Business Forum • 20 March, 2024 at 12:43 PM
Xiaomi Corporation, a consumer electronics and smart manufacturing company with smartphones and smart hardware connected by an Internet of Things platform at its core, announced its audited consolidated results for the year ended December 31, 2023. The Group's total revenue was RMB271.0 billion, while its adjusted net profit surged by 126.3% to reach RMB19.3 billion. The increase in adjusted net profit far exceeded market expectations and marked the second highest profitability level since the Group's listing.
The smart Electric Vehicle (“EV”) business and other new initiatives expenses increased to RMB6.7 billion (excluding share-based compensation expenses related to smart EV and other new initiatives of RMB0.8 billion for the year). In the fourth quarter of 2023, Xiaomi's total revenue grew for two consecutive quarters, reaching RMB73.2 billion, a 10.9% increase year-over-year (“YoY”), and its adjusted net profit increased by 236.1% YoY to RMB4.9 billion.
Throughout 2023, Xiaomi diligently executed its key operating strategy of “dual emphasis on scale and profitability”. It also marked the inaugural year of the Group's upgraded corporate strategy of the “Human × Car × Home” smart ecosystem. In terms of business performance, the first half of 2023 saw accelerated profit growth, followed by a quarterly revenue rebound in the latter half of the year. Both indicators reflect the Group's exceptional growth resilience and efficiency in business operations. As for the ecosystem development, Xiaomi unveiled its new operating system, “Xiaomi HyperOS” and held the Xiaomi EV Technology Launch event. The Xiaomi SU7 Series product launch event is scheduled for March 28, 2024, which is set to further enrich the Group's ecosystem portfolio.
Premiumization drives robust demand for flagship smartphone models
In the smartphone segment, Xiaomi's global smartphone shipments reached approximately 145.6 million units in 2023, with annual smartphone revenue hitting RMB157.5 billion and a gross profit margin of 14.6%. According to Canalys, Xiaomi maintained its No. 3 global smartphone shipments for three consecutive years. In the fourth quarter of 2023, the Group's global smartphone shipments amounted to 40.5 million units, up 23.9% YoY.
Facing intense market competition, Xiaomi continued to embrace technology innovation and made a stride in the premium smartphone market. In 2023, the average selling price (“ASP”) of the Group's smartphones in the mainland China increased by over 19% YoY. According to third-party data, Xiaomi's market share of smartphone sales in the RMB4,000-RMB6,000 price segment in mainland China reached 16.9% in 2023, up by 9.2 percentage points YoY. The ranking of sales in the same price segment rose to No. 1 in the fourth quarter. In mainland China, Xiaomi's proportion of premium smartphone in mainland China (models with retail prices at or above RMB3,000) shipment represented more than 20% of the Group's total smartphone shipments for the year.
As one of China's most successful global brands, Xiaomi smartphones maintained a solid position in the global market last year. According to Canalys, in 2023, Xiaomi's smartphone shipments ranked among the top three across 51 countries and regions globally and ranked among the top five across 65 countries and regions globally. Specifically, Xiaomi's smartphone shipments ranked No. 2 in the Middle East, and ranked No. 3 in Latin America, Africa and Southeast Asia, with market share growth in all these regions. Its flagship smartphone model garnered widespread acclaim, with the Xiaomi 14 series delivering excellent user experience.
Xiaomi's new retail operating strategy of “storefront integration” has borne fruit, with a significant improvement in the efficiency of its offline retail stores. According to third-party data, in the full year of 2023, Xiaomi's market share of smartphone shipments through offline channels in mainland China increased to 8.4%.
Number of connected IoT devices on AIoT platform hit a record high
In 2023, revenue from Xiaomi's IoT and lifestyle products was RMB80.1 billion and its gross profit margin reached 16.3%, hitting a record high. As of December 31, 2023, the number of connected IoT devices (excluding smartphones, tablets and laptops) on Xiaomi's AIoT platform reached 739.7 million, up 25.5% YoY; the number of users with five or more devices connected to its AIoT platform (excluding smartphones, tablets and laptops) reached 14.5 million, an increase of 25.3% YoY. The MAU of the Group's Mi Home App grew to 85.8 million in December 2023.
Xiaomi continued to broaden its smart living scenarios, steadily gaining global recognition. Meanwhile, Xiaomi TV advanced its premiumization strategy. According to All View Cloud, in 2023, Xiaomi's TV shipments ranked among the top five globally. In 2023, Xiaomi's smart large home appliances have sustained a high growth momentum in sales, with its revenue increasing by nearly 40% YoY. Xiaomi's global tablet shipments exceeded 5 million units, an increase of more than 50% YoY. In particular, Xiaomi's annual tablet shipments in overseas markets doubled YoY. In the wearable products sector, Xiaomi maintains its industry-leading position through comprehensive features and a diverse product portfolio. According to Canalys, in 2023, Xiaomi's wearable band shipments ranked No. 2 both in mainland China and in global markets, and its TWS earbud shipments ranked No. 2 in mainland China.
Embracing collaboration to fuel sustained growth in internet services segment
In 2023, the Group's internet services reached record highs in both revenue and gross profit margin, with internet services revenue reaching RMB30.1 billion and gross profit margin of its internet services reached 74.2%. Benefiting from its global footprint, Xiaomi's MAU globally and in mainland China (including smartphones and tablets) reached 641.2 million and 155.6 million respectively.
In its global partnerships, Xiaomi adopts an open approach, unlocking the potential for business monetization. In 2023, revenue from its overseas internet services increased 24.1% YoY to RMB8.4 billion, hitting a record high and accounting for 28.0% of the Group's total internet services revenue.
As Xiaomi continued to optimize efficiency across its platform, the Group's advertising revenue reached RMB20.5 billion, an increase of 11.2% YoY. Alongside the advancement of smartphone premiumization strategy, the number of active users and paying users of the Group's gaming business continued to increase, fuelling its gaming revenue to reach RMB4.4 billion in 2023, an increase of 7.0% YoY.
Setting new goals for 2020–2030, committing to invest in foundational core technologies to emerge as a leader in global cutting-edge technologies
In 2023, Xiaomi introduced its new goals for 2020–2030. The Group is committed to sustainable investments in foundational core technologies, and is dedicated to becoming a leader in the evolving realm of global cutting-edge technologies. In 2023, Xiaomi's research and development (“R&D”) expenses were RMB19.1 billion, up 19.2% YoY. As of December 31, 2023, the Group had 17,800 R&D personnel, accounting for 53% of our employees.
On December 28, 2023, Xiaomi unveiled its first EV product, the Xiaomi SU7 Series, at the Xiaomi EV Technology Launch event. The event showcased Xiaomi EV's five core technologies, marking the key to success in Xiaomi's new venture.