and women’s boots.

Xiaomi

Xiaomi new retail omnichannel saw sales exceeded 100 million and 5 million in the first 36 seconds and 13 minutes and 37 seconds, respectively. The sales on its Xiaomi flagship on Tmall hit 100 million and 5 million in 56 seconds and 33 minutes and 8 seconds, respectively.

Its first order – Mi TV 4S 65 Pro – was placed in the first 19 seconds on Double 11 in the Mi experience store that locates at Golmud, Qinghai with an attitude of 278.0 meters. Its over 5,000 offline stores shared the same discounts as online on Double 11. The sales of Mi Notebook hit 3 billion yuan as of 12:00 on Double 11.

Double 11 Sales of Luxury Goods

The luxury apparel and cosmetics brands, high-end products, and imported products were all booming on Double 11.

LA MER’s 17,200 yuan-priced global limited edition was sold out in the first hour on Double 11, 10 times as much as the total of previous 10 months. 300 thousand bottles of Lancome Tonique Confort was sold in the first 8 hours.

The Italian brand VERSACE that just participated in Tmall Double 11 for the first time saw booking 20 times as much as one day sale in the first three days of pre-sell. 2.83 million Canadian sweep shrimps, 1.37 million Australian steaks, and 140 thousand Mexican avocadi were sold within one hour.

Top 5 countries selling to China on Double 11 were Japan, the U.S., South Korea, Australia, and Germany.

Top 5 popular imported brands among Chinese consumers on Double 11 were Swisse, KAO, Moony, Aptamll, and Dr.Ci.Labo.

More and more paying for hobbies

At the time when sales of brand new smartphones like iPhone XS Max, iPhone XR exceeded 100 million in 30 minutes, DJI Osmo Mobile 2 UAV, GoPro HERO7 Black, and ThundeRobot 911 ME Game Notebook were sold out. 5 thousand Xingxing Lenglian household freezer were sold in 20 minutes.

Seeing from JD’s performance, sales volume of UAV and noise-cancellation headphone, smart pet products, and health and workout kind of dietary supplement increased by over 400%, 600%, and 225% year-on-year, respectively.

As for Suning, sales volume of Smith water heater exceeded 1.5 thousand. Sales volume of electric warmer increased by 321% year-on-year.

Integration of online and offline in new retail is necessary

The first cup of Starbuck coffee was sent by Ele.me “Starbuck Deliver” to a Shanghai consumer in the first 9 minutes and 2 seconds on Double 11.

Tmall had cooperated with 100 new retail business districts, 200 thousand smart stores, 62 Intime Department Stores, 41 Easyhome stores, 100 Hema Supermarkets, 470 new retail supermarkets, and 1 million Ele.me and Koubei businesses to promote Double 11 offline.

Transactions on Xiaomi new retail omnichannel exceeded 4 billion yuan as of 18:00 on Double 11, more than last year’s 2.46 billion yuan on its Tmall flagship shop.

Traditional out-of-home advertising showed a downtrend in spending in China. Both real estate and construction industry reduced out-of-home ad spending by 37.1% year-on-year. Xiaomi, Ele.me, KFC, and Didi were among the top ad buyers. 

Xiaomi spent more on out-of-home advertising in July to promote its new model MAX 3 and thus topped the ranking with a high growth of over 1,000% in spending from just 91st a year ago.

Overall, spending on elevator TV advertising increased compared with the previous year. Alcoholic beverage industry saw expenditure skyrocket to 6,917.8%.

Ele.me still was the biggest buyer though its spending reduced by 10.3%. KFC and Mengniu took the next two places by a spending growth at 198.9% and 88.5% respectively. Didi made the highest jump from 61st to 8th with a growth of over 1,000% in spending.

Log in to read the complete article. Or subscribe here.

Check out China advertising market overview; top advertisers in H1 2018 here

In Q2 2018, Xiaomi reported a high growth of 58.7% in smartphone revenues to 30.5 billion yuan (US$4.61 bn), accounting for roughly two-thirds of the total revenues. Smartphone sales volume reached 32.0 million units, up by 43.9% year-on-year. IoT and lifestyle products grew 104.3% year-on-year in revenues with the global sales volume of smart TVs grew over 350% year-on-year.

Xiaomi achieved 45.2 billion yuan (US$6.82 bn) in revenue, representing a growth of 68.3% year-on-year. Adjusted profit grew 25.1% to 2.1 billion yuan (US$317.1 mn) year-on-year, according to its first results as a public company since its IPO in July.

