Chinese smartphone giant Xiaomi had a record-breaking Q2

Smartphone Shipments by brand

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Xiaomi CEO Lei Jun announced that the Chinese smartphone maker shipped a record-high 23 million smartphones in Q2 2017, marking a 70% increase from the previous quarter, according to VentureBeat.

The company saw colossal sales growth from 2012 to 2014, including a 200% year-over-year (YoY) increase in 2014, but sales growth slowed significantly in 2015, to 14.5% YoY. This new stat shows a marked return to growth, with a 121% YoY smartphone shipments growth rate over the 10.5 million smartphones the IDC estimated Xiaomi shipped in Q2 2016.

Xiaomi’s bounce-back during the quarter is largely a result of several key factors:

It improved its retail sales model. In Q2 2017, Xiaomi strengthened its ties with online platforms to amplify visibility, becoming a leader in smartphone sales on e-commerce platforms like JD.com, Tmail, and Suning during China’s mid-year online shopping festival. It also expanded its physical footprint; it currently has 123 Mi Home stores in China. By integrating both online and offline retain channels, Xiaomi was able to expand its consumer reach.
It heightened innovation and investment in R&D. In February, Xiaomi released its first in-house chipset, the Surge S1, making it the fourth company in the world capable of producing both smartphones and chips. It also improved its camera and battery technologies for its Mi6 and Mi Max 2 models.
It enhanced efforts to expand globally and compete for global market share. Xiaomi increased its sales in India 328% YoY in the first six months of the year, making it the second-largest brand in the Indian smartphone market. The company has also seen impressive growth in Indonesia, Russia, and Ukraine. Last year, Xiaomi applied for 7,071 patents globally and it was granted 2,895, signifying its efforts to push innovation internationally.

Riding up this trajectory, Xiaomi plans to ship 100 million smartphones in 2018. By comparison, Apple sold 212 million iPhones in the fiscal year ending September 2016. Securing sustainable growth for the future may depend on Xiaomi’s ability to expand globally, reach into other emerging markets, and continue to target the low-end market.

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