Xiaomi CEO Loses Bet to Gree Despite Strong Growth in 2018

Xiaomi smartphone company

China’s electronic company Xiaomi announced a 52.6 percent year-on-year growth in revenue in 2018 despite a lower-than-expected revenue in its fourth quarter. More astoundingly, its international revenue skyrocketed by 118.1 percent.

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According to Xiaomi’s full-year financial report, the Hong Kong-listed company made 174.9 billion yuan (roughly $26 billion) in revenue and 8.55 billion yuan ($1.27 billion) in net profit that beats market’s estimated 8.25 billion yuan. To put these numbers into perspective, Samsung made around $53.5 billion in revenue in 2018, more than double Xiaomi’s number. However, it represents a less than 2 percent increase from the year 2017, making Xiaomi’s 52.6 percent look striking in comparison.

SEE ALSO: Xiaomi Overtakes Samsung as India’s Largest Smartphone Maker in Q4, 2017

Overseas markets were singled out in the earning report as they gave an even more impressive performance. The revenues from international markets accounted for 40.1 percent of its total revenue in Q4, a big leap from the 28 percent of the same period the year earlier. 

While Xiaomi is favored among foreign markets, especially in India where the cellphone manufacturer has shipped most of its units of smartphones for six consecutive quarters, it still didn’t perform as well in its home market. Xiaomi didn’t disclose any domestic figures, but IDC reported a 6 percent year-on-year decrease in annual shipment volumes. 

As its number one business, revenue from mobile phones accounted for 65 percent of the total revenue, followed by sales from the Internet of Things (IoT) that contributed to 25 percent. In terms of growth, revenue from the mobile phone sector rose 41.3 percent year-on-year, compared with 86.9 percent growth in IoT businesses. The IoT sector has witnessed four quarters of steady growth, becoming an increasingly important business segment for Xiaomi. 

Gree CEO Dong Mingzhu(left) and Xiaomi CEO Lei Jun(right) (photo source: 视觉中国)

It seems that Xiaomi’s better-than-market-average performance in 2018 couldn’t help its CEO Lei Jun win the five-year bet he had with Gree CEO Dong Mingzhu. The electronic appliance company made about 200 billion yuan in 2018, outperforming Xiaomi’s 174.9 billion yuan, which means that Lei Jun failed to lead Xiaomi to exceed Gree in revenue within five years from 2013. The stake for this closely watched bet is 1 billion yuan, but whether Lei will pay the price remains uncertain for now. 

Featured photo credit to REUTERS/Stringer