Smartphone

The smartphones segment recorded approximately 30.5 billion yuan in revenues for Q2 2018, representing year-on-year growth of 58.7%. This growth was driven by an increase in both sales volume and the average selling price (“ASP”). Smartphone sales volume reached 32.0 million units, up 43.9% on a year-on-year basis. Xiaomi is the fastest growing amongst the top five mobile phone companies globally, according to IDC.

In China, Xiaomi’s strategic focus for 2018 is to expand into the high-end smartphone market. Its smartphone ASP in mainland China increased over 25% year-on-year in Q2 2018. Its flagship phone series, Mi 8, which has an average ASP above 2,000 yuan (US$301.98), sold over 1.1 million units in the first month of sales.

IoT and lifestyle products

The IoT and lifestyle products segment grew 104.3% year-on-year in revenue to 10.4 billion yuan (US$1.57 bn) for Q2 2018. Global sales volume of smart TVs grew over 350% year-on-year in this quarter. Xiaomi became the No.1 TV brand in mainland China in Q2 2018. The smart TV was also launched in the India market in February 2018.

Xiaomi also continued to launch innovative IoT products, such as the Mi VR Standalone headset that it co-developed with Oculus, and Mi Band 3, which features a large touchscreen, 50-meter water resistance and battery life of up to 20 days. Mi VR Standalone headset was named one of the best inventions of 2017 by Time Magazine.

As of the end of Q2 2018, Xiaomi had about 115 million connected Xiaomi IoT devices, excluding smartphones and laptops, an increase of 15% quarter-on-quarter. There are close to 1.7 million users who own more than five Xiaomi IoT devices, excluding smartphones and laptops, increased by 19% quarter-on-quarter.

Internet services

Revenue from the internet services segment grew 63.6% year-on-year to 4.0 billion yuan (US$603.95 mn) in Q2 2018, driven primarily by increasing monetization in mainland China. Advertising revenue grew 69.6% year-on-year to 2.5 billion yuan (US$377.47 mn) driven by continued optimization of its recommendation algorithm and increased advertising spending from customers.

Revenue from internet value-added services also grew 54.1% year-on-year to 1.5 billion yuan (US$226.48 mn). Within internet value-added services, revenue from gaming accounted for 703.9 million yuan (US$106.28 mn), growing 25.5% year-on-year.

Monthly active users (“MAU”) of MIUI increased 41.7% from 146.0 million in June 2017 to 206.9 million in June 2018, driven by increasing smartphone sales volume and user adoption.

Average revenue per user (“ARPU”) this quarter increased 15.4% year-on-year to 19.1 yuan (US$2.88). Up until the end of Q2 2018, the internet services revenue was primarily generated in mainland China.

Artificial intelligence (“AI”) technology is a core part of Xiaomi’s strategy. Its AI assistant (” 小愛同學 “) won the “2018 Leading Scientific and Technological Achievement Award — Cool Technologies” and “2018 Leading Scientific and Technological Achievement Award — New Product” awards at the China International Big Data Industry Expo held in May 2018.

As of July 2018, its AI assistant (“小愛同學”) MAU exceeded 30 million. The AI speaker has accumulated over 2 billion activations within the first year of its launch.

To promote the development of the AI industry, in June 2018, Xiaomi announced that its Mobile AI Compute Engine (“MACE”), a prediction framework for a deep learning model optimized for mobile devices, would become a fully open source platform.

Using MACE, developers can more quickly and efficiently develop AI applications on mobile devices and significantly enhance the user experience of these applications. At present, application scenarios covered by MACE include scene recognition, image super-resolution, image stylization processing, intelligent speech, intelligent translation, etc.

International markets

Xiaomi’s international revenue grew 151.7% year-on-year to 16.4 billion yuan (US$2.48 bn), accounting for 36.3% of its total revenue.

Its smartphones continued to experience rapid growth in the Indian market and ranked first in terms of market share by shipment in Q2 2018, according to Canalys.

In Indonesia, Xiaomi also recorded impressive growth and ranked No.2 in terms of smartphone shipments in Q2 2018. In the Western Europe market, Xiaomi expanded into France and Italy in May 2018. Smartphone shipments in Western Europe grew over 2700% year-on-year. As of Q2 2018, Xiaomi was ranked top five in the smartphone markets in 25 countries and regions, according to Canalys.

