Chinese smartphone maker Xiaomi Corp is seeing signs of a sales recovery in China, it said as the country claims it is returning to normal after being the epicenter of the COVID-19 coronavirus outbreak which has quickly grown into a global pandemic that has severed the flow of goods and people, stalled economies, and is in the process of delivering a global recession. Economic contagion is now spreading at least as fast as the disease itself.
During an earnings call with investors, Xiaomi CFO Shou Zi Chew told everyone the Chinese market will soon look the same as it did before the Coronavirus.
Chew explained that sales of smartphones, watches, and accessories took a significant hit during the first three months of this year, but he doesn’t seem to be worried about a potential decrease in demand. The executive believes global smartphone demand will mirror China’s experience, meaning that people will soon start buying new devices at the same rate as last year.
Overall, Xiaomi’s fourth quarter in 2019 was above expectations, with a 27 percent jump in profit to 2.3 billion yuan ($324.75 million). The company saw a similar 27 percent increase in sales to 56.47 billion yuan ($7.79 billion).
This means that Xiaomi remains China’s second largest smartphone maker by revenue after Huawei, who is now in between a rock and a hard place. Still, we’ll get a clear picture of the impact of Covid-19 on the two companies in the second quarter at the earliest.
This doesn’t mean the company doesn’t have a few more headaches to deal with. First, its factories in India won’t be able to operate until mid-April at the earliest. Then you have to take into account that Europe, one of its biggest target markets, will likely have a lower appetite for gadgets until the end of the year.
