Xiaomi India's revenue slumps 45% in March quarter despite premium push
New Delhi: Chinese major
Xiaomi
's wholesale revenues from
smartphone sales
in India plunged 45% on-year in the March quarter, despite a shift in the erstwhile market leader's strategy to focus on the premium segment, underscoring the turmoil at the company in its second largest market by volumes.
According to data from market research firm
Canalys
, exclusively available to ET, Xiaomi's revenues (excluding GST) from smartphone sales fell to $47.2 million in Q1 2025, from $85.3 million in Q1 2024. The company's shipment volumes also fell a sharp 38% on-year during the period to 4 million in the January-March quarter—moving out of the top five from the first time since Q3 2016—as it struggled to clear inventories accrued from the previous quarters.
Despite its active efforts to penetrate higher price segments, Xiaomi's average selling price has in fact fallen 12% to $118 in the March quarter, data from the market tracker showed.
This comes after the company charted a comeback in 2024 by streamlining its portfolio and expanding offline retail presence. Xiaomi's volumes grew 6% in 2024, outpacing the overall market growth, while its revenues from smartphone sales rose 18% on-year.
But the company hasn't been able to sustain that. Market trackers attributed the sharp fall in revenues and volumes since the start of 2025 to the company facing intense competition in the budget segment where it had a historical stronghold, coupled with challenges in penetrating the premium segment where it wants to focus on.
'While Xiaomi states it is aiming to go premium and their leadership talks about premiumisation, the market data, specifically the falling ASPs driven by volumes in the budget segment, suggest that they are still a budget brand,' said Sanyam Chaurasia, senior analyst, Canalys.
He added that increasing ASPs will require a branding revamp, which involves channel partners convincing customers of the premium quality of products and ecosystem, where the company is currently faltering.
Xiaomi, however, argues that the volume drop is according to the company's plans on streamlining its portfolio to focus on profitable growth of market share instead of simply chasing volumes in a declining smartphone market.
'The focus is on revenue and profitability for long-term sustenance, considering the overall business beyond just smartphones. Selling many low-priced phones might increase volume market share, but not necessarily revenue,' Sudhin Mathur, chief operating officer,
Xiaomi India
, told ET.
Mathur admitted that a majority of its volumes still come from the sub-Rs 15,000 price segment where the company has a stronghold, but growing its presence in the premium segment is now the focus.
'There is still a long way for us, but we are very confident that in the next 8-10 quarters, you will see many more product offerings that will come from us, which will strengthen our position in the premium segment,' Mathur said.
He added that the company's recent premium devices have received a better-than-expected reception, which is helping improve the brand perception and salience.
Offline retailers, however, allege that Xiaomi's presence in retail stores is shadowed by its rivals, which is contributing to the company's declining sales.
'Xiaomi sales promoters are not showing much interest in employment with Xiaomi due to pressure from the brand to improve its premium mix, amidst lower salaries and incentives as compared to Vivo and Oppo,' said Kailash Lakhyani, chairman, All India Mobile Retailers Association, which represents over 150,000 mobile phone retailers.
But Xiaomi's Mathur called the move strategic.
"This strategic change is designed to ensure more equitable value creation for both the brand and our partners, with a sharper focus on driving higher-value sales over pure volume," Mathur said.
He added that the move aligns with the broader goal of accelerating the premiumisation of Xiaomi's product portfolio.
Lakhyani added that the company recently changed its sell-out schemes for retailers from volume-based incentives to value-based, giving retailers little time to adapt.
'If a retailer's average sales volume over the past three months is 50 units, with an average value of ₹6 lakh, Xiaomi should ideally set the target at ₹6.5 lakh. Instead, they directly set a target of ₹7.5 lakh with no revisions entertained,' Lakhyani said.
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