Expansion of offline channels

As of June 30, 2018, Xiaomi Corporation had more than 400 Mi Homes in mainland China, mainly in first- and second-tier cities. To penetrate more rural parts of China, by the end of Q2 2018, Xiaomi had over 360 authorized stores and also had built a direct supply network covering more than 37,000 locations, spread across over 30 provinces, over 300 cities and over 2,500 towns.

In India, its offline smartphone sales achieved a market share of over 20% and ranked No 1. in 8 cities in Q2 2018, according to GFK. Its overall operation remained highly efficient with an operating expense ratio of 8.8% for Q2 2018.

Top smartphone, technology brands in China 2018

Chinese smartphone brand Xiaomi, which is making debut in Europe, earned 4.4% of sales market share in five major European markets in Q1 2018, ranking No.4, according to latest smartphone OS data from Kantar Worldpanel ComTech.

The top three brands in the big five European markets, Samsung, Apple, and Huawei, made up 71% of smartphone sales in the latest quarter, but it is still very impressive for the newcomer Xiaomi to quietly take the fourth spot. Its growth has come predominantly from just two markets, Spain and Italy. It is also worth mentioning that these were also the markets that another Chinese brand Huawei had conquered first in Europe.

According to media reports, Xiaomi is scheduled to go public in Hong Kong this July and expected to raise as much as US$10 billion in the IPO. It plans to use 30% of the proceeds to fund for its overseas expansion, said its prospectus.

Dominic Sunnebo, Global Director for Kantar Worldpanel ComTech, comments: “Despite being a household name in China and India, Xiaomi has turned its attention to Europe late, and it has quickly proven to be a worthy opponent.

In Asia, Xiaomi’s business model has been focused online and while this remains an important factor in its European model, it is local partnerships with key players like Media Markt, Media World and Carrefour that has allowed it to accelerate sales so quickly.”

On Xiaomi’s home turf of China, it is also the best performing brand in Q1: in urban China, its market share grew 7 percentage points from a year ago to reach 17.9%.

Kantar Worldpanel ComTech carries out monthly panel surveys among Chinese urban mobile phone users to monitor the market share changes of various brands. In China, the panel size is 22,000.

Panelists were recruited from tier-1 to 5 cities and each year more than 260,000 surveys were conducted. The nature of the research methodology means it can cover the influence of smartphones sold in other countries ended up in China and avoid the confusion caused by unsold phones stocked at warehouses of distributors.

In Q1, urban Chinese consumers’ loyalty towards smartphone brands continued to decline: it had slid to 26.6 in the three months from 28.3 a year ago. People are considering more features of a phone when buying a new one – it reached a record high of 4.5 per person, compared with only 3 in the same period of 2015. Among them, “reliability” has overtaken “screen size” and “quality of camera” to become the highest priority for Chinese consumers.

In fact, this trend will be music to Apple’s ears, because our survey has shown that Apple enjoys the highest satisfaction rating among Chinese consumers for “reliability”. For Android brands, Huawei is the highest in this aspect.

This could partly explain why iPhone X is not only Apple’s best-selling model in China but also the best-selling model among all smartphone models in Q1 2018.  This has fuelled iPhone’s market share to 22.1%.

Back to Europe, with Huawei’s entry to the US market effectively blocked by the government, the business has increased the focus and resources it is aiming at Europe. Despite the well-reviewed Huawei P20 flagship not being released until April, the results are already showing.

Huawei has managed to significantly increase its presence across the big five European markets and it now holds almost a fifth of sales in the three months to March 2018 – 19.0%, up from 14.4% a year earlier.

“Most encouraging for Huawei are the signs that progress is finally being made in Great Britain, with share rising to 5.9% – it needs to conquer this market if it’s going to realize its ambition of becoming a premium choice for consumers,” Dominic said.

In the United States, Apple and Samsung have managed to eke out year-on-year share gains, up 0.1 of one percentage point and 1.4 percentage points respectively. Google has achieved its highest ever quarterly sales share of 3.4%, up from 1.7% a year earlier, thanks to the success of its Pixel line. ZTE, also under pressure from the US government, saw its sales share fall to 2.5% in the latest quarter.

In the US and the European top five markets, iPhone 8 sold in marginally higher numbers than the flagship iPhone X, indicating that as early iPhone X demand is fulfilled, the price difference between the two devices is playing a notable role in consumers’ choices.

Find out here what Xiaomi reveals in its IPO filing.

This post was originally published on Kantar.com.

Xiaomi filed an initial public offering (IPO) in Hong Kong on May 3, 2018, becoming the first technology corporation to use Hong Kong’s new rule, i.e. dual-class shares, for going public.

The filing is expected to raise at least US$ 10 billion and value the company at between US$100-120 billion, making it the largest IPO since Alibaba in New York.

According to the IPO filing, Xiaomi’s revenue grew 167.5% from 68.43 billion yuan in 2016 to 114.64 billion yuan in 2017.

Xiaomi’s operating profits reached 12.22 billion yuan in 2017, an increase of 222.7% year-on-year. Xiaomi made a net loss of 43.9 billion yuan in 2017, down from 0.49 billion yuan profit a year earlier.

In 2017, Xiaomi derived nearly 70.3% of its revenue from smartphones, which was 80.56 billion yuan. Revenue derived from IOT (internet of things) and lifestyle products reached 23.45 billion yuan, accounting for 20.5% of the total. Revenue derived from internet service was 9.9 billion yuan, accounting for 8.6% of the total.

In terms of sales volume and average selling prices of Xiaomi smartphone, Xiaomi sold 66.546, 55.419, and 91.41 million smartphones respectively from 2015 to 2017. The average selling price of a Xiaomi smartphone was 807.2 yuan, 879.9 yuan, and 881.3 yuan respectively from 2015 to 2017.

As of 31 March 2018, Xiaomi has developed 38 10-million-MAU and 18 50-million-MAU mobile apps including Xiaomi App Store, Xiaomi Browser, Xiaomi Music, and Xiaomi Videos. On average, a Xiaomi user spends about 4.5 hours on the smartphone.

Check out China mobile app user insights 2018

Leading smartphone brands have tightened their grip of urban China market. In the three months ending October 2017, the top five brands – Huawei (including sub-brand Honor), Xiaomi, Apple, Vivo and OPPO – made up 91% of smartphone sales in urban China, compared to 79% a year earlier, according to the latest smartphone OS data from Kantar Worldpanel ComTech.

China, a market once overrun with new challengers, is maturing.

“Chinese challenger brands like Meizu, LeTV, Coolpad, ZTE, and Lenovo were once on the same trajectory as like of Xiaomi, but any momentum they once had has abruptly stopped, with many struggling to get past a 1% share,” said Dominic Sunnebo, Global Business Unit Director for Kantar Worldpanel ComTech. “Samsung’s performance in China continues to deteriorate, with its share now down to just 2.2% of that market.”

Kantar Worldpanel ComTech carries out monthly panel surveys among Chinese urban mobile phone users to monitor the market share changes of various brands. In China, the panel size is 22,000. Panellists were recruited from tier-1 to 5 cities and each year more than 260,000 surveys were conducted. The nature of the research methodology means it can cover the influence of smartphones sold in other countries ended up in China and avoid the confusion caused by unsold phones stocked at warehouses of distributors.

Digging deeper into the data, we can see that Xiaomi and Honor both realized significant growth in August – October period. Xiaomi’s sales market share jumped to 20.1%, 1 percentage point higher than in the May – July circle. However, due to its previously lacklustre performance, currently only 13.8% of all urban smartphone users are using Xiaomi, 2.1 percentage points lower than a year ago.

Honor’s share was 11.7% in August – October, also 1 percentage point higher than in May – July circle. Among all urban smartphone users, 9.8% are using Honor, 1.3 percentage points higher than a year ago.

Among the top 20 best-selling models during August – October period, eight are from Xiaomi or Honor.

Even though “price” is the biggest advantage of both brands when people making their purchasing decision, Xiaomi and Honor have both managed to achieve higher selling prices. Between August and October, the average selling price of Xiaomi models is 1,640.32 yuan, 321.96 yuan higher than a year ago; that of Honor phones is 2,136.66 yuan, 506.53 yuan higher than a year ago.

It’s a bittersweet period for Apple. Urban China remained a bright spot for Apple, with its share edging up 0.5 percentage point in the latest three months to reach 17.4%.

But globally, iOS share fell in key markets, making clear the impact of the flagship iPhone X not being available to buy in the month of October.

Dominic said: “It was somewhat inevitable that Apple would see volume share fall once we had a full comparative month of sales taking into account the non-flagship iPhone 8 vs. the flagship iPhone 7 from 2016. This decrease is significant and puts pressure on the iPhone X to perform.

“Considering the complete overhaul that the iPhone X offers, consumers may be postponing their purchase decisions until they can test the iPhone X and decide whether the higher price, compared to the iPhone 8, is worth the premium to them,” he said.

He added: “As of October 2017, 35.3% of Apple’s installed base customers across Europe and the United States had owned their iPhones for more than two years – up from 30.1% a year earlier and signifying considerable pent-up demand within Apple’s base. In pure value terms, it is likely the iPhone X average selling price will more than make up for a dip in sales of older iPhone models.”

China smartphone market in Q3 2017; 4 out of 10 using Huawei or iPhone

In the ninth year of the world’s largest 24-hour shopping event, this year’s Tmall Double 11 2017 will showcase:

Alibaba Economy at scale. 11.11 will demonstrate the technological innovation and global scale of the entire Alibaba Economy. More than 140,000 brands and hundreds of millions of consumers will participate in 11.11 this year. This shopping festival will be supported by Alibaba’s global cloud, payment and logistics infrastructure.

Consumers will enjoy seamless payment and consumer loan services provided by Ant Financial. Alibaba Cloud will serve as the core technology and computing backbone to ensure the best consumer experience throughout the festival. Cainiao Network expects over 3 million logistics personnel to facilitate the hundreds of millions of packages that will be generated from the festival.

The number of annual active consumers on Alibaba’s China retail marketplaces reached 488 million, an increase of 22 million from the 12-month period ended June 30, 2017. See the performance highlights of Alibaba in Q3 2017 here.

Power of the Chinese consumer. Alibaba expects that hundreds of millions of Chinese consumers who visit its platforms on November 11 will have access to over 60,000 international brands and merchants to satisfy their increasing demand for goods and products from around the world. This year, Tmall will, for the first time, leverage its popularity outside China to bring over 100 domestic Chinese brands to international markets, targeting millions of overseas Chinese consumers in Asia and the rest of the world.

New Retail implementation. Alibaba’s New Retail model with integrated online-offline customer offerings will be showcased in store locations across China. More than 1,000 brands will convert nearly 100,000 physical locations into “smart stores” and our channel distribution solutions make it easy for more than 500,000 local neighborhood stores and Rural Taobao service centers to sell to consumers in lower-tier cities and rural villages.

Tmall Double 11 Sales Stats 2017

Total sales on Tmall Double 11 Shopping Festival reached 168.2 billion yuan in 2017 from 225 countries and regions, 90% from mobile.

167 merchants each has total transactions of over 100 million yuan. Nike store became the first one with over 1 billion yuan in apparel category.

Top 50 Tmall Stores on Double 11 2017

1. Suning
2. Xiaomi
3. Honor (Huawei)
4. Haier
5. Nike
6. Uniqlo
7. Sharp
8. Adidas
9. Linshimuye (furniture)
10. Midea
11. Quanyou (furniture)
12. GREE
13. Huawei
14. Gujia (furniture)
15. Heilan Home
16. PurCotton
17. Sanzhi Songshu (snacks)
18. P&G
19. Dyson
20. GXG
21. Balabala (children apparel)
22. New Balance
23. Semir
24. Peacebird
25. Jack Jones
26. Pechoin
27. Veromoda
28. ecovacs
29. Lancome
30. Zara
31. ONLY
32. Estee Lauder
33. Hisense
34. Anta
35. Philips
36. Gap
37. Chando
38. Eifini
39. Fotile
40. HSTYLE
41. Vivo
42. SK-II
43. Olay
44. Skyworth
45. Little Swan
46. Meters/bonwe (Apparel)
47. Xilinmen
48. Li Ning
49. Siemens
50. Bosideng (Apparel)

Outdoor sports

1. Nike
2. Adidas
3. Anta
4. New Balance
5. Li Ning
6. Sketchers
7. Puma
8. Xstep
9. Under Armour
10. Camel

Tmall Sales Progress on Double 11 2017

• 1 billion yuan: 28 seconds (vs. 52s in 2016)
• 10 billion yuan: 3 mins 1 seconds (vs. 6m 58s in 2016)
• 19.1 bn yuan: 5 mins 57s (exceeds total Double 11 sales in 2012)
• 36.2 bn yuan: 16 mins 10s (exceeds total Double 11 sales in 2013)
• 50 bn yuan: 40 mins 12s (vs. 2 hrs 30m 20s in 2016)
• 57.1 bn yuan: 1 hours 49s (exceeds total Double 11 sales in 2014)
• 91.2 bn yuan: 7 hours 22m 54s (exceeds total Double 11 sales in 2015)
• 100 bn yuan: 9 hours 4s(vs. 18 hrs 55m 36s in 2016)
• 120.7 bn yuan: 13 hours 9m 49s (exceeds total Double 11 sales in 2016)
• 168.2 bn yuan at 24:00

Alibaba Cloud processed 325,000 orders per second at peak. Alipay processed 1.5 billion payment transactions in total, up 41% from 2016, and processed 256,000 transactions per second at peak.

Other E-Commerce Platforms Double 11 Stats 2017

Total orders from 1 Nov till 7:46:58 on 11 Nov exceeded 100 billion yuan on Jingdong (JD). Total transactions on JD during the eleven days’ online sales reached 127.1 billion yuan with over 50% growth.

Netease Kaola total Double 11 sales value reached 4 times as much as last year’s. It reached the total transactions of last year’s Double 11 in the first 28 minutes. Kaola has 25.6% market share in China’s cross-border e-commerce market in Q3 2017 ranking first according to iiMedia.

Total orders on AliExpress exceeded 10 million as of 19:50 on Double 11 2017. It covers 184 countries and regions in the first two hours.

Find out more Singles Day 2017 Insights »

The latest research data from Yandex Pay shows that the number of purchases from China by Russian increased by 3.5 times over last summer while the value of transactions with Chinese retailers on Yandex Pay increased by 3.3 times.

In the past year, the number of Russian customers in Chinese e-commerce platforms increased 2.8 times, individual purchases increased by 20%, overall purchases (including wholesale, etc.) increased 3.5 times, and the size of the average individual purchase stayed stable at 579 rubles (US$10)

It is noteworthy that the number of Russian shoppers peaked in July, and they were concentrated in central Russia, the Volga River Basin, and the Federal Southern District. Most paid for purchases with bank cards, cash, or mobile payment apps.

Analysts from Yandex also looked at search results and buying habits and found that the most popular products were gaming controllers, but sales of these products fell off by 70% in August as the summer heat faded. Behind gaming controllers, Xiaomi phones were the second-most common product and were well-received by Russian consumers all summer.

In June, people purchased large numbers of the Mi-5; by July, they were keen on the Note 4. Analysts believe that the main reason for Xiaomi’s popularity was that its stocks in Russia increased and availability was resumed. The third most popular products were earphones, for which the demand was uniformly high and unaffected by season.

With the end of summer approaching, Russian users’s equipment purchases on Taobao have fallen, and they can only rarely find the exact models of graphics cards and other equipment that they seek. After hitting three-digit sales in July, it’s likely that sales of graphics cards will fall by 50% or more in August.

Premium quality products are becoming increasingly popular in China, and more and more e-commerce companies are turning its focus from low prices to high quality including Netease Yanxuan, Mijia Youpin (Xiaomi), Biyao, and Tmall (Taobao Xinxuan).

China’s upper middle class and affluent households will drive 75% of consumption growth, and the proportion of young consumer groups in overall growth is 69%.The average disposable income per capita in China was 23,821 yuan in 2016, an increase of 8.4% over the previous year.

The quality e-commerce platforms focus on delivering high quality products directly to consumers with competitive pricing and faster response to the market demand.

Netease launched Yanxuan in April 2016 and reached 30 million registered users and 60 million yuan GMV by September 2016. Xiaomi launched Mijia Youpin brand in April 2017 focusing on smart devices such as TV, smartphone, and routers.

Biyao was founded in January 2014 and launched in July 2015. Alibaba launched a Tmall store called Taobao Xinxuan at good.tmall.com, selling directly to consumers.

Quality Retail E-Commerce Platform Users

Taobao Yanxuan saw more female users (56.35%) while the majority of Xiaomi’s Mijia Youpin and Biyao users are male (71.87%, 67.58% respectively).

Quality retail e-commerce users are mainly between 24 and 35 years old who have higher and stable income with high-quality requirement on the products.

Over 60% quality retail e-commerce users in China are from tier-1 and tier-2 cities. Mijia Youpin sees higher penetration in tier-3 cities (26.88%).

Yanxuan and Taobao Xinxuan both focus on household products while Biyao on apparel and Mijia on smart household products.

5 Trends of Chinese digital consumers